Saturday, June 21, 2014

Whose money, any way ?

Many governments want to stay in power by spending huge money for waiving the debts that are owed by farmers, students,etc...  This is a ruse to seek the support of those people forming the majority of vote banks.

But what these so-called power mongers fail to understand are the implications of such populist schemes. Why they should bother any way. After all it's no their money....only the public exchequer to worry.

The after effects of such waivers are
-  drain of valuable resources that would have been otherwise invested in some long term and     productive uses like creation of community assets like water tanks, school buildings and infrastructures such as roads, bridges,etc...
-  strain on the tax payers who are usually burdened with additional and new taxes
-  corruption of minds of the honest repayers to default in future
-   creations of impression that govt will come out with waiver program and no need to repay any loan
- business of banks and financial institutions are affected in the long term due to poor credit culture and risk-aversion of banks to lend more.

Really a bad precedent ...by the law makers . Then how the citizens will abide by the laws passed by them.

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