Submitted by Afra Raymond The 2017 budget was presented on Friday 30th September 2016, with the known decline in State revenue having the expected impact. As shown in the graph and table, the Estimate of Revenue is now down to $47.4 Billion, which is itself a doubtful figure as I will show, with Estimated Expenditure…
The 2017 budget was presented on Friday 30th September 2016, with the known decline in State revenue having the expected impact. As shown in the graph and table, the Estimate of Revenue is now down to $47.4 Billion, which is itself a doubtful figure as I will show, with Estimated Expenditure at $53.475 Billion. That […]
Even the once big and bad T&T economy has met some tough times.
The Trinidad government is spending about a third of all the income generated in the island. While that is not as bad as Canadian governments, which collectively spend about 40% of all Canadian income, it is a very high level of government spending for a Third World country, and the Trinidadian people don’t get much for the money, since the police are corrupt and violent, and the health care services are unreliable.
ANYONE ….no matter how small or large they are…. who spends more than he earns is an idiot – and will suffer the inevitable consequences.
The only difference being the height from which the large ones will have to fall…
@Bush Tea
Why is that simple golden rule so difficult to understand?
You need to add the caveat ‘spends more over a sustained’ period.
#JAs
@ David
You need to add the caveat ‘spends more over a sustained’ period.
+++++++++++++++++++++++++++++++++++++++++++++++++++++
WRONG!!
It is precisely that caveat that lead them to do shiite.
What is a ‘sustained period..’?
These selfish, low-minded, brass bowls all seek to spend more than they earn FOR THE ‘BRIEF PERIOD’ THAT BENEFITS THEMSELVES, – with the expectation that those coming afterwards will compensate. A recipe for disaster.
Expenses should NEVER exceed income.
Capital expenses should be arranged so that commitments for repayment fall WITHIN the revenue available.
Any expenses outside of this threshold should be completely illegal. It certainly is IMMORAL.
It is gross selfishness, greed and lack of vision that drives us to spend what we did not earn. It is just STEALING ….only this time from our children and grandchildren….
Loans,credit and pay later plans are the bane of the masses.
@Bushie
With the best budget in the world sometimes the vagaries and unpredictability of life factor.
@ David
Valid point.
However, one should NOT PLAN to steal from one’s children.
Should the ‘vagaries and unpredictabilities of life’ create the unavoidable situation where such borrowings are temporarily unavoidable, ABSOLUTELY URGENT ARRANGEMENTS should be made to repay – with interest …and at the very first opportunity.
Any parent who needs to borrow from their children should know that they are doing shiite, …and should seek to make urgent adjustments.
National (and human) development is about ensuring that the next generation is BETTER OFF than the current one…. not worse off …and in shiite debt IMPOSED by greedy parents.
The gist of Keynesian economics (look up the famous British economist John Maynard Keynes) is that governments should try to save in prosperous years of the business cycle, and dissave (run deficits) in the bad years of the business cycle — to stimulate demand when the economy is in recession.
So I don’t blame the Trinidad government for running a deficit this year, but they should have been saving a lot (rather than only a little) during the Kamla years.
Small economies that depend on exported goods and services should expect to have unsustainable levels of GDP and ipso facto unsustainable levels of Government revenues and ergo propter unsustainable levels of expenditure ( both public and private). There should therefore be no surprises here. Like hurricanes and earthquakes we have to learn to live with them. A partial solution is diversification of the economy and hope that the demand for,and prices of the products of all sectors do not all decline at the same time.
It is always easy to blame politicians for the economic roller coaster processes of the Economy. But since they always claim praise for the good times ,it is only poetic justice that they should shoulder the blame.
If a country is unique in its natural resources why does that country want to sell off its national assets to foreigners for a mess of split pea soup?
@ Chad99999
I see like me you are a Keynesian. I agree; some of the petroleum largesse was shared with T&T’s CARICOM brothers. That would account for the lower levels of savings/ Foreign reserves.
@ Bush Tea
Are you saying that I should not borrow to build a house in which my children live and are likely to inherit after I am gone?
Are you saying that the next generation should not pay for the Airport , Seaport, 4 lane highways,hospitals etc that this current generation has borrowed to build? They are benefiting from these loaned financed assets. There are no free lunches in life.
@chad99999 and Bernard
You are aware T&T government has built a Stabilization and Heritage Fund which the government has been dipping into of late for budget support?
https://guardian.co.tt/columnist/2016-06-12/heritage-and-stabilization-fund-usage
David
You rarely give me credit for reading the papers.
Yes, I am aware that Trinidad has a Heritage & Stabilisation Fund financed by excess oil revenues. It was set up in 2007, the successor to a previous Stabilisation Fund established in 1999.
That is why I said Trinidad only saved a LITTLE under Kamla. I didn’t say they didn’t save ANYTHING.
I believe the Trinidad H&SF has about $5B USD. This is the total amount Trinidad saved over a 15-year boom period (1999-2014) in oil prices.
Rough figures: In the same period Norway saved over $300 B USD in its Heritage Fund. Norway produces about 16 times the annual oil output of Trinidad but saved more than 60 times the amount Trinidad saved. In fact, Trinidad only saved oil revenues that exceeded estimated (budgeted) amounts, rather than saving a percentage of the total revenue increases.
@David12:55pm
Thanks very much for the information, David. But that is the purpose of the Fund(s),to tide the government over the period of falling revenues/ falling foreign exchange reserves. Historically petroleum prices bounce back up. That is the nature of the economic system of which we are part.
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