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asigrowolderiwonder

Listed below are comments made by asigrowolderiwonder between Wednesday, 23rd July 2008 and Wednesday, 23rd July 2008.

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Taxing the immobile 10:20pm on 23 Jul 2008 Grumpy Bob and Janchild would appear to me to be raising the right questions.

When a family's income is reduced they have two options - borrow or cut their expenditure.

Borrowing tends to lead to problems unless their is an upturn in circumstances before the weight of debt becomes to great.

Tightening the family belt is not much fun but tends to lead to a more prudent attempt to manage reducing income.

When a business faces declining revenues they can attempt to mask it by turning to debt to cover costs. Unless there is an upturn it leads to problems and ultimately insolvency. Prudent organisations address their cost base and reduce this to "survive the storm" whilst taking measures to assure revenue for the future. You only have to look at announcements from some of the global organisations now to see that prudent business leaders are trimming costs in preparation for difficult time.

Why is it different for Government? Surely when there is a downturn the government needs to address underlying cost. If it increases borrowing as a means of funding then unless there is an upturn they will face the unpleasant reality of managing debt. Seeking to raise taxes on an ongoing basis is not sustainable.

In the Western world we have an enviable standard of living (at the moment) compared with many countries in the developing world. If in the long term our standard of living is not sustainable then isn't time for someone to stand up and say so and start to manage the economy accordingly?

Surely as companies seek to flatten organisations to minimise un-necessary costs and seek other means of reducing expenditure, whilst preserving essential core functions and families trim non-essential spending to allow them to continue, the government should do the same?

There are clearly significant issues to manage here in terms of social obligations that must be met but I cannot believe that the government is unable to quickly address its underlying cost base and make changes. If it feels unable to do so, then maybe some of our business leaders, who have to make difficult decisions and "ride a storm" need a greater hand in making decisions. Alternatively a dose of common sense from some family leaders trimming their belts need to be given a stronger hand.

Or is this something to do with Politics and not being prepared to actually address the problems we face in the future?

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