Showing posts with label infrastructure spending. Show all posts
Showing posts with label infrastructure spending. Show all posts

Sunday, September 07, 2025

When Free Lunch Politics Meets Fiscal Reality: Lessons from the DPWH Flood Control Scandal

 

Democratic socialism—thereby fusing populist authorization with bureaucratic command—inverts civil society’s logic: spontaneous coordination yields to electoral control, property, and precedent to administrative discretion. The quest for legibility breeds discretion, opacity, colonizing associations, and politicizing provision. The polity grows more ceremonially majoritarian as its structure turns illiberal. Human relations become increasingly politicized. The space for autonomous and dissenting freedom steadily recedes—Vibhu Vikramaditya 

In this issue: 

When Free Lunch Politics Meets Fiscal Reality: Lessons from the DPWH Flood Control Scandal

I. Selective Framing: The "Smallest Deficit" Headline

II. Bigger Picture: Weak Revenues, Sluggish Spending, Cumulative Deficit Near Record Highs

III. Quietly Moving the Goalposts, Budget Gaps: Enacted vs. Revised

IV. Interventionist Mindset: The Root of the Fiscal Imbalance

V. The Economics of "Free Lunch" Politics: The Law of Scarcity Meets the Welfare State

VI. Debt Dynamics and the Savings–Investment Gap

VII Corruption as Symptom, Not Cause

VIII. Public Spending at Historic Highs and the DPWH Flood Control Scandal

IX. The DPWH Scandal: A Systemic Threat

X. A Policy Dilemma: The Impossible Choice 

When Free Lunch Politics Meets Fiscal Reality: Lessons from the DPWH Flood Control Scandal 

What the DPWH scandal reveals about the fragility of a spending‑driven political economic order

I. Selective Framing: The "Smallest Deficit" Headline 

Inquirer.net, August 29, 2025: A modest increase in government spending narrowed the Philippines’ budget deficit in July to its smallest level in nearly five years, keeping the shortfall within the Marcos administration’s target. The state continued to spend more than it collected after recording a fiscal deficit of P18.9 billion, albeit smaller by 34.42 percent compared with a year ago, latest data from the Bureau of the Treasury showed.


Figure 1

The July budget deficit headline—“smallest in nearly five years”—is a textbook case of selective framing. 

While technically accurate, it obscures deeper fiscal concerns by exploiting the optics of quarterly VAT reporting, which front-loads revenue at the start of each quarter. Since 2023, firms have filed VAT returns quarterly instead of monthly, so revenues at the start of each quarter appear inflated, producing artificial “surpluses” or unusually slim deficits. (as discussed last year, see reference) [Figure 1, upper image] 

This makes July look exceptional, but it is little more than a timing quirk—not a sign of genuine fiscal improvement.

II. Bigger Picture: Weak Revenues, Sluggish Spending, Cumulative Deficit Near Record Highs 

In reality, the cumulative January–July shortfall has ballooned to Php 784.4 billion, the second-largest on record. [Figure 1, lower chart] 

Revenues grew by only 3.26% while expenditures posted a meager 1.02% increase. The Bureau of the Treasury itself attributed the spending slowdown to the "timing of big-ticket disbursements of the Department of Public Works and Highways, Department of Social Welfare and Development, and Department of National Defense for their respective banner programs." 

Year-to-July, expenditures are up 8.2%, slower than 13.2% in 2024, but the bigger story lies in revenue weakness: collections grew just 4.8% this year compared with 14.75% in 2024. The 24.9% contraction in non-tax intake and the sharp deceleration in Bureau of Customs growth (1.5% vs. 5.8% in 2024) dragged overall revenues down. 

III. Quietly Moving the Goalposts, Budget Gaps: Enacted vs. Revised 

July’s Php 491.2 billion in expenditures also fell sharply below the Php 561 billion monthly average needed to meet the Php 6.326 trillion enacted budget. 


Figure 2

Compounding this, the Bureau of the Treasury reported that 2025 fiscal targets had been revised downward (by the DBCC) for both revenue and spending, now pegged at Php 6.08 trillion. [Figure 2, upper table] 

Authorities attributed the adjustment to "heightened global uncertainties," but the subtext is clear: the government is quietly recalibrating expectations to preserve its 5.5% deficit ceiling, even as structural weaknesses deepen. The headline may offer comfort, but the underlying trajectory points to fragility, not fiscal strength. 

