Between 2020 and 2023, Finland allocated an additional 10B a year (41B in total) to handle the Covid pandemic. However, in a report released yesterday by the National Audit Office, less than half of this was spent on Covid-related policies, and the majority was used to support municipal finances, state administration and a smaller portion, to defence spending, which is probably more warranted given that Russia invaded Ukraine at the start of 2022. While 41 billion might not sound like that much, for a country of 5 million people, it is a lot and what most of that additional unnecessary spending was on meant that there are long-term obligations, not only to service the debt, but in the way it was spent.
What are the chances Finland is the only country?
It was a cash grab.
Each country might have spent the debt on different things, with some better than others, but I suspect that most countries over allocated to the Covid response, and the majority of what was spent was not on the response itself, but was used to support the padding of pockets at the expense and future cost of the taxpayers. And in Finland, in response to this significant mismanagement of "public" finances, the current government has been implementing austerity measures and cutting back in areas that affect people's daily lives, like healthcare, and it has had a massive effect on cost of living, as well as the unemployment rate, which is over 10% currently.
When it comes to fiscal policy, bad fiscal policy has far reaching implications and consequences, and poor government spending ultimately hurts the people that the government should be helping. And governments themselves rarely make good decisions for their people, and instead look to play the political games locally and at the global level.
For an example of this, based on a discussion with @seattlea yesterday about European military reliance on the US and related matters, he mentioned that it is obviously cheaper to buy the equipment from the US, because ramping up production in Europe would take a lot of investment. Which is totally true. The problem I have with this though is that it leaves Europe continually a renter, reliant on the good graces of the US, which is no longer that good, graceful, and increasingly unreliable. And while it might be more expensive initially to invest, that investment is made locally into the future of the region in an area that (unfortunately) isn't going away anytime soon.
It boosts the local economy, whilst improving security through supply autonomy.
But it isn't just military spending. Going back to the Covid pandemic, as I had said at the time, the handouts and the spending shouldn't have been done in the way they were, and instead Finland should have been investing into its future. Now with the numbers released yesterday, that could have been over 20B investment made directly into developing local business, but it instead went the other way, putting more strain on locals.
A lot of the current political manoeuvring with the Us is in an attempt to support the status quo of the US as a superpower and the largest single economy. Instead of this, all the other countries on earth should be looking to improve their own business capabilities, spending on local investment in order to develop the rest of the world market so as not to have reliance on a single market, that is increasingly erratic and abusive of trading partners. If they did this, the stranglehold the US has the single largest economy would loosen, but it would also weaken the US ability to generate its income, because they would have to compete at the global level on a more even playing field, rather than where they are subsidised by political motivations to make them happy.
It is in the economic interest of around 7.5 billion people to weaken the US as a market buyer, because it returns more wealth locally. And while currently the US has most of the world's largest companies and the majority of the billionaires, once the markets around the world strengthen, it starts to dilute the concentration and distribution starts to spread. It takes time, possible a generation or two, but on the current course, the concentration is going to cause a global economic and social collapse of everything. And the more power gets concentrated, just like in a communist country with centralised resource allocation chosen by leadership, the less provision is given to the outlying regions.
What people might want to consider is that there is no such thing as a communist country in practice. Perhaps ideologically it exists, but at a practical level, the government is a capitalistic monopoly with complete control. And what the US has been doing over the last seventy years is using its debt mechanics to position itself at the centre of the global economy, as the capitalistic monopoly. And it has been so successful that the population they control at the political level, is scrambling to push more wealth and power their way, like department leaders of the controlling government. This is not in the best interest of the people though, just like it is not in the best interest of the majority to have a communist system with centralised authoritarian control.
But for most people, this seems to hard to understand, which is because most people don't actually think about how all these flows of wealth affect their daily lives, and how the numbers are so large, people just can't imagine what it means. 41 billion is not a small number, nor is the 10B purchase of 64 F-35s fighter planes from the US. Yet, at the same time these kinds of numbers are being spent, they are making savings of a few hundred million here and there in areas that affect people's daily lives negatively.
The fiduciary responsibility of a government is to its people, and while this doesn't mean handouts, it does mean that the way the government spends should be directed at improving the quality of life of residents. If that requires (in the current economy) revenue, this requires investing into revenue generation in the country, not continual renter spending outside of the country. The more reliant a government becomes on external supply, and especially when that supply is increasingly volatile, the worse it gets for the people of the country. This isn't to say that all countries should close themselves off, rather that countries should look to build their competitive advantage and alliances with surrounding countries in ways that both provide some level of security, but most of all improve people's lives.
There is no point of having security, if life is shit.
And life is increasingly getting shittier for the majority of the world's residence, even as the financial earnings of the globalised economy improves. The system is failing, because it has placed earnings above people in the hierarchy, which means as long as numbers go up, it can come at the expense of people's wellbeing. Human wellbeing should be at the very pinnacle of all government activities, and should be the true north for every expenditure. All government policies should be directed at human wellbeing first. Because if human wellbeing gets too low, there will be nothing left of a country to defend.
But hey, what do I know.
