A P3 trillion budget for 2016, and P3 trillion
taxes, fees and borrowings, is just around the corner. Government, national and
local, keeps expanding. On years of no crisis or emergencies, a responsible
government should have fiscal surplus, pay many loans and reduce the public
debt, currently rising by around P400 B a year. In post-emergencies year,
running a budget deficit and resume borrowings is understandable. But the
government just keeps expanding and borrowing, with or without a crisis or
emergencies.
While politicians and legislators, and
those in the Executive branch are directly to blame for endless expansion of
government, the public also share the guilt. For any problem they see, they
think that more government is the solution. They seek endless government
subsidies, endless government new regulations.
People should be careful
what they wish for or request from the government, especially new legislations. Almost
ALL government subsidy programs created by legislation are forever, they never go away as
all laws here have no sunset (timetable) provisions. All new regulations create
new or expand existing bureaucracies that exist forever. And the BIR will keep
inventing new harassments, new requirements, to doctors, entrepreneurs, even
those in informal sector, so that it can raise more tax revenues. We already
saw it in the BIR-doctors love-hate affair. Expect the worst to come in the
coming years.
Another disappointment for the lefties too. Big money means big temptation to steal, or at least to waste. Big
expectations often mean big disappointments. 2.6 trillion of disappointment.
I am curious how much
will be the interest payment alone for 2015. Public debt stock is
rising by around P300 B a year, with or without a crisis or emergencies.
source: Bureau of Treasury, http://www.treasury.gov.ph/
Palpak din ang campaign ng Freedom from Debt Coalition (FDC). You will never have
"freedom from debt" if there is no "freedom from (endless)
borrowings" mentality and policy. If new welfare programs (and
bureaucracies)are invented without phasing out or abolishing old and
ineffective welfare programs (and bureaucracies), endless borrowings is the
result. 100 percent.
Government should learn to live within its means. If projected revenues next year are P2.3 trillion, then the budget should be at that level only, not P2.6 trillion then borrow P300 billion. Government should stop borrowing even for one year. If new welfare programs have to be invented, then some old welfare programs that do not seem to work should be shrank, if not discontinued. The national government should focus on improving the institutions for rule of law implementation. The poor appreciate fast and credible delivery of justice as much as the rich.
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A physician friend engaged me in a private discussion. His ideas are useful, I am posting our short discussion here.
Him: Sir Nonoy, we
cannot continue living beyond our means. Either cut the budget, impose new
taxes, cut losses due to inefficiencies and corruption or a combination of the
three.
Me: Yes, that was my point. The Executive,
as tolerated by the Legislative branch courtesy of pork barrel, keeps living
beyond its means. Too much fiscal irresponsibility. This makes tax cut
proposals become more difficult. Too many spending.
Him: well sir, there are those arguing that
if government spending contracts without the private sector coming in, our
economic growth will be compromised. i would prefer living within our means,
whether as individuals, families, communities, or as a nation. We are lucky interest rates are down.
but what if it shoots up? just the interest payments will kill us hehe.
Me: PH government interest payment
alone is P330 B a year. And it should rise to P350 B yearly soon. That is killing certain sectors of the PH economy already.
If government reduces spending, it reduces
heavy taxation and borrowings too, more money in the pockets of people and
firms, they can expand and hire more people. If people have stable jobs, what
is the need for rising government spending, except to fatten the salaries and
perks of those in government.
Him: although sir there will be expenditures
for certain social needs which the
private sector cannot or will not spend for (i.e. national defence). but
i agree that we must spend within our means
Me: Actually defense spending here is verrryyy bloated. The big threat to the people is internal -- criminals, thieves, rapists, murderers, etc. Police function, not military function. That is why private security agencies are everywhere. Peace and order has been privatized, what a horrible government failure.
Him: regarding defense spending, Im no
expert but our AFP does need upgrading. hehe. also our PNP.
Me: AFP modernization can be funded by
privatizing Camp Aguinaldo, all of the proceeds should go to AFP fund, so there
will be no need for new taxes, new borrowings. AFP can move to Cavite or
Bataan. Their function or mandate is external defense, not internal.
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Fiscal irresponsibility 12: More on US debt default, July 28, 2011
Fiscal irresponsibility 17: Cut Spending and Borrowing, September 19, 2011
Business 360 3: Fiscal Cliff and Government Irresponsibility, January 23, 2013
Pork Barrel 9: Are PH Government Institutions Ready for Cleansing?, April 09, 2014
Pork Barrel 10: Bloated Budget, Wasteful Government, June 02, 2014
Pork Barrel 9: Are PH Government Institutions Ready for Cleansing?, April 09, 2014
Pork Barrel 10: Bloated Budget, Wasteful Government, June 02, 2014
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