EKIP– Expert Club for Economics and Politics A Different Opinion
On Friday, parliament will discuss the government's budget update proposal at third reading. This comes after the president vetoed the legislative changes a week ago because, according to him, the proposed increase in state spending is opaque. But the main question we need to ask ourselves is - do we really want the state to spend more money?
For the second month now, MPs, ministers and all sorts of other statesmen have been talking about how without the update, the money for this or that would not be enough - hospitals would go bankrupt, the disabled would receive less assistance, private business would fall into a liquidity crisis, and so on. This is populist rhetoric that aims to intimidate us and make us feel guilty, and then give in to the demands of those in power. In fact, the funds are never enough and it cannot be otherwise, because resources are limited - and precisely because of this we must ask ourselves whether it is appropriate for the state to have more of them.
Perhaps someone will object that the Bulgarian state does not spend that much. And such a reaction should not surprise us, after all, politicians always try to create the impression that the budget has been cut and, if they could spend just a little more, our lives would improve immensely.
Колко харчи българската държава? Планираните разходи за 2013 г. са 31.7 млрд. лв., което е равно на 39.6% от прогнозирания за годината БВП. С други думи - държавата планира да изхарчи почти 40% от произведеното в икономиката. При едни още 60% щяхме да се доближим напълно до делът, който харчат социалистическите режими.
И все пак, някой може да опонира, че дори и така да е, разходите са по-малко спрямо други години. Само че "постната пица" всъщност не е чак толкова постна. Средният годишен ръст на държавните разноски за периода 2008 - 2013 е 6.3%. Още по-любопитно е сравнението между разходите, които държавата планира да направи през текущата година (петата на България в рецесия) и това, което държавата е изхарчила през 2008 г. (последната година на сериозен икономически подем) - има увеличение от цели 25% (или 6.4 млрд. лв).
Интересно сравнение е и това, че очакванията за 2013 г. са брутният вътрешен продукт на България да е с 10.6 млрд. лв. по-голям от този, който икономиката е произвела през 2008 г. За същия референтен период държавните разходи са нарастнали с 6.4 млрд. лв. - т.е. ако се реализират разчетите за 2013 г., държавата ще е "изяла" 60% от ръста на БВП за последните пет години.
Another very interesting connection is shown by the data on the relative growth of government spending and that of GDP. Bulgaria's economy has grown in four of the five years of crisis since 2009. It achieved the highest growth in 2011 - 1.8% real growth. In the same year, government spending increased at its lowest rate for the period (not counting 2009 itself, when spending also grew by 0.9%, but this was the first year of the crisis and it is understandable that economic activity was much lower then).
It is obvious that the state has not "tightened its belt" in recent years - on the contrary, we have tightened ours so that it can spend more. Another thing that is visible is that despite this, the economy (the market) has managed to record at least minimal growth, and the state has tried to capture a significant part of it.
So would it be a problem if budget revenues in 2013 really are less than expected? No, in that case Oresharski's government simply needs to spend less money. Contrary to media populism, this will not lead to social collapse and economic collapse, but will move us further away from socialism and closer to the free market, where decisions are made by entrepreneurs, guided by the desires of consumers (and accordingly the role of the state and its individual agents is insignificant).
The increase in budget spending is not just providing subsidies to farmers, paying off the Bulgarian black market business and other corrupt schemes. It helps the state grow, expand its reach over economic processes and ultimately decide who is the "winner" and who is the "loser". This is also the ultimate goal of those in power - more power, so do not succumb to demagogy.
