Thanks, i’ve learnt a lot from you guys :-))

Am still learning.

cheers

The best is yet to be! from TOC.

are you sure it doesn’t help the economy, what is the formula for GDP do you remember? one of the main component is G, government expenditure that consist of welfare payment and the multiplier effect of gov payout is evident, so please, do not say that it doesn’t help the economy, cos it does…but the impact, that’s another thing. perhaps you should relook at some econ text book? before you make your judgment, reading news is fine….but knowing the foundation is important.

“But pumping money into workers’ hands does not save jobs.’ another mistake from you…pumping money, or giving handout to boost consumption helps to save job. with the money to purchase stuff, it helps to increase local demand…and that will knock on to other factor…better then trying to give handout to retain job when there is no external demand…

Mr TOC has been able to counter your argument effectively, but what you are doing is just repeating your same old words…

The purpose of the unemployment benefits is purely economical because they have a much larger domestic consumption. Domestic spending is what drives their economic, not exports. They have one of the worst social safety net in developed countries.

With 200% exports and 40% consumption in Singapore, unemployment benefits is NOT going to stimulate the economy much. Spending the unemployment benefits is NOT going to create jobs to go around like what the US could achieve.

If you read the news, MAS has been adjusting the currency exchange rate to achieve a balance. Is not as if they don’t know. The rational of keeping companies afloat is that, utlimately it is them who decides when to fire the workers. Handling money to workers do not prevent the companies from firing workers. At the most, you have to design stimulus policies to reduce the impact of business loss to companies so that they are less desperate to fire workers. Maybe you have a better plan to help the economy. But pumping money into workers’ hands does not save jobs.

It is not as if there is no social welfare program around.

But you want to argue for more social welfare or change the reallocation of social welfare resources, don’t link it to the economy. It doesn’t help the economy. That is a fact you must accept. Find another reason.

p/s: May I suggest upgrading forum so that old articles with recent discussion can be easily accessed.

“For example, one of the first things that the US did when the recession hit was to increase unemployment benefits.”

Payment for unemployment benefits is part of Government expenditure, which is a main component for GDP. furthermore, when unemployment benefits, it will have multiplier effect that influences consumption etc….

from what i see and what i have said before, Mr WWW is somehow repeating the justification of our dear leaders…

Thanks for your reply. Unfortunately, you overlooked several points:

(1) As one other reader has pointed out, it is a bit difficult to see how improving the export competitiveness of our firms will help in the short term when our export markets are all collapsing. The need of families that have had members thrown out of work is more immediate, and does merit more government spending – improving export competitiveness should be a longer term objective. Furthermore, the latter also depends on factors such as the strength of the S’pore currency – arguably, depreciating the dollar further could have a larger effect on export competitiveness than any money the government throws at the firms, which is in any case an inefficient means of helping them since it does not really discriminate between firms that are fundamentally competitive and those that that are not and which should be phased out by the markets.

(2) On your point [a], there is no confusion – an economic stimulus can take the form of strengthening the social safety net. For example, one of the first things that the US did when the recession hit was to increase unemployment benefits.

(3) On point [b], no one will disagree with you that we should help those that need help. However, the government has tried hard to convince S’poreans that everyone who needs help has received adequate help, which is debatable – first, our social safety nets are so full of holes that many who do need help slip through the nets or don’t bother applying; second, the nets are so thin that it is difficult to say with confidence that those who do get caught in them receive sufficient help. For example, it has been estimated that only about 20,000-30,000 patients (about 0.5% of the population) receive about S$1,000 on average a year in Medifund payouts, which is not much either in terms of patients helped or the size of the help given. There is also a reason why the government does not publish statistics on the number of unemployed people it helps at CDCs.

In any case, the biggest flaw in your argument is how the number of needy people – as measured by S’pore’s increasing Gini coefficient or the government statistics on households, which show wages for the bottom fifth more or less stagnating during the economic boom years – only seems to be increasing (when our birth rates are at a standstill), despite the government’s supposed efforts to “help people help themselves”. Surely that represents some kind of fundamental flaw in the government’s approach.

