Fiscally Irresponsible

The Finnish government today approved an extra 1.5 billion in debt burden to cover expenses in this budget, for a total of 13 billion in debt. That might not sound like much for some countries, but it is significant for a country of 5.8 million people. It works out to €2,250 per capita

I was talking with a colleague about this, and mentioned how governments taking on debt is taking money out of our future pockets. He didn't quite get this at first, bit all debt requires repayment and in Finland it is about 5 billion in interest payment obligations on already existing debt. Without that debt of about 200 billion, they would have still had to borrow around 8 billion to cover the budget.

This is how all debt works of course, where the more we borrow, the less we can spend our resources on. And in a culture where we are driven by instant gratification, in a on-demand consumer culture, with a line of credit available; it is very easy to get into debt. 10 dollars in interest repayments a month, turns into 100, and then 1000.

But, what a lot of people don't seem to realize is that when this is done at the national level, it means that future buying power of citizens is also reduced. Not only that, in institutional systems where there are protections, like banking, those bailouts serve to protect what should actually be allowed to fail. Instead, it supports a broken model, prolonging failure.

This only really happens in centralized systems, where the assumption is that the status quo model is better than any alternative. The other assumption is that failure of the banking system, means that everything fails. However, while it would be highly disruptive, this is not true.

For example, the only known economic that works perfectly, is nature.

Nature never fails.

There is never a collapse of the natural economy, because it is always perfectly balanced under the rule of, energy cannot be created or destroyed, only transferred. What this means is that while components of the natural economy "fail" on the human sense, like suns dying ad dinosaurs being hit by meteorites, the balance is always 1:1, as the energy just gets transferred to somewhere and something else.

There is no waste, there is no leakage, there is zero corruption.

In the human experience however, we are always going to be imperfect when we make rules, because our existence depends on us trying to survive. Nature doesn't care if we live or die, but we do, so we act in ways that we believe will meet our human needs. Whether they do actually meet them, or they don't.

But, we are also imperfect in identifying what we "need" in a sense that we can get confused and influenced into not meeting our needs, by seeing that the resources required is money, rather than money being a token for marking trade of the resources required. Instead of satisfying human needs, we have created a system that identifies money collection, as meeting needs.

And, this problem is exacerbated in a centralized system, as with limited insight into individual needs, and money as the representation of meeting need, resources get poorly allocated, no matter whether the intentions are good. It is like me choosing for everyone who reads this article, what they will eat for dinner. As I will eat it too, will I choose something that is good for me, or good for you? Will it be too spicy, or not spicy enough for you? Will it cater for food allergies, preferences, cultural needs? Unlikely.

Centralized decision making doesn't work.

And, since no perfect decisions can ever be made, the best we can do is make sure that as little damage is done by the decisions we make, by not applying them unilaterally across entire populations, magnifying the errors, compounding the impacts. And, the only way to do that is through a decentralized system where errors are made, but they are more localized, and what works and what doesn't is continuously evaluated through usage and opt-in choice. Businesses will start and fail, just like the suns in the universe, but the entire system can survive and even thrive, as decisions get made that meet the needs of individuals, but still meeting the needs within a framework of a community.

Essentially, the way we govern now might have been the "only way" at some point in history, but is antiquated, superseded by innovation that allows us to organize ourselves in new ways, at scale. We can collect, process and evaluate the needs of individuals with greater clarity, and still build systems where individuals can make their own decisions, without risking the entire structure. While highly disruptive when making the change, once we are moving in that direction, the processes within the system itself will start to correct and account for the changing meta, improving itself through all activity.

Or, we can keep what we have, and pretend that an economic crash, is natural, and keep pretending that all the consequences of a broken economy, is just the way it has to be. Getting more and more into debt, until it collapses and we reset, for the next round.

Systematic slavery.

Taraz
[ Gen1: Hive ]