The enacted budget sets the ceiling—what government aims to spend—while the revised budget marks the floor, revealing what it can realistically afford as conditions shift. 

Yet the jury is still out on whether the current administration will break its six-year trend of exceeding the enacted budget—or whether this implicit admission of slower growth will instead spur even more spending in the second half of the year. 

IV. Interventionist Mindset: The Root of the Fiscal Imbalance 

Of course, the fiscal imbalance is merely a symptom. 

As previously discussed, it is driven by behavioral factors—such as the heuristics of recency bias and overconfidence—combined with an overreliance on a technocratic bureaucracy fixated on flawed econometrics as the fountainhead of interventions. (see reference on our previous post dealing with the rising risks of a Fiscal Shock) 

Most importantly, it is fueled by a populace increasingly dependent on social democracy’s "free lunch" politics, anchored in a deepening interventionist mindset. 

As Mises Institute’s Joshua Mawhorter lucidly describes, "by living under a modern, highly interventionist modern nation-state, the default paradigm of political elites and the general public is that, whenever a problem arises, the government must do something, that not doing something would be irresponsible and disastrous, that it can only help, and that the worst possible option would be doing nothing. This might be called the interventionist mindset or interventionist paradigm." (bold added)

V. The Economics of "Free Lunch" Politics: The Law of Scarcity Meets the Welfare State 

This mindset lays the policy framework for trickle-down Keynesian spending programs financed by the BSP’s easy money. 

Public spending on an ever-widening scope of social services—including the proposed "universal healthcare" for all Filipinos—illustrates this. [Figure 2, lower left image] 

In simple terms, while such programs may appear ideal, the law of scarcity dictates that there must be sufficient savings to sustain a welfare state. 

If the rate of redistribution exceeds the growth of savings, funding must come from elsewhere—either by borrowing from future taxpayers or through the inflation tax, via financial repression and fiscal dominance enabled and facilitated by central bank accommodation. 

Yet a persistent reliance on borrowing or inflation is not sustainable. Both are subject to ‘reversion to the mean’ and will eventually face a reckoning through crisis.

VI. Debt Dynamics and the Savings–Investment Gap 

The thing is, while some authorities acknowledge the burden of public debt—"every Filipino now owes P142,000"—most attribute it to "corruption," a convenient strawman. [Figure 2, lower right picture]


Figure 3

Alongside rising expenditures, public debt surged to a record Php 17.56 trillion last July, sustaining its upward trajectory and accelerating in both scale and velocity! MoM changes depict this uptrend. [Figure 3, topmost and center graphs] 

All told, the Philippines suffers from a record savings–investment gap, which hit a new high in Q2 2025. [Figure 3, lowest chart] 

But "savings" in national accounts is a residual GDP-derived figure that is deeply flawed; it even includes government "savings" such as retained surpluses and depreciation, when in reality, the fiscal deficit reflects dissaving (as discussed during CMEPA last July; see reference). 

With public debt up Php 296.2 billion month-on-month, Php 1.873 trillion year-on-year, and Php 1.512 trillion year-to-date, the government is suggesting a forthcoming decline in public debt by the end of 2025. 

Technically, while a ‘slowdown’ may occur, this is a red herring—it omits the fact that soaring deficit spending inevitably translates into higher debt, higher inflation, or both.

VII Corruption as Symptom, Not Cause 

Social democrats fail to heed the lessons of EDSA I and EDSA II: corruption is a legacy of big government. 

What is often forgotten is that corruption is not the disease but a symptom of vote-buying politics—of a system built on free-lunch populism, where political spending buys loyalty, entrenches dependence, transfers wealth, consumes savings, and simultaneously erodes institutions through ever-deepening interventions. 

Per the great Frédéric Bastiat, 

"When plunder has become a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." (Bastiat, 1848) 

Still, social democrats cling to the illusion that electing an "angel" leader can deliver an ideal command-and-control economy. They overlook that forced redistribution—or legalized plunder—breeds societal tensions and unintended consequences, triggering a vicious cycle of interventions and power concentration —exactly what Tocqueville warned against when he said absolute power corrupts absolutely. 