(4) On point [c], it is difficult to see why the goal to alleviate inequalities should be affected by people who are “jealous” of others who earn more. Such a goal is a laudable objective in its own right, and one reason is that a society that is too unequal strikes most people as being unjust. Having a strong social safety net does help to improve the quality of life, chiefly by reducing the economic uncertainty felt by people, in particular those who meander the fine line between subsistence and lower-middle class status.

(5) Your point [d] is stating the obvious, and no sane person would advocate a return to communism. Then again, the global financial crisis has shown the flaws of free-market “fundamentalism”, so a pure free market system (not that one has ever existed) will succumb to market failure with proper oversight. One reason why the rich are taxed more than the poor is because it is actually economically more efficient – a huge part of the former’s income is unspent, which doesn’t do that much for the economy, while the poor, by necessity, spend a great deal more of their income – and government is the mechanism for rechannelling such income. And you would be hard pressed to argue that the rich in S’pore are being over-taxed – the top rate of income tax is 20%, far below that in other developed countries which typically average 40% or more.

(6) Point [e] might be a better description of S’pore in the 1970s and early 1980s, but the country has actually been moving rather rapidly away from whatever socialistic notions that it might have after independence. Prior to 1980s there was universal, largely free healthcare provided by the government – this was replaced by individual savings accounts with Medisave, et al in the 1980s; prior to the 1990s HDB was not semi-privatised and oriented primarily towards profits – now you have HDB arguing that it has to charge prices not based on costs of building but on the price that its new flats would theoretically fetch in the resale market.

(7) On point [f], it might be better if you did not attribute base motives to people who criticise government policy. That turns the debate into a personal thing without really helping the substance of the debate.

(8) On point [g], certainly the system has flaws but unfortunately you seem to be seeing it from a one-sided perspective yourself.”

Head on !!!! If the accounting book is kept secretive and no question is asked about the doubtful cashflow and figure, the figures can be inflated from the air !

HAHAHA, hell we’re in for the ride of our lives :)

“If your goal is to increase GDP, which is the better way to use the stimulus? Helping companies become export competitive or giving money for people to spend?”

so after you have become export competitive, may i ask who are you planning to sell it to? or are you gonna keep a warehouse full of unwanted stock?

“We need to help people who need help.” really? then then why did Mr V retort the much-respected Dr Lily Neo when she tries to get more aid for those who really need it at her GRC Jalan Besar? do you know what was Mr V retort? is that helping those who really needs it?

“Singapore is more socialist than you are thinking. The majority of revenue is captured through govt-owned and govt-linked companies, and the expenses are spent on public goods (land, transport, education, health service etc.)”

like what was stated previously, the money comes from the people. “and the expense are spent on land, transport and healthcare?” then how do you explain skyrocket land price for nursing home, that is for some elderly, until Khaw has to consider nursing home in JB? expenses spent on transportation? the people are paying the blunt for this transportation. how much for it is subsidies? when fuel increase, price increase. however it doesn’t go the other way. DON’T make it seems as though thos money are been spend on this area. are you naive? or are you, like what some people said, paid to do this?

“but how much are you asking the returns to be?” the answer is simple….most people could have done it better, with a better return if they are given back their 20% CPF contribution since 1+% ain’t much. don’t make it seems as though it is alot WWW and we are asking for too much.

However, i do agree with your last point “The current system is not perfect. There are problems. But it is better to be accurate and offer constructive suggestions than waste energy blaming on the wrong reasons.” but I will like to add one point in. It is better not to waste energy like WWW defending the systems in such a way. both parties need to play a part. as you can see WWW, so many of your points seem so hollow and didn’t voice the perception of alternatives…

I think he knows the any knock-on effect which may be worst (law of unintended consequences. But he is not paid to focus on this so all the right clear-cut logical economic explanation which is not too messy to understand.

