We need to be clear about the nature of the society that we want - in order to use government deficit spending to rebuild a new society from the rubble of the old broken one what we have destroyed.
At the risk of repeating myself, here we go.
How can we rebuild our society?
1. Education, education, education. Invest in our people. We have to train our people well - train them to think for themselves. This may be risky for politicians but if politicians are to be truly serving the people, they must allow the people to take care of themselves. (Are our politicians deliberately ruining our education system so that they can control the people?) When the people are well trained, they do not need government subsidy to survive. Pay teachers well. Draw in versatile people to teach - teachers who can trigger the minds of young people to greater heights. We can improve our education system by building on top what we have. Language is a secondary factor. Creativity and innovation and the ability to think can be taught in any lanuage.
2. Private investment, private investment, private investment. If the government can try to bring assurance to foreign investors about fairness and justice for them, cannot the government do the same for local private investors? The precondition for private investment to be forthcoming is confidence in the environment that people are investing in - that the investors can enjoy the fruits of their own labour, rather than having their efforts sabotaged. The need to build and solidify confidence need to emphasised again and again. Fair policy. Security. Law and order. Let the people decide where and how much to invest - do not micromanage them. They assume their own risks.
3. Government deficit spending. For a developing economy like Malaysia, there is still a need to design and build an efficient and productive operating environment. Once the preconditions for private investment is there, a whole comprehensive supply chain needs to be build. We have done enough for ports and sea ports and roads in major cities. We now need to stimulate growth in the outlying areas where the potential for agriculture is great. We need to link these outliers to the outside world. We need to develop a system of efficient service, especially transport and communications, from the ground up. We really need the people on the ground to work - rather than taking tea breaks and annual leave and doing personal errands. There is a need for the government to spend in excess of non-oil revenue to increase the the human resource and capacity and increase the annual economic flow to a critical level whereby the basic physical infrastructure can will be optimally used.
4. Produce, produce, produce. We must get our people to produce goods and services, instead of encouraging people to consume. People empower themselves when they are in a position to contribute to society by doing something that is beneficial to society. People must continue to work hard, produce, save and invest. It is an utterly misguided policy to encourage people to consume until they are heavily indebted.
Produce, produce, produce. Save, save, save. Invest, invest, invest.
My only appeal to policymakers is to go and get some proper economic expertise - rather than relying on econ 101 students to save our society.
The reason why we need to consume less and save is so that we always have the capacity to undergo structural changes which is very necessary for a developing and therefore the need for a rapidly growing society.
We have benefited from tin miners, and they have died. We have benefited from coconut growers, and they have died. We have benefited from coastal fishing, and they have died. We have benefited from mega builders, and they have died. We have benefited from the stock market, and it has died. We have benefited from property developers, and they have died. We could have benefited from the iron and steel industry, and it has died. We could not benefited from the national car project, and it has died.
So, we need more and more savings to invest in new sectors, new sub-sectors, so that our society can keep on re-engineering itself. We cannot afford to keep supporting industries in which we do not comparative advantage.
We have not really developed our arts and entertainment sector. We have not really allowed our talents to be themselves. Big Brother too strong.
The government should spend and go further into deficit - which can only be justified by increasing the potential for future growth of the economy. For that to happen, the country must unleash its people to greatness.