Taraz
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We had quite a number of high profile legal cases here where people got caught misappropriating Covid funds. I wonder how many people went to jail after all was said and done. It's probably more than we realize. Here at the schools we had a some decent money come in that allowed us to do projects that we probably wouldn't have been able to do otherwise. The money still had to come from somewhere, so who knows what else suffered because of it.
I would assume that over 50% of all globally was misused in some way. It really was a money grab at the expense of taxpayers. It is not that all that was done was bad, but if you imagine at the scale of the US, it likely was pretty significant.
Yeah, you are probably right!
I think China is rising to challenge America's place as a capitalist monopoly. China's economy has grown significantly over the years and is catching up with that of the US. The only problem is that only few countries of the world are pursuing this path.
BRICS came up with a similar idea some years ago, which would result in dethroning the US dollar on the international trading scene and boost local economies. But I suspect the Ukrainian war is not giving enough space for Russia to run with that agenda.
One sure way this could work, is for the Eastern or Oriental nations of the world to unite. China, Japan, Korea, Russia, etc and form a union of their own and seek for complete economic and otherwise Independence from the US. Because no Western or Western-allied country would follow this path you have suggested, they are still being suckled by the USA.
Oriental nations have to give a lot to achieve anything like this, because the US is working continuously to undermine the growing influence of Eastern nations so they will remain at the top.
China - a capitalist monopoly. Good for the average person in China?
What is sad is that if the rest of the world stopped putting politics above people, a lot of good could happen in a short timeframe. If wellbeing was increasing, who would resist?
Idk why governments are so obssesed with to do the opposite to its people wellbeing. Why they always forget they work for us and not for US ?
Everywhere there is money for public spents, there is too, a man or men ready to steal it, and them ask us pay the fucking hole in the country wallet
Because they don't care and we keep doing what they say. If you happily do what your abuser tells you to do, are you a victim?
To be honest and neutral the write up i believe assumes that military or external defense spending does not translate into quality of life, but this overlooks the fact that national security is a prerequisite for every other type of development. If a country becomes vulnerable because it under-invested in defense , all the schools and hospitals in the world won’t matter. As someone who is in a country that faces high level of insecurity, i dare say security isn’t a luxury it's a necessity.
For developed nations, there is some difference here I think. Yes, security is necessary, but there are ways to have that collectively, without relying on a single country. That is in itself a massive risk. The EU should have enough defence collectively to defend itself and others, but it does not. Time to change that. It is far cheaper to do it collectively in that way as a defence mechanism, and use the extra to build wellbeing, than to do what is currently happening and edging further toward relying on a dictatorship.
Just annoying to see how government spending doesn't match what people actually need during a crisis like COVID-19. That €41 billion could have changed local economies and made healthcare better
Governments don't want improvement of the masses.
But unfortunately, it is true that most countries are completely dependent on the United States, but in the current world, every country should invest in its own local sectors. Investment is needed to increase their own capacity, but instead of increasing their own capacity, they are becoming completely dependent on one country, due to which countries are becoming fragile. As a result, the country is getting a single authority, starting from oppression, because they do not have competition. Although I am not completely against the United States, but every country should increase its own capacity.
Me either. At least not the people.
Right
The positive side of being poor- thieves are maybe less likely to risk stealing from really poor.
I also remember a joke/statement that went something like this...
Thieves took my wallet. Checked it then placed a 100 eur inside and returned the wallet to me.
One of the reasons why I have not went to a watch a basketball game in years is because I fear that someone can steal my wallet/ phone while I will watch a game. This fear is weird because that never happened to me in the past...
Not in terms of a country. When people are worth less than the land, a country is easily attacked. If people are the wealth and value of a country, attacking it means destroying what is valuable.
That is a weird fear, especially since you can just do things to ensure that your wallet and phone are safe :D
Sometimes it needs no saying that Citizens don’t directly experience the benefit of billion-dollar military contracts, especially in times of peace but they do experience failing schools and collapsing infrastructure. If a government cannot translate its spending into improved quality of life, then its budgeting is not just misguided but also irresponsible. This is perculiar to so many countries
Seems all governments are irresponsible.
A country needs to be dependent on itself, continually hoping that the US will come to their rescue by selling military weapons to them only makes them totally dependent on the US.
It's high time the world learns that most times aids rendered to any country is an exchange for either something monetary, natural resources or a form acceptance of control from that country, and most times this ends up depressing the economy of such country.
Maybe if we begin to recognise that we as a smaller countries can have some form of self reliance, we will invest more in our economies rather than always shopping from outside.
Where are the troops in Ukraine from the US? They are happy to sell weapons, but is that really enough? Same for Europe. Ending the war isn't going to depend solely on what weapons Ukraine has, if they do not have enough people to use them, let alone rebuild the country after. But that is what the US is waiting for, right?
Another reason to build local capacity to manufacture weapons in Europe is because even if we USA are a reliable partner and just using this rhetoric to negotiate a more fair deal for USA in terms of defense spending, still good to have extra capacity in case of a war with China for example... I think China might be able to outproduce the USA and it would be good to have extra production capacity in Europe...