Wednesday, April 25, 2012

Fiscal Deficit and The Diesel Price

Fiscal deficit and the diesel price. What is the connection? Simple - Both burn a hole in our pocket. What is the difference, one burns the hole visibly, and the other stealthy! The funny thing is, the stealth hole is much bigger and deeper, but most of us don't care about it! Why? Are we idiots? Don't we know what is right and what is wrong? No, none of that.

The diesel hole is direct, visible, pinches immediately and is understood by 99% of us. The fiscal deficit hole is much bigger, deeper, indirect, comes with a lag and is  understood by 1% of us. I love percentages, they change the game completely!

Our politicians, all seasoned politicians, have access to best of the economists, have been in public life for many decades, have interacted with best brains, clearly understand both the economics of diesel and fiscal deficit. But more than the economics they understand the percentages, the percentage of electorate who know or don't know the difference!

And that is where the character matters, character of these politicians, which determines how they use the information that they have.  They can be true leaders, go to the masses, teach them why letting diesel prices float and allowing it to burn small hole in our pocket, for now, will help us ward off fire to our trouser! or they can be, guess what, politicians(!) and tell people that they are the ones keeping the lid on the diesel prices, who cares about fiscal deficit!




2 comments:

  1. Well said sir....nobody on news channels also talks about Fiscal Deficit which really is eating our pockets....I think if politicians are playing games of percentage...Media should come forward and educate people...I am not sure if any channel has any discussion about the fiscal issue.. Thanks for making us aware :-)

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  2. Glad you liked it! I picked diesel to make it easy to put my point across. The point i am making is however true for any non-productive expenditure that the government does and associated fiscal irresponsibility.

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