1. Mr Micawber’s famous, and oft-quoted, recipe for happiness:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” Charles Dickens, David Copperfield
For most people the word surplus means excess. In their finances it means that when the week is over and their new pay check comes in they still have money in the bank from the last one!
So when the government says they are in surplus most people assume that we as a Nation have some money in the kitty left over to spend on fun things!
But with a National debt raging out of control there is a strange kind of dichotomy going on. How can we have a surplus is with every day we have to cough up $ 13 million in interest alone on the debt we have?
So what is that Surplus the government is talking about and how come, with the debt rising everyday, the government is talking about a tax cut in 2017 when they hope to be re-elected?
This is why I have decided to make Surplus as understood by Governments around the globe the Government word of the day!
First of all it is important to add a second word to the word surplus. That word is Budget. If you combine those two words all of a sudden that government number of $ 414 million will start to make sense. Now, to most people the word budget conjures up little piles of money or lists of bills (digital these days) and trying to make ends meet while all the bills get paid. Most people don’t bother with a surplus these days but the Dickens quote at the top of this post is still as valid today as it was back then and if you have a bit left over when your next pay check comes most people consider that a plus!
To a government it is a list of things they want to do and some have to do’s and more often then not that means extending loans from other sources such as privately owned banks. Changing flags, buying Panda’s, changing currencies are the kinds of things governments like to do and funding healthcare, making sure people stay connected to the post services in unprofitable areas, funding education, making sure the unemployed don’t starve to death are the sort of things the government must do if they want to keep some semblance of civil society.
So with these two words combined this is what the government is really talking about when they tell us we are in surplus:
- Budget Surplus= Is the situation in which a government manages to stay within their budget.
In other words the government makes a budget every year and if they manage to stay within that budget they call it a surplus. If they decide that in the year to come to will spend $ 200 billion and they spend only $ 195.586 billion they have a surplus of $ 414 million.
The Budget Surplus has nothing to do with GDP, real income or paying off the debt we are incurring at a ridiculous rate and which we will never be able to pay off!
In other words, what for you and me is a bit of a plus, to the government this means that they have been efficient and saved having to spend the entire budget they had earmarked. How did they gain that surplus? Well, they stopped couples in distress from the opportunity to have therapy. They cut the postal service back to three days a week in rural areas. They make is so hard for sick and unemployed people to get financial help that many of them give up and live and die at the margins. That means more homeless, people with cancer having to prove at least once a month they still have cancer, students having to borrow huge amounts of money so they can get an education. They stopped running prisons in favour of private companies like Serco. They sold our assets to private companies to name a few of the things they did to stay within their budget.
What they didn’t do was curb their things on the “want to do list”. Which is what you or I have to do to keep having access to healthcare, education and the ability to pay our bills with the ever rising prices of the now privatised utilities we once owned and which helped pay for all those necessities we now have to pay for ourselves out of our ever diminishing incomes.