Govt borrows over Rs1 trillion

[WishLivePak]

Yet you felt the need to criticize someone else's ability...was he by any chance writing his term paper on PDF?


Asking the depth of your knowledge regarding economics or finance in a thread talking about loans is very much valid!


I see....It is no surprise when the govt is taking multiple loans without a future aim of the how portion of paying it back when the loans are not put into the revenue generating loop....

Trolling, remember.

 

[I.R.A]

The gov. so far is only financing deficits and making no efforts to cure/fix deficits. My guess is that it will keep on adding debt, keep taking loans and keep dollar rate artificially low till it runs out of time and money (election 2018), their goal right now is to max out on all the credit cards, then the next government comes to pay taxes(austerity measures) and then they'll have the political edge. The projects which gov. is right now funding are "lolly pop" projects. These are not self sustainable(you can say negative NPV), will run in losses and will be given subsidies to keep them running. Then next gov. will come to power and run into massive massive problems, then current party will say that we were so much better than these guys, look what they've done.
Politics as usual. Life goes on.

Principal rarely gets repayed in order to maximize expenditure. The assumption is that the economy always keeps growing in the long run so the debt level stays more or less the same as a percentage of gdp (so you have a decent credit rating and can keep borrowing more). Maybe a government can manage to add loads of debt but eventually someone will have to make austerity measures in the future and get that debt level back to a more sustainable level. Debt in its absolute value rarely goes down, debt as a percentage of gdp is what they're after and that's what matters. Sometimes you could get lucky just by rigging gdp figures as well. Like this gov. just did by simply artificially lowering the exchange rate so nominal gdp in dollar figures looked much higher than what they should have been.

The banks will sell those bonds to other banks. They have their ways.

Good post thanks for sharing.

Irrespective of any government in Pakistan, what is your take on say profitable sound projects that can be undertaken once and for all to make things a bit better (apart from temporary solution of privatisation, though it will rid us of loss making entities)? And how do non tax and duties sources of funds are accounted for in books of Government or for that matter in budgets, like "President surplus fund", "royalties" etc etc?

 

[Finer]

I don't mind as long as those money are invested for the long terms such as highway, energy projects, Gawadar projects and more. While education should be important for Pakistan, but investments on improving the economy is the way to stabilize Pakistan means more money for Pakistan, thus able to pay off with loan payment plan as well.

Under PMLN's government, a lot of energy projects and highways have been invested so far with already billion dollars spent. So, i was thinking how he gonna continue with the investment unless he borrows more money to keep the investment going on as its should be.

10-20 years later, Pakistan would be in better position because of economical policy which is something Imran Khan is not taking important thus Peshawar is not being developed properly.

 

[Viper0011.]

According to State Bank’s latest report, the government borrowed Rs1.029tr during July-February 2014-15 from banks, reflecting poor health of the fiscal management. — Khalida Haq/file
KARACHI: Government borrowing from scheduled banks crossed Rs1 trillion in the first eight months of this fiscal year.

According to State Bank’s latest report, the government borrowed Rs1.029tr during July-February 2014-15 from banks, reflecting poor health of the fiscal management.

The debt stocks as percentage of the GDP rose to 42.9pc in FY14 from 42.3pc. It sharply rose from 31.3pc of the GDP in FY10.

Published in Dawn, March 13th, 2015
No clear strategy from out government.
@syedali73 ,@DESERT FIGHTER ,@BetterPakistan ,@Pomegranate ,@Menace2Society ,@Color_Less_Sky ,@Green Arrow ,@Imran Khan ,@Zarvan ,@Akheilos ,@faisal6309 ,@Leader ,@war khan ,@Leader ,@AZADPAKISTAN2009 ,@nomi007 ,@Dr. Stranglove @Jazzbot ......Your thoughts.

I don't know how much you know about economic and strategic planning. But the "Trillion Dollars" or rupees borrowed, were give to some people's checking accounts or borrowed to complete projects?

How do you grow a poor country like Pakistan's economy without starting projects, which will create jobs, and finish these projects, resulting in more business, traffic, trade and jobs created!!

Last thing, if the money was borrowed from local banks, its a GREAT thing. As the interest if paid to the local banks and that hundreds of millions in interest, stays inside the country and further results in banks making investments as the interest received from the government provides profits.

Just so you know, ALL countries on the planet, including the US, French and others, went through phases of higher debt ratios compared to GDP at times, to invest inside the country and to grow the economy. The write is biased as he's not mentioning any breakdown of debt investment into long term projects, and associated return. The article without such important detail is just propaganda and useless!

