Recently, a good friend and mentor in the United States (US) sent me an article for a campaign which was trying to reform the US Congress. It contained a simple but powerful argument quoting Warren Buffet who said that he can fix the US deficit crisis in minutes.

The idea is so simple that I think it can be adopted by all citizens who want a system of governance which allows them to throw out their governments over irresponsible actions. The proposed initiative would actually give a formal definition to irresponsible actions.

\”I could end the deficit in five minutes,\” he told CNBC . \”You just pass a law that says that anytime there is a deficit of more than three percent of the gross domestic product (GDP), all sitting members of Congress are ineligible for re-election.\”

I am no macro-economic type, or even a public finance person. My interest in finance and macro-economic is limited.

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Nonetheless, I know enough to consider Malaysia’s 53 percent or 54 percent deficit against the GDP a rather high percentage, and therefore we need to instil some kind of political discipline for every government of the day, regardless of who is in power.

Governments love to play Father Christmas with money that is not theirs; especially when we are nearing any election. Governments are elected to steward national resources but too often they think, and begin to believe, that “being elected for governance equals ownership of assets and resources.” Wrong.

One can only behave like Father Christmas when it is one’s personal wealth or family heritage. After all, even the idea of Father Christmas is only fiction, so all such behaviour with zero ownership must also be equally fallacious.

Do we really need to become an Iceland or Greece, or an almost imploding Euro before we realise that Father Christmas is fiction and not reality? Did our parents not teach us prudence; not to spend more than our means? No one can spend beyond their earnings, and remain sustainable over a period of time. Sustainability is always longer term prudence.

Therefore, can I propose that we, rakyat Malaysia or RM, move a private citizen’s bill like the one being proposed by the more prudent Americans so that we too can rein in on our burgeoning budget deficit which is becoming fashionable the world over; whether within the private sector, or in governments. How else could so many banks and financial institutions come under so much review?

Warren Buffet’s proposal

What then is the key ingredient or recipe of Warren Buffet’s simple but good proposal? To my mind it is to create bipartisan agreement about how to take care of the future welfare of the nation in terms of longer term sustainability.

Another view is to seek consensual agreement with one absolute but concrete definition of what can be considered an intolerable level of deficit.

Of course we can allow the economists to argue whether that level should be three percent, five percent or 10 percent. But the more important point is that this proposal will allow citizenry to extract a binding national commitment for the future of our children and grandchildren; from all sides of the political divide.

In short, it will create national political will and define a strategic limit for what the national good is but which is no more dependent on the whims and fancies and power-broking antics of the different political actors. It becomes absolute limit for tolerance for spending outside our means.

When we were launching the productivity measurement programme at the National Institute of Public Administration (Intan) in the early 1980s, one of our strategic arguments was that we needed will, skill and strategy for the success of any culture change programme. Our formula required all of political will, with business or financial skills and one focused strategic imperative which needed to be decided well before the actual event or programme.

The GTP and future

The Government Transformation Programme (GTP) started and led by Prime Minister Najib Abdul Razak\’s government can become an excellent initiative for longer term economic productivity and financial accountability.

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But, we cannot pretend that growth and economic improvement is a given, under all our differing and different global circumstances. So, to be sure we are currently achieving an almost five precent GDP growth, but is this sustainable over the longer term with all this pump-priming for the general election?

For example, what if Europe’s current bailout agenda unravels and the Euro is destined for a split-up and the resultant contagion of a reversal to each of their (and our) own currencies? What if the US overnight introduces a gold-backed currency exchange; where would we stand?

What if, what if, what if? Discontinuous change is always disconcerting.

In the past the Economic Planning Unit (EPU) conducted all our macro future scenario analysis, even if only relying upon the tried and tested input-output (I-O) analysis methodology. Does the EPU today do this anymore? I am not sure.

If not, who is capable of doing this with some degree of competence from a macro and national perspective? Can we therefore, today rely merely upon either the finance or the fiscal functionaries alone to define this strategic and longer term direction of this nation?

Today we are in a world that cannot be defined entirely by the past. While the past is needed, it alone cannot define future trends and happenings, especially in a highly connected global village. Even the traditional I-O analysis has its limitations of predictability.

Therefore, way back in the late 90s, we at the National IT Council (NITC) Secretariat, with the help of Shell Global, brought its scenario planning expert to conduct training and to present different forms of alternative scenarios to the then-cabinet vide the NITC.

Rather unfortunately, two of the then brightest and smartest people in the NITC-cum-cabinet briefing then, were the first to shoot down that alternative scenario; one which accurately anticipated the political crisis within the Barisan Nasional and also the global economic and financial crisis which led to the Malaysian currency crisis.

Smarter people are sometimes their own greatest enemies. They forget how to listen, after some time, because of the corruption of power.

Therefore, we ordinary rakyat Malaysia can now become smarter than the so-called smart leaders, exactly like in America, and demand for a strategic definition and limit for the budget deficits before it is too late. Are we game for it, dear Malaysians?