Again, Bastiat reminds us: 

"legal plunder may be exercised in an infinite multitude of ways. Hence come an infinite multitude of plans for organization; tariffs, protection, perquisites, gratuities, encouragements, progressive taxation, free public education, right to work, right to profit, right to wages, right to assistance, right to instruments of labor, gratuity of credit, etc., etc. And it is all these plans, taken as a whole, with what they have in common, legal plunder, that takes the name of socialism." (Bastiat, 1850) 

The bigger the government, the greater the corruption. 

VIII. Public Spending at Historic Highs and the DPWH Flood Control Scandal


Figure 4

Today, public spending as a share of GDP is at its highest level (!!) compared to pre-EDSA I and pre-EDSA II—and that’s counting only direct public expenditures, excluding construction and private sector participation in government projects such as PPPs and other ancillary ventures. [Figure 4, upper diagram] 

From this perspective, the ongoing flood control scandal is merely the tip of the iceberg, with contractors and select authorities in the “hot chair” serving as convenient fall guys for a much larger, systemic issue. 

IX. The DPWH Scandal: A Systemic Threat 

These X.com headlines provide a stark clue as to how public spending and GDP might be affected: [Figure 4, lower images]

The unfolding DPWH scandal threatens more than reputational damage—it risks triggering a contractionary spiral that could expose the fragility of the Philippine top-down heavy economic development model. 

With Php 1.033 trillion allotted to DPWH alone (16.3% of the 2025 budget)—which was lowered to Php 900 billion (14.2% of total budget)—and Php 1.507 trillion for infrastructure overall (23.8% and estimated 5.2% of the GDP), any slowdown in disbursements could reverberate across sectors. 

Many large firms are structurally tied to public projects, and the economy’s current momentum leans heavily on credit-fueled activity rather than organic productivity. 

Curtailing infrastructure outlays, even temporarily, risks puncturing GDP optics and exposing the private sector’s underlying weakness. 

Or if infrastructure spending is curtailed or delayed, growth slows and tax revenues fall—VAT, corporate, and income tax collections all weaken when economic activity contracts. 

This means the deficit doesn’t necessarily shrink despite spending restraint; the “fiscal hole” may, in fact, widen—imperiling fiscal stability and setting the stage for a potential fiscal shock. 

The irony is stark: efforts to contain corruption by tightening spending could deepen the very gap they aim to close.

To be clear, this is not a defense of corruption but rather a reminder of how dependent GDP growth has become on public spending, leaving it vulnerable to the vagaries of political oscillation—including the ongoing flood control corruption scandal.

X. A Policy Dilemma: The Impossible Choice


Figure 5

With debt servicing already absorbing a growing share of the budget (7-month interest payment accounted for 14.8% share of expenditure), and revenue buoyancy dependent on infra-led growth, the administration faces a dilemma—either sustain spending through a compromised political pipeline or risk a broader economic and fiscal unraveling. 

The lesson is, the real danger lies not in the scandal itself, but in the systemic exposure it threatens to reveal: 

  • A growth model overly reliant on state-led spending
  • A fiscal framework vulnerable to both political shocks and bureaucratic paralysis
  • A debt trajectory that leaves little room for error when revenues falter 

In short, the interventionist mindset at the core of social democracy’s "free lunch" political economy entrenches structural fragility, as shown by the mounting fiscal imbalance. 

The DPWH scandal crystallizes a deeper tension—forcing the political economy to weigh popular demands for ‘good governance’ against the imperatives of a development model structurally reliant on public spending. 

As Roman historian Tacitus warned (The Annals of Imperial Rome): 

"The more corrupt the state, the more numerous the laws."

____

References 

Vibhu Vikramaditya How Democratic Socialism Inverts the Logic of Civil Society Mises.org, September 3, 2025 

Prudent Investor Newsletter, Philippine Government’s July Deficit "Narrowed" from Changes in VAT Reporting Schedule, Raised USD 2.5 Billion Plus $500 Million Climate Financing September 1, 2024 Substack 

Prudent Investor Newsletter, June 2025 Deficit: A Countdown to Fiscal Shock, August 3, 2025 Substack 

Joshua Mawhorter Interventionist Non-Interventionism Mises.org, September 5, 2025 

Prudent Investor Newsletter, The CMEPA Delusion: How Fallacious Arguments Conceal the Risk of Systemic Blowback, July 27, 2025 Substack 

Frédéric Bastiat Economic sophisms, 2nd series (1848), ch. 1 Physiology of plunder ("Sophismes économiques", 2ème série (1848), chap. 1 "Physiologie de la spoliation"). Econolib 

