An item from Kenya exemplifies much of what’s wrong with articles about economics: namely the writer refuses to define his terms.
Here’s a quote…
It’s that time of the year when our government starts preparing its budget for the next financial year, usually focused more on its planned expenditures rather than revenues. Kenya will likely be brought to its knees by the insatiable appetite of our public sector to live large. If we keep on this course, our lenders may soon place us on the table for auction. We are neck deep in debt, and we are borrowing impulsively, but the taxpayers have not always felt the benefits of the massive borrowing. Our national revenues are not growing even half as fast as our expenditures.
We need to enforce austerity in the same way that the highly indebted Western countries are doing — bite the bullet! Borrowing by counties must be subjected to parliamentary approval as required by the Constitution, except for short-term facilities that can be approved by their assemblies. Or else, we shall perish.
… because it’s meaningless. The article talks about lenders and borrowing and debt — but in what currency? In Kenyan shillings, or in foreign currency?
If the debts are in foreign currency, then there’s a problem. But if the debts are in Kenyan shillings, then the Kenyan government can always create more shillings.
The article does not explain which currency. Therefore it is meaningless. In fact, since the author talks a lot about taxpayers and revenues, he is probably talking about debt in Kenyan shillings, which is trivial.
And get this…
We need to enforce austerity in the same way that the highly indebted Western countries are doing — bite the bullet!
Really? Which “Western countries”? Those that do business in their own currency (like the USA) or those that do not (such as euro-zone nations)? Again the author does not clarify. Hence his entire article is meaningless.
We see this same meaninglessness every day on the Internet. People believe it as long as writers use magic words such as “debt.”
Comedian George Carlin said the following…
I wish that Carlin could have included this in his routine…
People in his audience would have laughed at how the joked reflected real life. But as soon as audience members went home, most of them would have fallen back into their trance, because bullshit offers something for everyone.
For rich people in the rentier class, the “national debt crisis” (or public debt crisis) directs people’s attention away from the truth…
Why are you complaining about private debt (such as catastrophic medical debt or student loan debt) when the national debt is far more serious? Actually you are a freeloader, since we have not (yet) asked you to pay back $19 trillion on the public debt that you have benefitted from. So shut up, keep paying us, and be grateful!