The Deficit Spending:

The deficit spending:

by Youssef Chamoun

29-08-2021

Beirut, Lebanon

Deficit spending, as Robert Kiyosaki, the author of the Rich Dad, Poor Dad series, said, can result in unimaginable amounts of money being created out of thin air. If a trillion sounds like a million, and a million sounds like a billion, then what is a trillion? It's a mind-boggling sum that would take us close to two million years to spend if we spent 1000 Lebanese lira pounds every second. That's 34,000 thousand years! It's hard to fathom the amount of money being spent by the government, with 2 trillion being spent in just a minute.

The impact of this deficit spending on us as humans are significant. Hard-working employees may find themselves having to work extra hours and put in more effort just to keep up with the rising costs of living. With 99% of our goods being made outside the country, the need for more than two extra trillion to be printed arises so that we can buy the basic goods and necessities that Lebanese citizens need. However, the government cannot wait for citizens to make the change; they need to take action.

Lebanon has a problem with not producing anything, which means that we need to import our goods. While it may be true that we need to start producing goods locally, this will result in significant price inflation. For example, a product that is currently sold for 5 LL may cost 25 LL if it is made locally. It's not easy to source all our goods locally, and this puts us in a weak position as our money and resources leave our country.

As a result, foreigners will come back with the green pieces of paper and buy our remaining treasuries, real estate, and homes at very cheap prices, leaving us in a compromised and weaker position. We'll be selling our assets to consume in the short term, and the more of the depreciating currency we have in our hands, the poorer we'll become. It's essential to be prepared for the challenging times ahead.