Frédéric Bastiat, The Law (1850), Ludwig von Mises Institute 2007 Mises.org

 

Sunday, November 12, 2023

The “Surprise‟ Philippine 5.9% Q3 GDP Powered by Deficit-Spending and Bumped by a Statistical Facade

  

Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it—Richard Lamm 

 

In this issue 

 

The “Surprise‟ Philippine 5.9% Q3 GDP Powered by Deficit-Spending and Bumped by a Statistical Facade   

I. 5.9% Q3 GDP: A Statistical Façade   

II. An Across-the-Board Slump in the Expenditure Side GDP; Lowest Household Spending Since Q2 2021 

III. Government or Deficit Spending Dominated Q3 GDP  

IV. Industry GDP: Finance Flexes Muscles, Share of Transport, Food and Accommodation and Professional Services Increased 

V. Real Estate Q3 GDP Bounced as Economic and Financial Concentration Risk Mounts 

VI. Agriculture August Employment Boost Unraveled; 48% Self-Poverty Rate versus the 5.9% GDP: Cui Bono? 

 

The “Surprise‟ Philippine 5.9% Q3 GDP Powered by Deficit-Spending and Bumped by a Statistical Facade

 

The Philippine Q3 GDP “surprised‟ with a 5.9% beat from public spending and statistical sleight in the face of a sweeping downdraft in the broader economy. 


I. 5.9% Q3 GDP: A Statistical Façade 

 

All hail, the Q3 GDP! Not. 

 

Yahoo Bloomberg; November 9: The Philippine economy remained on track to post Southeast Asia’s quickest expansion this year after a stellar third-quarter performance, although doubts persist amid softer consumer spending and a decline in investment. Gross domestic product in the three months through September rose 5.9% from a year earlier, the Philippine Statistics Authority said Thursday. That’s the first acceleration since the 7.7% pace clocked in the year-ago quarter. It’s also faster than the 4.7% median estimate in a Bloomberg survey and 4.3% growth in the second quarter. (bold added) 

 

Figure 1 

 

Even this media report seems troubled in explaining the embedded incoherence of the 3Q GDP.  

 

And once again, the consensus has missed badly the pin-the-tail-on-the-donkey exercise of guessing on the GDP guess.   

 

Well, "Southeast Asia’s quickest expansion" rests on the foundations of a statistical charade.   

 

First, peso-based Q3 nominal (N)GDP and real GDP were lower than the Q2 GDP.  (Figure 1, topmost chart) 

 

Lower NGDP signified slower aggregate spending, but the impact of the plunge in Q3 CPI (inflation) via the implicit index (deflator) magnified the real GDP. (Figure 1, middle window) 

 

Second, that the Q3 GDP remained below the exponential trend line reinforced the second post-pandemic trend line or the path of lower GDP.  However, the "low" base effects amplified the % growth.  

 

There was NO outgrowth in the 3Q GDP based on the trend lines. 

 

Regardless of consensus opinion, the coming GDPs will likely bounce within the range of the second trendline marked by the ceiling (exponential trend) and the floor (trend support).  The percentage change will be a function of base effects. 

 

II. An Across-the-Board Slump in the Expenditure Side GDP; Lowest Household Spending Since Q2 2021 

 

Let us delve more into the statistical economy. 

 

From the expenditure perspective, it was an across-the-board slump in the 3Q GDP.  

 

Despite the surge in Construction GDP, Real capital formation contracted -1.6% in the 3Q.    Durable goods, which account for capital equipment, plummeted from 10.5% to 1.7%. (Figure 1, lowest graph) 

 

Exports slumped from 4.4% to 2.6%.  Imports also contracted by 1.3% in Q3. 

 

Services exports, which grew by 11.4%, cushioned the decline of the Export GDP.  Services imports, which expanded by 27.7%, also tempered the shrinkage of the Import GDP.    

 

Capital formation, Exports, and Imports GDP have been on a downtrend since the reopening bounce of Q2 2021.  


Figure 2 

 

In the meantime, government construction, which jumped by 27% in Q3, also moderated the decrease in Real capital formation.  (Figure 2, topmost chart)  

 

Since 2013, the government's share of the industry's output has been on an uptrend.  Or, the construction GDP tells us that more and more activities are being diverted towards political projects. 

 

There is more.  

 

For the consensus, household spending is the pillar of the GDP since it commands a majority. 