 

[I.R.A]

The write is biased as he's not mentioning any breakdown of debt investment into long term projects, and associated return. The article without such important detail is just propaganda and useless!

What are these projects?

 

[Viper0011.]

What are these projects?

Read my post twice, take a deep breathe and then type a response. You are asking the same question I am. No one took a trillion dollar and sent it to some people's checking accounts. This much money, in the shape of loans, is "Recorded" in the bank for projects. The writer needs to "list those projects", vs. showing paid journalism.

 

[I.R.A]

Read my post twice, take a deep breathe and then type a response. You are asking the same question I am. No one took a trillion dollar and sent it to some people's checking accounts. This much money, in the shape of loans, is "Recorded" in the bank for projects. The writer needs to "list those projects", vs. showing paid journalism.

Ok my bad then, sorry.

@Fallen King you seem to be supporting this borrowing, any idea what these projects are?

 

[Faiez]

Good post thanks for sharing.

Irrespective of any government in Pakistan, what is your take on say profitable sound projects that can be undertaken once and for all to make things a bit better (apart from temporary solution of privatisation, though it will rid us of loss making entities)? And how do non tax and duties sources of funds are accounted for in books of Government or for that matter in budgets, like "President surplus fund", "royalties" etc etc?

"books of government", lol I really don't know how they account for everything...

Me being libertarian (the free market guys), I'm against anything run by government except courts, a decent police force and a minimalist army (solve problems with diplomacy). I want a society where any wealth created by an individual stays with that individual and he alone decides what to do with his wealth. Meaning no sales tax, no income tax, no property tax, no corporate tax, no tax at all. And make all taxes voluntary. You pay if you want to, like a charity organization. Or perhaps a very minimal sales tax like 1% or something. All infrastructure projects carried out privately. Say there is need for a new road. Now someone can start a campaign to raise funds for that road and if he (or the organization/company) can raise enough funds, then the project is completed. This way only feasible/sustainable/profitable projects will be funded, meaning funds go where they are most needed. Government just makes sure that a basic justice system keeps operating. And removes all/any regulations that create barriers for business. Government does not fund education or health either. So a minimalist government, that's my ideal society, a free society.

And remember, income equality is communism. Look up communism if you think I'm making it up. Income inequality is a good thing, not a bad thing. Rich and poor should always exist, that is the sustainable way.

 

[I.R.A]

"books of government", lol I really don't know how they account for everything...

Me being libertarian (the free market guys), I'm against anything run by government except courts, a decent police force and a minimalist army (solve problems with diplomacy). I want a society where any wealth created by an individual stays with that individual and he alone decides what to do with his wealth. Meaning no sales tax, no income tax, no property tax, no corporate tax, no tax at all. And make all taxes voluntary. You pay if you want to, like a charity organization. Or perhaps a very minimal sales tax like 1% or something. All infrastructure projects carried out privately. Say there is need for a new road. Now someone can start a campaign to raise funds for that road and if he (or the organization/company) can raise enough funds, then the project is completed. This way only feasible/sustainable/profitable projects will be funded, meaning funds go where they are most needed. Government just makes sure that a basic justice system keeps operating. And removes all/any regulations that create barriers for business. Government does not fund education or health either. So a minimalist government, that's my ideal society, a free society.

And remember, income equality is communism. Look up communism if you think I'm making it up. Income inequality is a good thing, not a bad thing. Rich and poor should always exist, that is the sustainable way.

Meet Mr @jamahir (if you have not already met him) you will find his ideology interesting (I hope)

He is alos a jhala (no offense ) just kidding.

 

[Faiez]

Meet Mr @jamahir (if you have not already met him) you will find his ideology interesting (I hope)

He is alos a jhala (no offense ) just kidding.

Already seen his posts...We have similar ideas...

you mean a "chhalla" ( ) ?

 

[Viper0011.]

"books of government", lol I really don't know how they account for everything...

Me being libertarian (the free market guys), I'm against anything run by government except courts, a decent police force and a minimalist army (solve problems with diplomacy). I want a society where any wealth created by an individual stays with that individual and he alone decides what to do with his wealth. Meaning no sales tax, no income tax, no property tax, no corporate tax, no tax at all. And make all taxes voluntary. You pay if you want to, like a charity organization. Or perhaps a very minimal sales tax like 1% or something. All infrastructure projects carried out privately. Say there is need for a new road. Now someone can start a campaign to raise funds for that road and if he (or the organization/company) can raise enough funds, then the project is completed

Ok, dude. Help me understand.......the Free Market is a great idea. But a market to be "free"......there has to be a "Market" first. Pakistan doesn't have that market that can be freed!! So you have to "build" a market for it to be "freed" one day!

