By: B. Goode
Reform Party has started their election campaign in earnest; doling out promises of cash handouts, basic pension for all, full medical insurance subsidies, shares and other popular policies as if Christmas has come early this year.
Only missing is Kenneth J in a Santa Claus suit.
Let’s be honest. His proposals are indeed very attractive. Who doesn’t want freebies? Except that he has forgotten about the old adage that `nothing is free’.
His proposals would have been solid if he had accompanied them with the ways and means to make them sustainable. Just stating that RP’s aim of promoting “a more equal distribution of the nation’s wealth without having to resort to redistributive measures like higher tax rates” and “we will do this while reducing the government’s ownership of the economy, in line with our belief in free markets and democracy,” is not good enough.
Look at what has happened to Greece.
Greece is somewhat like Singapore. Although compared to Singapore it is a big country (which country isn’t?) it is relatively small. It doesn’t have many natural resources except for fantastic scenery and agricultural land. But it also gets a huge chunk of foreign exchange from its workers working overseas.
During the boom years of the late eighties and nineties, Greece rode the global prosperity wave and flushed with new found wealth, successive governments instituted populist socialist policies like what Kenneth J has proposed. Of course it culminated in the 2004 Olympics which many financial analysts had warned that Greece could ill afford. But they went ahead anyway spending borrowed money which they thought could be paid from future earnings.
The future came. It was in the form of the 2008 financial crisis when Greece was one of the hardest hit countries because the government had decided to put all of its eggs in one financial basket; the same basket that had caused the collapse of the big banks.
Heavily in debt and unable to pay for all the `freebies’ that previous government had given out, Greece had to beg and borrow from the IMF and the ECB and some other financial institutions; at a price of course.
Greece had to agree to austerity measures which included cuts in government spending amongst others. Unemployment shot up and to cut a story short, the people suffered.
This went on for about 7 years!
Then came the new government which came to power on the back of more populist promises. They promised to end the austerity measures.
They were voted in.
The problem now is that Greece is practically bankrupt. They simply could not pay for the day-to-day running of the government without borrowed money. And the lenders and creditors refused to offer any cash unless Greece submitted to their demands.
This is Greece we are talking about. The country that gave us democracy, and to fanfiction geeks, Zeus!
A once proud country reduced to a bankrupt nation having to beg for financial assistance and having to endure humiliation on the international stage.
My point is; the prosperity that Singapore is now enjoying can go up in smoke within a very short time if we have an irresponsible government that gets elected on merely populist platform.
And this is a stark warning not only to the opposition parties, but to the PAP as well.
If you think the S300 billion or so that we have in our national savings is a lot, well think again. The US is now in debt to the tune of more than a trillion US dollars. I cannot even wrap my mind on how big that number really is.
It is all fine and dandy to redistribute wealth. I am all for it. But do it responsibly and most importantly sustainably because the ones who would have to bear the costs should something went wrong would be the younger generation.
I would love to get the $500 dollars pension in my old age. But if it means that my sons and daughters would have to prostitute themselves to the financial institutions, then I’d rather not.