 

Sadly, Real Household consumption GDP moderated to 5.0%, which accounted for the slowest increase since Q2 2021!  And to reinforce this slowdown, the trade GDP grew by 5.0%, which likewise represented the slowest increase since Q2 2021! (Figure 2, middle graph) 

 

Why the decrease in consumption? 

 

The Universal-Commercial Bank’s consumer credit growth has been raging (as of August).  (We defer this discussion to another time since the BSP has yet to release the September data.) 

 

Yet, what happened to the "ribbon-cutting" or Foreign Direct Investments (FDI)?  

 

August FDI grew by .34% and contracted 12.9% YTD.  Or could it be the overstatement of the FDI because a significant majority has been in debt?  From January 2016 through August 2023, the average share of debt to the total FDIs was 69.9%. (Figure 2, lowest chart) 

 

Interestingly, a former economic official seems puzzled by the struggle "to break out of a long-running $10 billion a year ceiling on foreign direct investment (FDI)."   

 

In our humble opinion, this struggle represents a lack of competitiveness, a function of suffocating political barriers. 

 

Stagnation in investments means slower capital replacement and expansion over time.  In turn, slower expansion means reduced consumption.   

 

So, what will be the source of the GDP in the coming period (year/s)? 

 

III. Government or Deficit Spending Dominated Q3 GDP  

 

If all aspects of the expenditure GDP underperformed, what sector boosted the 3Q GDP? 

 

We suggested this last October: 

 

Remember, authorities promised to do something to recover from the 2nd Quarter GDP bombshell. 

… 

In 1H, Deficit-to-GDP remained at a lofty 4.8%.  Unless the GDP picks up materially (ironically, driven by these expenditures), this ratio could expand.  The increasing dependence on fiscal measures to boost the GDP translates to "fiscal dominance." (Prudent Investor, October 2023) 

 

Figure 3 

 

Briefly, government or deficit spending. 

 

Deficit-to-GDP rose from 4.8% in Q2 to 7.5% in Q3. It was 5.71% in nine months of 2023. (Figure 3, topmost chart) 

 

Deficit-to-GDP soared from public expenditure, whose share of the GDP spiked to 24.5%, the highest level since Q4 2021. (Figure 3, second to the top window) 

 

Is the economy in recession?  Why is the government exercising "fiscal dominance?" 

 

The government admitted to this. 


GMANews, November 9: In a statement, the Department of Budget and Management (DBM) said the faster state spending “contributed a significant 36% or 2.1 percentage points of the Philippines’ remarkable 5.9% GDP growth in the third quarter of 2023.” (bold mine) 

 

36%! That is direct spending alone, which discounts all private sector spending like PPPs or industries dependent on a political clientele base!  

 

So, what happens when the slowdown—or worse—a "double dip" recession emerges?   

 

Will the deficit-to-GDP explode to another unprecedented scale? 

 

And yet the mainstream believes that politically based consumption would boost household spending? 

 

Do they not realize that what the government spends is always taken from the public? 

 

As such, the more the government spends, the fewer resources available for the private sector: the crowding out effect.  

 

The household spending to government ratio has been in a long-term downtrend since 2005. (Figure 3 second to the lowest graph) 

 

Seen from a different angle, the rise in the share of public spending GDP has taken its toll on consumers—shown by the opposite direction of trends. (Figure 3, lowest chart) 

 

And since insufficient production would back this, rising prices (inflation) would be a natural consequence.   

Figure 4  

 

Further, imports would have to rise to cover this deficit, putting pressure on the Philippine peso (via current account). (Figure 4, topmost chart) 

 

Also, because financing of deficits translates to competition with non-financial firms and banks for savings of the households, this would put pressure on liquidity, which, therefore, should lead to higher rates as evidenced by the accelerating uptrend in public spending and debt. 

 

Moreover, this intense competition for savings will also affect the stock market volume and, therefore, the performance of the PSE. 

 

And celebrating a lower public debt-to-GDP exposes the travesty of inflating the GDP.  

 

Yet, the cost of deficit spending-fueled GDP:  Today's spending will have to be paid for by taxpayers and peso holders tomorrow or in the future. 

 

There is no such thing as a free lunch (forever). 

 

IV. Industry GDP: Finance Flexes Muscles, Share of Transport, Food and Accommodation and Professional Services Increased 

 

Figure 5 

 

From the industry side, aside from construction, the natural winners were the financial industry led by the banks.   

