The Funding Deficit

I am quite addicted to the news apps on my phone. While we all know, there is rarely a good news on news channels these days, one thing I constantly see is how much our country and many departments are short of funding these days. Taxes are almost always going up. Recently, the Universities are facing funding issues. The councils are increasing council tax due to lack of money. The water department is pushing the bills up. NHS has its own struggles. You name it. It's rare that you hear that any department is in surplus or not struggling financially. You can argue the media will only tell you about those with financial struggles, I still feel that more and more departments are financially tight at least. Have you thought what is happening? There are such good intelligent minds sitting there in banks and governments, why we always hear about lack of funds in various areas?

One of basic things with money matters is that in addition to the "inflow" of money, which many of the policies concentrate on, if the "outflow" is more, then any person or department or country won't be financially better off. So if you earn £4000 per month but then end up spending on house repairs, car repairs, fees, bills etc and spend £4100, you will be poorer. In contrast, someone who earns £3000 per months, and doesn't have any unplanned expenses, no car maintenance and didn't have to spend on home maintenance may end up saving, lets say £500 per month . So, which one would you like to be? Earning £4000 and have an unwanted unattractive expense of £4100 or £3000 with expense of £2500? Have a think and we will come to this.

Interest based money creation will never be enough. Whether personal or state. You may be able to control how much money you can make with interest but you wont be able to control the expense. You will have un-welcomed money draining expenses. No matter how much you try to save, it will never be enough. Or at least you will feel like that. It will go faster than it came in.

As of end of March 2023, UK's national debt stood at £2.537 trillion which equates to 100.5% of country's GDP. This means that the debt is roughly equal to the total value of all goods and services produced in the UK over a year. In 1980s and 90s, it was below 40% of GDP. On the face of it, we have more money, but we are more in debt and that unpleasant drain, the unplanned expense is more too.

It is not my thought. It is not my bias. It is not my opinion. It is the rule set by the Law Maker (God), One who gave you and me a chance to live and will take our lives back after a certain time. We believing it or not, wont change the law. It will happen. You may enjoy the short lived benefit but eventually the divine law will kick in. Interest based money will never be enough.

While I don't expect world economy and banking system to ditch the interest based system, I can easy understand and forecast what is happening in World economies and will happen to the finances of the world in future.

Some of you may be thinking what about the countries who do not get involved in interest. Are they better off? I will post another blog for that question.

Signing Off