Second: No sales tax, income or property tax.....who's going to open schools up? Universities, research for disease, treating epidemics, school schildrens getting shots for MMS and stuff that you get in an early age, roads so goods and serices can be delivered to the "Market" so a common man can MAKE the money you think everyone should have 100% control over, etc, etc??? How do you maintain a "police force" to keep the peace on the streets or a military to protect you???

 

[Faiez]

Ok, dude. Help me understand.......the Free Market is a great idea. But a market to be "free"......there has to be a "Market" first. Pakistan doesn't have that market that can be freed!! So you have to "build" a market for it to be "freed" one day!

Second: No sales tax, income or property tax.....who's going to open schools up? Universities, research for disease, treating epidemics, school schildrens getting shots for MMS and stuff that you get in an early age, roads so goods and serices can be delivered to the "Market" so a common man can MAKE the money you think everyone should have 100% control over, etc, etc??? How do you maintain a "police force" to keep the peace on the streets or a military to protect you???

-voluntary taxes.
-minimal involuntary taxes to keep the courts and a police force operational.
-private sector can do education, healthcare, road infrastructure.

search on internet for "libertarians", they have all the answers.

Don't be a socialist !

It's only a matter of principle, you spend your money for you vs they spend your money for you.

 

[Viper0011.]

-voluntary taxes.
-minimal involuntary taxes to keep the courts and a police force operational.
-private sector can do education, healthcare, road infrastructure.

search on internet for "libertarians", they have all the answers.
Don't be a socialist !
It's only a matter of principle, you spend your money for you vs they spend your money for you.

I know what libertarians means and stand for. But what you are missing is, the Libertarians run on an existing system. If someone was running Pakistan today or the US like 100 years ago, and there was no tax and there was no way of collecting income, these places would still be in 1800's. Its the tax money that helps the government build a system, the economy and all. By which, PEOPLE including libertarians, MAKE money, and libertarians then complain about the system.

If there was NO system to begin with, the wealth wouldn't exist, the ability to open up schools, research, create jobs and wealth wouldn't exist. We'd all be growing tomatoes and potatoes to sell so we can barter and bring food home. The world's move on from the Caveman's world about a few thousands of years. Libertarians still live in that world. But yet utilize the system build to complain about the system so they can keep their wealth!

 

[Faiez]

I know what libertarians means and stand for. But what you are missing is, the Libertarians run on an existing system. If someone was running Pakistan today or the US like 100 years ago, and there was no tax and there was no way of collecting income, these places would still be in 1800's. Its the tax money that helps the government build a system, the economy and all. By which, PEOPLE including libertarians, MAKE money, and libertarians then complain about the system.

If there was NO system to begin with, the wealth wouldn't exist, the ability to open up schools, research, create jobs and wealth wouldn't exist. We'd all be growing tomatoes and potatoes to sell so we can barter and bring food home. The world's move on from the Caveman's world about a few thousands of years. Libertarians still live in that world. But yet utilize the system build to complain about the system so they can keep their wealth!

You just don't know what a libertarian is...I'm sorry but you're misguided by the left-wing/right-wing propaganda nonsense.

Please look up libertarianism, better understand what it is. Learn some economics too.

If you mean there is a need for a central bank and a need for a national currency etc, you may find varying views within libertarians. Some would say that private banks/institutes/individuals could setup their own currencies etc. while others might say that there still should be a national currency etc. Also, some would say there should be absolutely no government at all, every man for himself and no justice system at all. That's a little too extreme in my opinion. I believe there should be a minimalist government.

Simply because the government is not powerful, doesn't mean schools, universities would disappear...People will open schools, universities, hospitals as needed. It's only a matter of whether gov. should fund/operate these by taxing everyone or should people themselves fund/operate them on their own.

Bold parts show a lack of knowledge.

 

[jamahir]

He is alos a jhala (no offense ) just kidding.

you mean a "chhalla" ( ) ?

i think he means "jhola" ( cloth shoulder bag ) which according to popular belief in india was carried by every socialist until the 90's.

or maybe the male equivalent of "jhalli" ( the crazy one ).

Already seen his posts...We have similar ideas...