Wednesday, October 20, 2010

A Simplified World

The world has to realise benefits aren't everything. It has to be balanced with job creation and paying taxes.

If I may simplify societies in the world into 3 areas; it will be the government, the people and the businesses. The 3 are closely linked and each survival depends on the another.

The government is voted into existance by the people. Its survival depends on the continuing confidence of the people in the government. The people are most concerned with policies that directly affect them. This shouldn't be a surprise and the 3 major concerns are related to employment, benefits (healthcare, welfare and/or pension) and not surprisingly taxes. However, the businesses are usually only concerned with profits.

The businesses must go back to basics and understand it is economics which should be driving them, not accounting. An economic driven business model is a long term model whereas an accounting driven model is probably short term. Therefore the businesses should operate on a supply and demand model before considering accounting.
Demand, supply and employment are highly corelated. Demand is met by supply which should create employment which in turn create demand. This is probably the self-sustaining model for a localised business in the long run. Moving production outside of the demand market to cut cost will increase profit in the short run but the unemployment will ultimately be reflected in the demand market sooner or later.
Therefore, the government should pro-actively manage taxes. Businesses should be encouraged and rewarded to operate within the country and to create jobs. After all, the revenue for a government is mostly from the taxes collected from businesses and individuals. Without them, there will be no revenue for the government and the government will cease to exist.

People should know their long term needs and stand up for it. They should not take advantage of the government or businesses and abuse them. Nor should they be taken advantage of and abused by the government or businesses. They should understand nothing is free, everything has a price (cost) and ultimately, they will be paying for it one way or another.

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