1/23/2009

Where is the wow factor?

We have this extraordinary budget, marked by the first time that we have to dip into the reserves. Wow? Where is the wow factor? Why don't people get this feeling but feeling ordinary? $2.6b for family and $4.4b for homes. These together add up to $7b. Quite a substantial sum. If only they be given to the less than 1 million Singaporean households directly with each household getting $7,000, would it be more meaningful in times like this? And confining it to citizens only, the number of households could be just 500,000 and each household can receive $14,000 each. This will be the kind of angpow that will give the wow in the budget. The amount of effort put into dividing this sum under the budget is great and complicated. The amount given is so diversified that it would not create any ripple effect on the recipients. It is extraordinary to hand out such a big budget but not getting the feeling that it is a great relief from the people.

19 comments:

Anonymous said...

When companies are doing well, I don't think they will retrench staff, so the job credits only helps to fatten the bottom line.

Those companies not doing well, would they retain staff, if let's say they can save $2K a month for retrenching an employee, would they really wait for the Government to give it $250 to keep that staff? My lesser mortal thinking is that it is better to save the $2K. Forking out the balance of $1750 to keep the staff doesn't help in its survival.

Anonymous said...

I'm interested in matilah_singapura's take on the budget.

Anonymous said...

Lim Swee Say is dancing and salivating like a kid and you say there is no wow? Wow!

Anonymous said...

Ya, Matila Singapuras' take on the Budget wil be very precious!

It will be interesting for sure.

Give us your view fast Sir.

patriot

redbean said...

somehow i got this feeling that nothing matters anymore. got budget or no budget is not going to change the life of the losers and neither will it change the life of the immortals.

Matilah_Singapura said...

Dear folks,

Thanks for the compliments, but I must emphasize that I am not anyone 'special' — just one man with an opinion.

Actually the total S'pore economic stimulus package is 13 billion

Since we all will be paying for it — through taxes, inflation and govt borrowing, and possibly budget deficits maybe for more than a year... you might be interested in working out the ratio as a percentage of GDP, bearing in mind that GDP has shrunk by double digits.

At a cursory glance, 13 billion relative to total GDP is 5-6% — a very small number compared to other countries like China, India and Russia... we'll leave out the EU and US because they are just plain nuts over there. I've picked China, India and Russia because they're countries (although socialist at the core) who are striving to make it good in the free market — they are actually freeing up their markets (becoming more capitalist) whilst the 'free democracies' are becoming more socialist by nationalising banks, insurance companies etc.

Nations are also engaging in what is called 'competitive devaluation' of their currencies — to see how low can the govt go, as they believe in the myth of 'boosting exports' by lowering their currencies.

The problem with this is now EVERYONE is doing it. ALL GOVERNMENTS are inflating to lower the purchasing power of their currencies — varying only in degree. If everyone is doing it, what then is the point? Exactly. No point.

What is the effect?

When the purchasing power of the currency is debased by inflation of the money supply, what in fact is happening is that the wage earners (whose wages are fixed — govts also call the workers to 'restrain' wage rises) are having to put up with decreasing purchasing power of their earnings to enable the special interest group called 'exporters' to make more money.

In other words, you have less purchasing power, and the export businessman now has a price advantage. What the govt has done is impose an invisible tax (inflation) to FUND some rich fuckers export business. Yes folks, by competitive devaluation, you end up paying for someone else to get rich.

Anyway, back to the S'pore 'stimulus' package. I don't support ANY govt stimulus package, but this one is small. But wait. What about the GDP of S'pore? Is govt activity counted in GDP, if it is, then the GDP figures are skewed upwards.

Remember, govt doesn't create economic value it takes economic value AWAY. So if S'pore's GDP figures contain govt expenditures and activity, then the economic stimulus package is GREATER than 5-6%.

I'm going with my optimist side: no need to worry, you'll end up paying but it won't be as bad as the country I'm in Australia — because we run a huge welfare state here.

Be thankful for small mercies that the 'welfare' spending is S'pore is small, and the govt is as kiasu about money as the people are. I say it that way just in case people get the wrong idea that the S'pore govt is being 'sensible' or 'selfless'. No way. They are acting in their best long-term interest, so that they can remain in power. If they just hand out the printed money like Zimbabwe, they'll collapse the state, the country will be ruined, and they'll lose their power.

Bear in mind that my opinion is based on one assumption: that the facts and figures I have are TRUE. Because of the lack of transparency in S'pore, they could be telling big fat lies, already stolen all the money and shipped it offshore, and are engaging in a huge conspiracy to defraud the people.