“Exports = 200%, domestic consumption = 40% of GDP.”

Where you have to value add with no raw resources of your own and no good global brand goodwill that you have built except to be very good obedient workers. this is the price to pay for stressing too much on one area (manufacturing & servicing for others) without having to build what you can call your very own.

“Singapore is more socialist than you are thinking. The majority of revenue is captured through govt-owned and govt-linked companies, and the expenses are spent on public goods (land, transport, education, health service etc.) rather than a direct payout to individual citizens. Yes, you contributed capital, but how much are you asking the returns to be? Do you actually prefer not paying tax, not doing public service, and to be left on your own? Do you really prefer this?”

Of course we must pay tax. But don’t you feel the many rent-seeking channels that they are doing it and do not you think that it is excessive. sure you know. and people are feeling the pressure. AGAIN, how else they are the HIGHEST paid public service fficers in the WORLD when you are the SMALLEST (i believe) country in the WHOLE SOLAR SYSTEM.

“If you have inferior complex or are perpetually jealous of the highest income group, you are going to feel miserable and grumpy forever. I am not asking you to be contented, but striving for improvement is different from looking sour.”

Not when those garment officers count on an obnoxious level among those highest income group. It is public service we are talking about and it must itself act as a moderating mechanism for society – not as a perpetuating example to bring about a cut-throat mentality.

“I am not asking you to be contented, but striving for improvement is different from looking sour.”

How to when some of us already think that it is the system which is creating the problem, not totally of course and in areas we can easily identify with.

If your goal is to increase GDP, which is the better way to use the stimulus? Helping companies become export competitive or giving money for people to spend?

I suppose you want to mean getting more money to improve the life of the lower income group. This is a fair point to make. The problem is that:

a) You are confusing social safely net with economic stimulus.

b) Social security is not the sustainable way to get people out of poverty. We need to help people who need help. It is not the case that there is no social subsidies. But what percentage of people really need social support, and what percentage are employed but want a higher salary? What is the more appropriate policy for each of these group? Does feeling good with payouts in your hands help you to lead a better life than having the ability to earn more?

c) Closing the income gap is a realistic and useful objective. But what fraction of people are truly concern with this goal, and what fraction are plainly jealous? There is a fine line that makes a huge difference. And how many people has the misconception that social safely improves quality of life?

d) There is not perfect way of income redistribution. But we all know for sure that communism has failed, and that the market is the more practical, although not perfect, way of channeling wealth to the common people. Look around the world. How many get better life by having a better job or better business, and how many people get a better life by taking wealth away from the rich? The market needs to be regulated, not strangled. Incomes needs to be channeled to the poor in the sustainable way by enabling them to earn more, not ransacking the rich.

e) Singapore is more socialist than you are thinking. The majority of revenue is captured through govt-owned and govt-linked companies, and the expenses are spent on public goods (land, transport, education, health service etc.) rather than a direct payout to individual citizens. Yes, you contributed capital, but how much are you asking the returns to be? Do you actually prefer not paying tax, not doing public service, and to be left on your own? Do you really prefer this?

f) If you have inferior complex or are perpetually jealous of the highest income group, you are going to feel miserable and grumpy forever. I am not asking you to be contented, but striving for improvement is different from looking sour.

g) The current system is not perfect. There are problems. But it is better to be accurate and offer constructive suggestions than waste energy blaming on the wrong reasons.

Reading from ST forum, The Times, International Herald Tribute, The Economist? to get more view? how about .gov.sg to get all the ideal information? his answers just seem to be similar to the ideal answer our dear leader give…not objective and neutral answers from IHT, FT etc…

You seem to be well read. Now let me ask you some questions.

What say you. Which is better. A land so small like ours to be shared say among 1million people or the same land mass to be shared among say 5million or even 6million where the top group of 20% get to enjoy good life (some of whom get to have very high discretionary income to the tune of maybe 3 to 4m or more annually) while the rest have to fight for crumbs while the lowest 5% may always be on dependent mode.

