Governmant money or private money - which one is better?

In order for money to come into existence, some entity that have an exclusive right to create money must exist first. Without that there will be no money for the people to save and spend.  In short, for money to exist, it must be created. Whatever creates it has some power over those who do not create it.

So who have that exclusive authority or power? Only Government and bank.

Government create money either physically and digitally. Government have printing machine that can create physical money. At the same time Government also can create money digitally (computer) by crediting her vendors/suppliers bank account.

As for bank, it create money through lending activity to creditworthy customer. All the bank had to do is credit its customer account with the required money. That's about it. And bank does not require her customer deposit first in order to make a loan either. Bank can not create money by printing money. 

With government money, the people have the ability to accumulate wealth without the burden i.e.paying back. With bank money, the people have the ability to accumulate wealth but with the burden of paying back. Failed to do so, you could end up being considered insolvent i.e. made bankrupt.

So, which one is better?

Energy Savings To Lift Government Revenues - Brunei Times

"REDUCING government subsidies on electricity by half will mean more jobs and revenues through export opportunities for Brunei.

Hj Jamain Julaihi, deputy permanent secretary (Downstream and Power) of the Energy Department at the Prime Minister's Office (EDPMO) told The Brunei Times on Saturday that they want to prevent any more wastage.

"We want to save because that savings can be translated to many things. One of them is to generate revenue for the government in the form of exports, and can attract investors to the downstream industries which are based on gas," he said, adding that wasting energy would hurt Brunei's economy, and hamper economic growth.

He stressed that the generated revenues will then create job opportunities for "hundreds of Bruneians".

He said that the new electricity tariff which will come into effect on January 1, 2012 is expected to reduce government subsidies on electricity by half which will in turn present new opportunities in the form of export and job creation.

In 2010, the government spent $40 million on electricity subsidy, which prompted the need to introduce a smart subsidy, focusing more on the needy, while penalising higher consumers to avoid further wastage".

With due respect, the notion of cutting or government making cuts in her services to lift government revenue is totally false or fallacy. In fact the opposite shall be happening. Furthermore, exporting precious resources such as our oil and gas in order to accumulate other people's money is detrimental to the nation.

Why all the above?

After August 15, 1971, when United States then President Nixon ended the last remaining gold standard, the world had been operating on FIAT currency system. This system empowered nations to "create" their own sovereign currency without the backing of any precious assets such as gold, oil and gas and etc. NONE what so ever!! In fact the last remaining country in this world to remove her currency from gold was Switzerland on May 1, 2000. Since then all monies created in this world either digitally or physical creation are fiat - money that is created out of thin air! Thus the notion that our country to have revenue first through exportation of her oil and gas in order to spend is totally false. As a sovereign nation, Brunei have the ability to create her own sovereign currency i.e. Brunei Dollar or Brunei Ringgit.

I applaud the government initiative to save the country's precious energy resources but targeting people's wallet is counter productive. My view is that saving energy should not be at the expense of the people. In fact, should the government initiate green technology now such as Wind Farm - as mentioned in recent CSPS studies, the country can save more of her precious resources and at the same time create more jobs now.

Honestly, our country should be saving her resources and categorizing them as strategic assets. This should not be limited to oil and gas. It should be extended to all. Thus, I would advocate that our government to seriously think of doing massive spending. Those spending should be directed at improving the country's infrastructure such adopting renewable energy technologies, building LRT, building more schools, PTE's and universities, mosques, desalination plant, and etc. Furthermore, the government should be improving her population welfare rather than trimming them. All these can be achieve by the country because Brunei is a monetarily sovereign country.

Economist Can Be Wrong

Not only did the global financial crisis catch the vast majority of economists completely unawares, they instead expected tranquil and even buoyant times just as the biggest economic crisis since the Great Depression began. My favourite such observation is from the OECD‘s Economic Outlook for June 2007—in which the Chief Economist suggested that, “the current economic situation is in many ways better than what we have experienced in years . . . Our central forecast remains indeed quite benign.” But there are countless other such utterly wrong prognostications about the economy, from the profession that is supposed to be the font of wisdom on the economy.

Those “in the know” understand that this is not an isolated failing. The Neoclassical model that dominates economics today is riven with logical and empirical fallacies. If economics were a real science, it would have long ago been overthrown and replaced by something more realistic.

Yet at least 90% of academic economists believe in this model, as do almost all economists working in government and private industry. Left to their own devices, they will continue thinking that this model does describe the economy as the real economy falls deeper and deeper into a crisis, even though their model says that this can’t even happen.

Since economics has failed to clean out its own intellectual stable, it will be the public that finally forces reform upon it – as once-supporters like Anatole Kaletsky of The Times calls for “a revolution in economic thought” and George Soros funds an Institute for New Economic Thinking. With luck, in a decade or two, a more realistic approach to economics might emerge. But in the meantime, here’s a simple guide for the public: Anything the vast majority of economists believe is likely to be wrong.