Popular government is not always good government and a good government is not popular all the time.
Our reserves is our nest egg, meant to see us through abnormal times, the rainy day, so to speak.
As a Straits Times editorial wrote, such times - like a natural calamity, war or financial crisis - cannot be predicted. The damage they cause can be foretold even less.
Society as a whole then, must be wise in how we manage such a critical resource so that it is not eaten away over time.
IF THE RESERVES SHRINK, SO TOO WILL THE INCOME FROM THE RESERVES.
SUCH INCOME PLAYS A KEY ROLE IN BALANCING THE BUDGET without which it will be a deficit.
Countries operating budget deficits year after year put a huge debt burden on future generations of their people.
We do not want to go the same way.
As a Straits Times editorial wrote, such times - like a natural calamity, war or financial crisis - cannot be predicted. The damage they cause can be foretold even less.
Society as a whole then, must be wise in how we manage such a critical resource so that it is not eaten away over time.
IF THE RESERVES SHRINK, SO TOO WILL THE INCOME FROM THE RESERVES.
SUCH INCOME PLAYS A KEY ROLE IN BALANCING THE BUDGET without which it will be a deficit.
Countries operating budget deficits year after year put a huge debt burden on future generations of their people.
We do not want to go the same way.
There is a tendency for people to be swayed by the 'wealth effect' - we are rich, we can spend more.
Hence there are calls for reserves to be used for recurrent needs like healthcare, like WP Pritam Singh's populist call to sell land.
"If the everyday need for money is deemed an acceptable use of the reserves, recurrent spending will then drain the reserves inexorably and make it nigh impossible to halt the bleeding," says the ST editorial and this is very true.
Imagine, if you dip into your bank account everyday for your daily expenditure, it is a no brainer that your bank account will soon be depleted.
The only way your bank account does not deplete is when it is GROWING faster than your expenditure.
So don't say you don't need to grow reserves.
As noted in the editorial, the temptation to dip into the reserves will grow keener when the alternative is to raise taxes to meet ongoing needs, like better care of a growing pool of seniors.
"If taxes, such as a goods and services tax are eschewed, calls by voters to use the reserves might grow louder.
And if a government capitulates to such demands, future generations will have a smaller fund to support them when a rainy day arises.
In an Asian society, inter-generational transfers work both ways.
Much as children are expected to care for their aged parents, those parents are obliged to leave something behind for their children and grandchildren.
This natural quid pro quo goes against the grain of a carpe diem (seize the day) mentality, which is reflected when people consume what they can in the present and do not spare a thought about what is left behind for the future.
LEAVING A LEGACY OF DEBTS FOR THE NEXT GENERATION IS UNCONSCIONABLE as it might struggle to pay these off, let alone building savings for itself."
They could be your children, grandchildren, or great-grandchildren.
"Foreign examples are pertinent when considering such a scenario.
Even older democracies have shown recently that they are not immune to the laws of POPULIST motion, under which runaway debts gain mass like a snowball rolling down a slope.
Anti-establishment movements in several countries in the West have backed irresponsible calls for heightened spending, regardless of how this will add to the national debt.
HERE, THE GOVERNMENT DOES NOT BORROW TO SPEND; IT CAN ONLY DO SO TO INVEST, UNDER THE CONSTITUTION.
SUCH PRUDENCE MUST ALSO DICTATE HOW THE RESERVES ARE USED." - ST
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Hence there are calls for reserves to be used for recurrent needs like healthcare, like WP Pritam Singh's populist call to sell land.
"If the everyday need for money is deemed an acceptable use of the reserves, recurrent spending will then drain the reserves inexorably and make it nigh impossible to halt the bleeding," says the ST editorial and this is very true.
Imagine, if you dip into your bank account everyday for your daily expenditure, it is a no brainer that your bank account will soon be depleted.
The only way your bank account does not deplete is when it is GROWING faster than your expenditure.
So don't say you don't need to grow reserves.
As noted in the editorial, the temptation to dip into the reserves will grow keener when the alternative is to raise taxes to meet ongoing needs, like better care of a growing pool of seniors.
"If taxes, such as a goods and services tax are eschewed, calls by voters to use the reserves might grow louder.
And if a government capitulates to such demands, future generations will have a smaller fund to support them when a rainy day arises.
In an Asian society, inter-generational transfers work both ways.
Much as children are expected to care for their aged parents, those parents are obliged to leave something behind for their children and grandchildren.
This natural quid pro quo goes against the grain of a carpe diem (seize the day) mentality, which is reflected when people consume what they can in the present and do not spare a thought about what is left behind for the future.
LEAVING A LEGACY OF DEBTS FOR THE NEXT GENERATION IS UNCONSCIONABLE as it might struggle to pay these off, let alone building savings for itself."
They could be your children, grandchildren, or great-grandchildren.
"Foreign examples are pertinent when considering such a scenario.
Even older democracies have shown recently that they are not immune to the laws of POPULIST motion, under which runaway debts gain mass like a snowball rolling down a slope.
Anti-establishment movements in several countries in the West have backed irresponsible calls for heightened spending, regardless of how this will add to the national debt.
HERE, THE GOVERNMENT DOES NOT BORROW TO SPEND; IT CAN ONLY DO SO TO INVEST, UNDER THE CONSTITUTION.
SUCH PRUDENCE MUST ALSO DICTATE HOW THE RESERVES ARE USED." - ST
http://
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