The importance of accumulating surpluses in national budgets

When the 2008/9 financial crises happened, the US implemented quantitative easing measures called QE1, QE2, etc. They literally “printed money” to inject into the economy. Perhaps there was no other choice.

In the case of Singapore, they have been diligently building up Budget surpluses year-after-year. Even some of their own citizens wonder why they are doing so. Well, the moment of truth just happened – the covid-19 caused the greatest plunge in demand ever experienced in recent times. As the Singapore Deputy Prime Minister put it – this is not a rainy day; it is a storm! And it was for such occasions that the national reserves were intended.

Of course, this did not come about easily. It was through years of prudent governance that this was possible, saving away Budget surpluses even though many scorned at that action. Check out this article.

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