You best be your own judge. I say again: I'm only one guy with an opinion.

Anonymous said...

re: currency devaluation - I think the idea is to manufacture a slow and gradual decline of the U.S. dollar, thus giving people time to set things in order.

Meanwhile I'm half-hoping that Obamma would multiply his stimulus package a trillion times - once and for all putting the Keynesian debtae to rest.

How's the situation in Aussie btw? Surpluses were registered during the Howard years, but private debt is huge. Then again, the Aussie economy is driven mainly by agriculture and commodities - heh, more like these are the only two things driving it.

Anonymous said...

"remember, govt doesn't create economic value it takes economic value AWAY"

Government might not directly create economic value - but perhaps indirectly? e.g. preserving security and upholding the rule of law, education, infrastructure etc. The private sector might not be capable of providing some of these - so far I haven't heard of 'competing' courts or 'competing' police/security agencies.

Matilah_Singapura said...

anon 718

Australia will be hit. Surpluses are gone, 2nd stimulus package on the way.

anon 724

> Government might not directly create economic value - but perhaps indirectly? e.g. preserving security and upholding the rule of law, education, infrastructure etc.<

No, it is not 'indirect' value creation. It is simply FORCED re-distribution. (no choice for the consumer, therefore no ability to make comparative analysis of what goods to 'buy')

Yes, there are free market solutions, but as long as there is "political power" — i.e. a power-hungry political class (controlling also the education system and what goes into childrens' minds), and a majority who keep the elite class in power, no (true) free market is possible, and therefore no true privatisation of the PRODUCTION of societies "needs" will happen.

Jaunty Jabber said...

It is Digging into Something or, Having Something to Dig, is "Better than Nothing"?

Read more on this post:

http://informationreadbyme.blogspot.com/2009/01/my-take-on-bold-and-decisive-budget.html

Regards

Anonymous said...

You expect a mama slave to be able to give us the "Wow!" we need so badly?

We have a sick man as a pm; an old man who is still squeezing the balls behind the closed doors; and a dead wood who refused to give up but still trying to show off; and the rest are mainly sycophants, yes-men and balls-carriers who can't even express their own free will though shamelessly self-proclaimed as the outstanding, extraordinary and the elites of our society. What can these self-enriching people do for us?

May be possible if Obama is our chief.

Anonymous said...

"When companies are doing well, I don't think they will retrench staff, so the job credits only helps to fatten the bottom line."

but it does make the govt look good & caring doesn't it?
even if no actual effect & less money will need to be used to pacify the peasants.

thats why he's paid millions by his master.

redbean said...

devaluation or not, the real stuff is in the productivity. how much it cost to produce the goods. the other end is the consumption level. how much is consume by the people and country.

devaluation to gain a competitive edge is just an illusion.

as for the balls factor, i reckon only eunice and inderjit have the balls to say the necessary but unpleasant to the ears. ok ok, i am not trying to be rude to eunice. : )

redbean said...

oh jaunty, that's a nice pic. nicer than matilah's.

Anonymous said...

This crisis just goes to show that the whole world really depends on American consumption. Take that away and the whole world economy tanks. The key to any recovery lies with America, whatever the others in the world do to pump money into their systems. Japan has been doing that for years. How long can Governments continue to ask employers to retain jobs, when demand for goods and services are going to fall further when jobs are taken away? It is probably leading to a real depression.

redbean said...

we are growing to be more interdependent on one another. if all are willing to live and play together, it can be a better world. the other option is to fight and kill each other.

Anonymous said...

Ask Osama to kiss Obama? Ask the Israelis to kiss the Iraqis? If we can ever learn to live and play together centuries ago, this world could have been different.

Again it is all related to greed. Everything and anything boils down to greed. Some wanted bigger land spaces, some wanted more oil, some wanted more wealth, some just cannot see eye to eye with anyone else because they have different ideologies.

Jaunty Jabber said...

Thanks for the compliment about picture.

I like all the pictures of beautiful flowers used by Redbean. It will be nice if Redbean could tag the pictures with the respective name of the gorgeous flowers.

redbean said...

hi anonymous, many troubles around the world are caused by, as you said, greed.

the only exception is the arab israeli war. this one is more than that. it is a family feud between two brothers and has a divine beginning.

oh jaunty, thanks for the compliment. i am still expanding my collection of orchids. i may try to put a name to them one day. i tried initially but quite a task.