The financial crisis has shown us the flaw that is going on with this cut-throat capitalistic way of distribution with casualties like inflation / job losses due to illusionary demand and pricing and taking of unnecessary national risks which could well be best spent on their own countrymen.

Talking about low prices by delibrately encouraging the inflow foreign workers, it will only happen if there are varied jobs for people with the right skill with net $$ inflow into the country at the same time. Else, some people will be left loitering rubbing their feet on the road.

Stability itself is also a cost advantage for productive work. how is this advantage priced & capitalized and the benefits being subsequently redistributed, I think you know more than a lot of people.

“The rest of the world says Singapore is run like a company. It is not because the government is profit-taking.”

You just need to collect 10cents each from 4m people and you will have $400,000/-. I leave you to ponder on the rest of the mechanics on the garment-provided services we need to pay and how on earth ours is the highest paid in the world.

“If you look at the budget records at the Ministry of Finance, you will see that individual income tax is not how the govt gets most of the revenue. Most of the revenue comes from corporate taxes, stat boards, and govt-linked companies, and government-planned investments.”

Well, if the benefits are so much skewed in favour of corporations at the expense of a very “obedient” group of lesser mortals (no minium wage and labour unions just for show) who as yet have to compete with foreigners and as yet have to spent on consumption tax (gst) which itself is a tax. Imagine that your past saving (say you have $10,000/-) is magically reduced by $100/- if gst is increased by 1% assuming that you are going to spend in this country.

For a low-income breadwinner and assuming he spends all $1000/- salary on basic & essential neccessities every month for his wife and one child , effectively he is paying tax $70/- (gst). Multiply across by 12mths, that is $840/- per year worth of tax.

Please do not tell us about misconceptions. The only reason they can get away with all our misconceptions is because they are still weilding a very hard stick with people like you behaving as their intellectual bodyguards. may i know, how much are you paid for your services.

Thanks for your comments. However, your arguments are simplistic on several counts:

(1) On your points [a] and [b], there is little dispute that Singapore’s economy will not recover without a recovery in its main export markets or that there is a high degree of leakage in Singapore’s open economy. But that does not mean that fiscal stimulus is useless, otherwise the government wouldn’t have bothered with its huge Jobs Credit Scheme – the issue here is that the stimulus might have been better targeted at households and individuals to alleviate the pain from the economic fallout. E.g. some parties have suggested some form of unemployment benefits or strengthening the social safety net. Instead, what you have is the bulk of the government’s fiscal stimulus going to firms rather than individuals, with no certainty that the benefits will be passed on from the former to the latter.

(2) On points [c] and [d], while Singapore has largely benefited from a liberal foreign worker policy, there are just as many economists who have pointed out the possible downsides of this. It is thought to have hindered the development of domestic managerial talent, discouraged mechanisation of certain industries and contributed to rising asset prices. You seem to have alluded to a false choice – the choice is not between a liberal FW policy and to have zero FWs, it is inevitably somewhere in the middle, and arguably those who advocate a tighter policy are not entirely unjustified in saying so.

(3) On point [e], few would dispute the merits of a re-training policy, but the problem is that the government seems to treat it as a panacea for unemployment. It is not, and it should be coupled with some sort of income support for the unemployed as in every developed country – the government has made a very modest start by giving a small allowance for those undergoing re-training, but this is still far from sufficient.

(4) On point [f], many would argue that is precisely what has stifled the domestic private sector and entrepreneurship. Worse, it conditions the manner in which the government treats its people – as mere workers, rather than as individuals, and which justifies its elitist conceptions. That might be detrimental for society in the long run.

