Over the years, I have always tried to understand why things are the way they are. One thing that I did learn is that there is a relationship between comfort and complacency. If we are comfortable, we burp and fart. If we become uncomfortable, we rant and roar and look for someone to blame.
Am I getting a little set in my ways or is this a case of rumination? And no, there is no rum associated with rumination.
On the Cost of Gas versus the Cost of Oil
When oil was $110.00 per barrel, gas was $1.10 per liter. Then, the price per barrel halved to $55.00 per barrel, yet gas was still at $1.10 per liter. Is this a case where we got comfortable with the $1.10 per liter?
Another question; where is all this profit going?
On Governments selling Assets
Over the years, I have often compared the financial decisions of governments with my personal financial decisions. Although there is the difference of scale, I believe that the fundamentals are the same.
There were times when I got myself into situations where my expenditures exceeded my income. I always came to the same conclusion. I had 2 options. Either, I had to increase my income to match my expenditures or I had to decrease my expenditures to match my income. In other words, I had no choice but to live within my means.
Overspending is a serious financial problem at any level. And yes, you can sell your assets to cover off some of your overspending for the short term., but at the end of the day, you will have no assets but you will still have the spending problem.
And yes, I do understand that increasing taxes (revenues) and/or cutting spending (expenditures) can have negative consequences for the politician and that sound financial decisions can adversely affect their chances of re-election.
To date, I have spent most of my money on wine, women and song…….and boats, ………….the rest I wasted.