Sunday, July 21, 2013

Why Government Securities Are The Safest

Because of two things it can do that private corporations cannot. The first one is to collect taxes and the second one is to print money. So that if a big payment is due the state can always raise income or corporate taxes or have its adviser -- the Bank of Mauritius -- order a container of the good stuff from Thomas de La Rue. But you don't want to play with these levers for day to day matters. Or to compensate for dumb policies. Nope. You want to design policies that are at least sustainable if not thoughtful.

Still these two trump cards puts government in a very strong position to undertake the biggest projects. Which is why, for example, it used to produce all of our electricity through one of its manifestations.

1 comment:

akagugo said...

We have 4 million square kilometres of sea area, right? And some of it is to be co-managed with Seychelles, right? Given that we are blessed with so much wind, is it far-fetched to dream of offshore wind farms being used to phase our long-verdue dependence on fossil fuels and IPPs and power both islands? And possibly selling our expertise to neighbouring countries?