Key's super comments 'a laughing stock' - economist

Tue, 02 Jun 2009 12:00a.m.

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Economist Gareth Morgan is criticising the leaders of both national and labour for their comments over the New Zealand superannuation fund.

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03 Jun 2009 10:09p.m.

Alex wrote:

Governments can borrow very cheaply because the debt is essentially risk free. Students can invest the money they borrow because any student can borrow living costs ($160 a week) whether they live at home or not. There is no obligation to spend all the money you borrow in living costs, so of course you can save that money.

03 Jun 2009 07:18p.m.

Peter wrote:

Yeah, viola. That's what happened before and boom, suddenly interest rates shot up, property prices collapsed, the stock market collapsed because everyone had borrowed heavily when things were low.

As for students using loans to invest, if that's the case the government should charge them interest from day one. Student loans are there for paying fee's, not investing. Doing so would surely constitute fraud on the students part and should be prosecuted to the max.

03 Jun 2009 10:48a.m.

Guy wrote:

If interest rates are low, and stocks are low, it makes sense to borrow to save - stocks rise, the fund rises, and voila.

It's the same principle used by students with interest free loans - the interest is lower than what you can earn from it, so why not?