Many have castigated (self included) the ruling PAP for being mean to S’poreans despite its our money that it refused to spend. Things are changing as I’ve been blogging recently (example), even if others don’t appreciate or notice it.
But here’s shumething to reflect on from a blog of PAP’s favourite “running dog” int’l publication (it advocates things like CoEs and road-pricing and GST and low corporate taxes): Here lies a problem that has dogged nations all through this crisis (and still dogs nations outside the euro zone like Britain and America). The collapse of tax revenues in 2008 and 2009 caused deficits to soar, and made public finances look unsustainable. But when you start from a very large fiscal deficit, it is hard to get back to balance. Do it too quickly and you squeeze the economy too hard; do it too slowly and the markets may not finance you. I am not aware that Keynes dealt with this problem (although I’m happy to stand corrected, if anyone has chapter and verse). Of course, the best answer is growth (a consummation devoutly to be wished) but we are very good at talking about it, and a lot less good at producing it.
The PAP avoids fiscal deficits. So taz one problem we don’t have. But look out for my Monday piece on the problems that the government created for the economy. Not me but from DBS Bank.