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Nov 30

Government Deficits and Debt (at all levels around the world)

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The day of reckoning has finally come.  The madness must end.  Ever since around the 80’s, virtually all levels of government in many parts of the world (most noticeably in the ‘have’ nations) have been spending with reckless abandon.  This problem is most apparent in the rich countries.  A tide of liberalism has brought with it a sense of entitlement among the electorate that is all too easily enticing to lame-duck politicians.

We have been living on credit since around the 80’s or 90’s (depending on where you live).  We have seen some of the world’s ‘richest’ nations fall to their knees (read all of Greece, Portugal, Ireland, Italy, France, and even The United States) in order to assuage the needs of their present and future creditors.  These countries have either demonstrated that they can not pay their bills or have asked for extended lines of credit.  This couldn’t come at a worse time, however.

Many Countries are in Trouble.

Many Countries are in Trouble

All of these countries are ‘rich’.  Rich countries are faced with aging populations.  Aging populations require more money.  The problem is that they have already run out of money and the worst is yet to come (aging population-wise).

For far too long, these countries have enjoyed liberal largesse – they have spent far more than they can pay for (this is termed a deficit when they have to borrow to finance this outside of their income).  It is easy to be a liberal politician; just rail against any reduction in costly benefits.  What seems to be consistently lacking, however, are alternative plans for spending cuts.   It is worthwhile to protect our most needy citizens; but the question remains, how will you pay for this?  What services will you cut in order to fund what you think is important.  To not address alternative spending priorities and spending cuts in order to finance your agenda amounts to proving that you are not a worthy leader or representative in my view.  If you are going to disagree with a spending or budget proposal, you have an obligation to provide a clear alternative that people can clearly understand and decide upon.

It is easy for anyone to say that they feel that healthcare and education should be protected.  This is a no-brainer.  Alright, now how will you pay for this?  This is where most people tend to stop talking.  In what areas will you reduce spending in order to achieve this?  Yes, not quite so easy, is it?

Nevertheless, we must decide which are top priorities and which are lesser priorities.  We have a limited amount of money to spend, after all.  We can not make everyone happy at the same time.  We must make reasonable and sensible decisions about what we feel is right and just based upon the resources that we have – not upon what we don’t have (i.e. by undertaking a deficit which then becomes a part of our debt) read more of my ideas about this here.  Some people who have benefited from thirty or more years of largesse may have to do with less, some who have paid a unfairly disproportionate share will have to pay more, some who have paid very little will have to pay more.

The problem is that our political systems do not tend to support those who ask for sacrifice.  We love voting for empty promises with money that we don’t have.  We love passing on future liabilities to our children because it is convenient and expedient.

I worry for my fifteen-month old daughter.  She will, in most probability, have to pay for what we are refusing to pay for now.  All things have a cost.  Be it healthcare, education, defense, libraries, or whatever; they all have a cost.  I hope for the day the we actually reward the brave and bold politicians who think beyond four years and towards the very integrity and long-term viability of our countries.  I can not think pf a happier day then when voters will actually reward politicians for doing this.

Be wary of a politician who offers to reduce taxes and increase spending at the same time – this is simply impossible.  State your priorities and ask them what they will cut in order to pay for your priorities in the long-term.   Monitor their progress, pressure them if necessary, and reward them if you feel that they have earned it.  Don’t fall for the “I believe in healthcare, education, the arts, libraries, and daycare, and fluffy bunnies at every street corner, etc., etc.”, without asking them how they will pay for it.  If their plan of cuts in other areas to support these ideals can sit with you, then vote for them.

READ MORE froogalist commentaries HERE.

froogalist

Frugal dad – focusing my money and energy towards happiness and the things that matter most since around 1985.

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