Subsidies and deficits

 

It said it also wished to clarify that the country's national debt stood at RM234bil, which is defined as external debt and inclusive of both public and private debt.

"Our government debt stands at RM362bil, comprising domestic debt (96%) and foreign debt (4%)."

 

I am not going to be drawn into semantics. Jala says one thing. MOF which is headed by the PM says another thing. So one of them must be lying or both are lying.

But just look at the above figure, the government says national debt stands at RM 234 billion. On the next line it says debt stands at RM 362 billion.

Maybe I have not learnt my economics properly. How do I reconcile the two figures coming from one source?

Everyone agrees that deficit spending must be cut. If the spending goes into unproductive outlets, they must be cut. Deficits are not always not good. If the economy isn't up to full employment, capital injection into the economy serves to increase productivity.

The argument becomes messy when the reason for the deficit is attributed to subsidies in the form of welfare and transfer payments. Subsidies for food items and other essentials are probably sensitive issues the government must be circumspect about. Don't bulldoze into cutting deficit by cutting first of all those subsidies going to poor people and low income earners.

We haven't learnt this aspect about governance. Cutting is easier than giving back. Don't cut is the better choice. Cut those non essentials.

The sources of deficit spending must be identified properly. Almost always, the blame for deficit spending is heaped upon the poor, the aged, and the infirmed. I have heard this umpteen times. The parrot like repeating of the same arguments that support and justify deficit spending year after year because we spend on welfare and the poor. You listen to the nauseating apple polishing in the Dewan Undangan Negeri Pahang for instance; you hear the same tired arguments by tired old faces and underused brains.

Or conversely, the reasons for less revenue and income should be exhaustively explored. Government operating expenditure must be reviewed continuously. Government capex items should be combed finely.

We are just told of the maintenance cost of the bloody two submarines which maybe cannot dive in the future being bought without maintenance agreement or are not fitted with standard fittings. In order to install these, we must spend more.

Probably when Razak Baginda brokered the purchase of the two submarines, the translation from the Mongolian was lost in other lower pursuits.

And when we talk about cutting back expenditure on our armed personnel, we don't mean cutting back on conventional warfare material and other less sophisticated requirements. We question those purchases brokered by people such as the Razak Bagindas of this world.