 

The financial industry has been a principal financier of public spending—via net claims on central government (NCoG). Such operations have helped push liquidity into the system and have financialized the economy

 

Finance GDP surged from 5.3% in Q2 to 9.5% in Q3, while its share rose from 10.2% to 10.4%. 

 

Though the GDP has slowed for the previously blazing transport sector, its share continues to recover lost ground.  The factors described the lesser food and accommodation sector.  The transport GDP moderated from 17.5% to 11.6%, while the food and accommodation GDP slid from 27.2% to 20%.  The share of transport GDP increased from 3.2% to 3.8%, whereas the share of food and accommodation GDP likewise inched up from 1.6% to 1.8%. 

Figure 6 

 

Professional and Business Services GDP also slipped from 6.7% to 6.6%, while its share rose from 6.7% to 6.9% in Q3.  Has the intensifying politicization or centralization of the economy promoted the business interest of the legal industry? (Figure 6, topmost chart) 

 

V. Real Estate Q3 GDP Bounced as Economic and Financial Concentration Risk Mounts 

 

Finally, the real estate sector, which GDP increased from 2.9% to 4.2%, was a surprise beneficiary of the Q3 GDP.   

 

The industry's share also bounced from 5.3% to 5.9%, reaching its highest since Q3 2022.   Nonetheless, real estate's contribution to the National Account remains on a long-term downtrend since 2004. (Figure 6, middle window) 

 

All that said, four sectors, namely finance, real estate, construction, and trade accounted for nearly half or 46.4% of the real GDP while Universal and Commercial bank lending to them represented 44.72% last August, exhibiting the mounting economic and financial concentration risks.   

 

So, embellishing the GDP only disguises such risks. 


VI. Agriculture August Employment Boost Unraveled; 48% Self-Poverty Rate versus the 5.9% GDP: Cui Bono? 

 

Two last aspects.  

 

Government data produces bizarre logic.    

 

We critiqued the August labor data that suggested that the substantial boost in employment rates came from the agricultural sector.   

 

This September, the same sector was one of the three biggest to shed jobs. 

 

ABSCBN News, November 8: PSA data showed that accommodation and food service activities added 608,000 jobs during the month; followed by administrative and support service activities which added 535,000; and construction which added 481,000Manufacturing meanwhile led the sectors with the largest job losses at 888,000 jobs lost. It was followed by wholesale and retail trade, repair of motor vehicles and motorcycles which lost 722,000 jobs. Agriculture and forestry also lost 649,000 jobs. (bold mine) 

 

With a Real GDP of .9% in Q3, the agri sector barely grew.   It shows that the alleged improvement could have been inaccurate (so the retrenchment?) Incredible. 

 

Nonetheless, if correct, the September job gains in food and accommodation sector have occurred as its Q3 GDP has eased.  Should expected growth fail to materialize, these gains could be bound for a reversal.  

 

Job losses in the manufacturing sector and trade exhibit the slowdown in their respective GDPs. 

 

Lastly, how does this self-poverty survey square with the 5.9% GDP? 

 

Inquirer.net, November 1: According to the SWS, 48 percent of Filipinos rated themselves as poor as of September, an increase from the 45-percent self-poverty rate the SWS noted in June. “Compared to June 2023, the percentage of Poor families rose by 3 points from 45 percent, while Borderline families fell by 6 points from 33 percent, and Not Poor families rose by 3 points from 22 percent,” said the SWS in its report. (bold added) 

 

If nearly half of the population sees themselves as poor, who benefits from the GDP?   

 

Our humble two cents: this reflects the overstatement of the GDP.  It also exhibits the principal beneficiaries of political spending; viz., the political elites, the bureaucracy, the private sector attached to them, and/or the politically connected economic and financial elites (most of these demonstrated above). 

 

At the day's end, there's a steep price to pay for inflating the GDP to sustain the political boondoggles financed by cheap money


This closing quote comes from the legendary Ayn Rand:  

 

Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments. (Rand, 1962) 

 

____ 

References:  

 

Prudent Investor BSP’s Off-Cycle/Emergency Hike was about Protecting Deficit Spending via the Philippine Peso October 29, 2023 

 

Ayn Rand, “Who Will Protect Us from Our Protectors?”  The Objectivist Newsletter, May 1962, 18 AynRandLexicon