Wednesday, 30 November 2011

"Bread and surpluses" or...

"bread and circuses"?
I suspect it is a bit of both. The Federal Treasurer is desperately trying to deliver a surplus before the next election. It is all about politics, not about good financial management. Good financial management would not have wasted billions of dollars on a number of ridiculous schemes, on short term measures that were designed to shore up voter support. All sides of politics do that sort of thing. All governments spend money they do not have in places where they should not spend it. We all like a little bit of the resulting cake.
This time the government seems to be relying on the Reserve Bank to get them out of trouble. The Reserve Bank Board will be criticised if they do not do the "right thing" with respect to interest rates - that is, if they do not do what the government wants them to do. They may not.
The government can then blame the bank for the problem though - win, win situation for the government.
All this is much too complicated for me. My finances are relatively simple. I budget within my means. I do not borrow money. This is not necessarily good management but necessity and good fortune. My father does not have a mortgage on the house - although it took much longer to buy one than it did for most of his generation because he was required to teach in country schools and pay exorbitant rent for inadequate housing instead of paying off a mortgage in the city. He no longer owns a car - but we do attempt to "pay" other people when they give us a lift. We have managed to learn to live within our means and, short of a major disaster, we will manage.
Governments, of all persuasions, do not seem to learn that lesson. They will blame everyone but themselves for financial mismanagement.
This time however it seems more ridiculous than usual. There has been what has been called a "Global Financial Crisis" and international events are influencing the economy even more than usual. The government is now cutting billions of dollars of expenditure in much needed areas after having spent billions in unnecessary areas. Apparently all this has been "good for the economy". Apparently it is absolutely essential to have a "surplus". Why? I do not understand this.
Perhaps I need to go back to school and do arithmetic again?


widdershins said...

It won't matter. No matter how long you study the math, there is just no way government will be accountable for their own 'creativity'.

Anonymous said...

I think your arithmetic may be more accurate than theirs Cat - Treasury is probably in a state of complete despair by now! Chris