What Happened To Prudence?
I think I have woken up on another planet. For the last few years I have been living on a planet where we were told that prudence in government spending was the fundemental plank of the governments plans for the future. We were told that the only way for the country to be successful in the future was if we were prudent with our spending.
Suddenly everything is different, apparently. Now the way to make the country successful is to borrow incredible amounts of money, collect less tax and encourage consumers to go out and spend, spend, spend.
I have trouble getting my head around this idea. We are told that too much borrowing and too much spending has brought us the problems we see in the financial industry. It has led to thousands of people facing foreclosure on their homes. We have been through a decade of excesses in all areas and surely that is what has brought us to the position we are in now.
Reducing the cost of living is a good thing and will help lots of people who are struggling with their utility and food bills but if the government now want to encourage people to get out and spend on unimportant luxuries to boost the economy it is dangerous advice for people who are already deeper in debt than they can really afford.
So what happened to Prudence? I think we can safely assume she has left the building and won’t be back for a while yet.
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The government has no choice but to borrow from the future to try and stave off the worst of the recession.
I agree it’s a far distance from prudence, but then they never were prudent. If they had, we’d have much more fiscal flexibility to avoid taking on all this debt.
Unfortunately it’s the young who’ll pay through higher taxes in the future. At least the older generations got a property boom out of it.