Skip to main content

No Debt Ceiling, Never leave Debts for future generations, Will Singapore default debts?

 

No Debt Ceiling, 

Never leave Debts for future generations,

Will Singapore default debts?  


[Debts involve investment risk, even if it is guaranteed by the government.  This is especially true when investments and risks are lacking in transparency, not disclosed.  And as Lawrence Wong reminds us ‘things can happen very quickly’. So do investments and risks. ]    


In principle, Singapore will not face the debt ceiling problem like the US.  Government will issue more bonds, securities when we have more CPF monies, and more revenues. 


We also operate a balanced budget and most importantly, the government insists on no debts for future generations.  So, it is very unlikely the government will default on debts, especially CPF monies.  


Government  issues different kinds of securities as debts.  These debts also obtain very high credit ratings.   However, they are involved in different types of investments. 


All investments involve risks and risks are related to returns.  MAS and GIC have low risk preference while Temasek involves higher risk and higher return. No one can guarantee a zero risk investment, even if you put money in a bank.


If you hold US$ securities, or place money in a US bank,  there are risks.  The recent debt ceiling or bank bankruptcies show the potential risks. Not to mention, FTX or other cryptocurrencies or high tech investments.   


So, there is a potential risk that our investments face.  This is particularly true when there is no transparency, no check and balance. 


One way to avoid default is to raise tax, cut subsidies, welfare, extend retirement age, and cut pension benefits.  This is what the Western European countries do, like the recent happening in France.  


Singapore did the same things on a smaller scale, CPF withdrawal age, GST, less medical subsidies, tuition fees...  

Lawrence Wong reminded us that things can happen very quickly in politics.  In the financial world, things can happen even faster than politics, just look at the bank bankruptcies.   


We may not see debt default in Singapore.  In return, we will likely see more increases in taxes, fees, expenses, but less medical, social benefits.   And we  don’t know whether this is due to investment risks or a balanced budget.

Comments

Post a Comment

Popular posts from this blog

Sub-standard PAP and the Singapore education system

I make a 'policy shift' when I hear the debate of right politics, constructive politics and sub-standard opposition. My original aim is to discuss about “Su Dongbo, Zhang Juzheng and Singapore education system”. The discussion will end with a sub-standard PAP, in particular from the assessment of the quality of PAP potential candidates. Another policy shift is to discuss it like a play, a drama and make it more entertainment rather than a sub-standard political discussion. Act 1 Gangster’s demand Imagine a sense in the Hong Kong's gangster movie (or a godfather movie), the gangsters' master is shouting at his poor opponent and demand him to give a price for his wrong act. The poor guy without any resources can only offer his body or his service to work for the master. Back in his own chamber, the master is still not satisfied and continues to shout 'don't play, play, you think you are hero, you think you are tiger, or superstar or acting ...
275 comments
Read more

EBRC objectives: Stop “Out of Aljunied”, Stop SDP Breakthrough and “Negative-Asset” Ministers.

First of all, we have to congratulate the Electoral Boundaries Review Committee for creating more competitions, especially, multi-cornered competitions in the East. When making changes, EBRC aims to achieve 3 goals: To prevent “Out of Aljunied” for Workers’ Party.  This is the most important objective. To prevent Singapore Democratic Party making any breakthrough in the North and Central.   To look for a solution to retire “negative-asset” ministers or reduce PAP damages. From the reported claims from different political parties, we will expect multi-cornered contests not only in single constituencies but also in group representative constituencies. The PAP hopes to have a repeat of 2011 Presidential Election. Then Tony Tan won the Presidency when he got only 35% of the votes, a narrow win.However, a win is still a win. He did in even in the very last minute, after recounts of votes.    How to achieve multi-cornered contests? By i...
65 comments
Read more

Is Prism Project Another Central Planning of the PAP?

There are 3 scenarios under the Prism Project#1 of Institute of Public Policy.  However, it looks more like the central scenario planning of the People’s Action Party. From the instructional menu of Prism Project Primer #2, participants were guided to a situation in 2022 and they have to imagine, within the Primer framework, to come out with 3 possible scenarios in Jun-Aug 2012.  2022. What a coincidence! Not long ago, PM Lee declared that he would like to hold the prime minister post for another 10 years. The other coincidence is the similarity between the 3 scenarios and the candidates of PE2011. How competitive and sustainable are the 3 scenarios to the people of Singapore and to the PAP?   Will the scenarios produce competitive and sustainable Singapore, Singaporeans or the PAP?  Perhaps, as what the Chinese say: planning cannot always catch up with changes.   And planning sometimes turns out the wrong, bad and unexpected results, espec...
50 comments
Read more