(5) On point [h], the take of the government is relatively low, because of its lowish taxes, but the upshot is one of the most unequal societies in the developed world. And the argument – that talented people are not inclined to politics because the pay is not sufficiently attractive – is an incomplete one at best: it disregards other factors like a rather apolitical society engendered by the government’s iron-fist approach to dissent or that talented people don’t see serving in politics as an avenue where they can retain their individuality and their right to disagree with government policy.

a question since you mention this ” If you look at the budget records at the Ministry of Finance, you will see that individual income tax is not how the govt gets most of the revenue. Most of the revenue comes from corporate taxes, stat boards, and govt-linked companies, and government-planned investments.”

where does the money originally come from? especially for investment? don’t tell me it is from the air…

“Private sector and income tax do not contribute to the majority of the revenue.”

yes, it sure doesn’t. since GIC and other investment does, and since our CPF contribution that is use to finance some of the investment isn’t tax…so therefore, the gahmen really does not get their revenue from income tax. NICE!

“he truth is that they are desperate to retain people in the government. They find it harder and harder for them to sustain economic growth when global competition is so fierce.”

that is something acceptable…but is it justifiable, with the current selection of MIW. WWW, you make everything sound so easy and nice for them. However, they are not as guiltless as what you are implying…www

But do read widely and globally, like ST forum, The Times, International Herald Tribute, The Economist, etc, to:

- get facts right by examining multiple sources
- get a wider perspective on issues

Don’t just read TOC only.

a. The Singapore economy is heavily dependent on exports on both goods and services, easily around 200% of GDP. You can easily verify this info by searching the web. So if our trade partners do not increase their imports, our economy will continue to slide.

b. Fiscal stimulus do not have much impact because our population is too small to let domestic consumption generate any growth.

c. The purpose of temporary foreign workers is to keep the business cost low for 2 reasons: (i) to keep exports competitive and (ii) to reduce the cost of living, like low prices at food court, transportation, infrastructure construction etc.

d. It does have the side-effect of creating competition in the labour market. The alternative approach is to think we bo-leh “do everything ourselves”. The side-effect is that we lose our competitive edge in exports and also incur higher cost of living. Singapore is just a tiny country that anyone can easily ignore. We need the world more than the world needs us.

e. Nothing is perfect. The most obvious way is to re-train workers so that they can take up jobs that demand more salary. That is the way to be sustainable. Teach a man to fish, so that he earns more. Is is not easy, but if there are no better ideas, that is the way to go.

f. The rest of the world says Singapore is run like a company. It is not because the government is profit-taking. But because the economy is almost entirely driven by the government. The government consolidates national resources to compete in the global market through government linked companies. There is only very few SMEs that suceeds in the global market. Remember that our economy depends almost only on exports. This is what “run like a company” means.

g. If you look at the budget records at the Ministry of Finance, you will see that individual income tax is not how the govt gets most of the revenue. Most of the revenue comes from corporate taxes, stat boards, and govt-linked companies, and government-planned investments. All these the result of direct and indirect government involvement. This is also why people say Singapore is run like a company. Private sector and income tax do not contribute to the majority of the revenue.

h. If you at the financial budget records again, you will see that the total govt expense is still relatively low compare to the total revenue even though there is a big hooha about big pay check for the MPs. Substantial amout of revenue goes in the reserves, and this is why we do not need to borrow from the IMF in this crisis. Although they justify their high pay by saying they deserve it, the truth is that they are desperate to retain people in the government. They find it harder and harder for them to sustain economic growth when global competition is so fierce.

i. Many people are frustrated about live is not getting better and not getting more relaxing, but I think comments have to take into the account on the reliance the government. We all know they are not perfect. Sometime somewhere something will cock-up. To avoid sounding like unreasonable people who did not get the facts right, I think we have to present the complaint very accurately on why things went wrong. Showing what went wrong is always the easy part.

They don’t even have the foresight to stop chasing after bad investment, you think they care about the commoners-wishful thinking.
They will only look out for themselves and worry about their billions of paper losses, and how to cover by sucking more blood for Singapore, INC and State Owned Companies. (pro Companies budget instead pro people budget)
by collecting more GST and taxes to help themselves.
They have no idea of what to do but blame external factors and things beyond their control.

So don’t hope for anything from these blood suckers !!!!!!