DUMA GQUBULE: Unlike business, government can spend itself out of trouble
When a country spends more money, it boosts confidence and increases national income or GDP
Last week I went into a lion’s den when I participated in a Centre for Development and Enterprise debate on “business’s views on growth”. Discussing the economy with accountants and business people is almost impossible. You explain to them that the economy does not operate like a household or company budget. They get it, but then they don’t get it.
A household has an independence between its income and its spending. Yanis Varoufakis, a former Greek finance minister, wrote in a recent article: “If you and I choose to save money that we could have spent on new shoes, we will keep that money. But this way of saving is not open to the government.” In a country, expenditure creates its own income...
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