Debt is the burden that our children cannot bear

The main task of the new legislature is dealing with debt.

According to a Ministry of Audit report on the final accounts of the central government for 2006, accumulated debt for different levels of government stood at just under NT$4.2 trillion (US$129 billion). Auditor-General Lin Ching-lung (林慶隆) said the government has earmarked more than NT$100 million each to more than 1,500 public construction projects, with a total cost of NT$2.5 trillion, without considering feasibility, assigning proper budgetary measures or following up on implementation.

Every year, debt repayment budgets fall short of expiring debt by NT$300 billion. This means the government's debt servicing fund must issue new cash to cover debt payments. For more than a year, however, unpaid central and local government debt has exceeded legal limits established in the Public Debt Law (公共債務法).

Taiwan's culture has resulted in politicians making expensive election promises. Although most are never realized, they are a heavy burden.

We must deal with the consequences. An aging population, falling births, a lack of sources for retirement funds, shortages in the national health insurance and a government operating in the red adds to the problem.

It's no secret that politicians are using the next generation's money to make ends meet. Before my children reach adulthood, they must pay for extravagant political promises; yet being a minor is not a sufficient reason for writing off debt. Do our national leaders want our younger generations to move overseas because they don't want to inherit this problem? Are those who cannot leave only getting what they deserve?

Nothing be accomplished without necessary means, which is why former Academia Sinica president Lee Yuan-tseh (李遠哲) said that not all election promises can be realized. Yet when politicians promise a little more, others must follow, leaving no one to stand up and say "Enough."

Article of the Budget Act (預算法) states: "Where legislators propose bills that greatly increase annual expenditure or decrease annual revenues, legislators shall seek comments from the Executive Yuan and point out the sources of funds; and, when necessary, proposals for amendments to other laws shall also be presented."

And Article 34 states: "With respect to major public construction projects and major policy implementation plans, before the budget estimates and budget proposals are compiled, a cost efficiency analysis report on the alternative measures and substitute measures must be first drawn up and attached with a description of the financing and capital employment. The report shall also be forwarded to the legislature for its files and reference."

The general budget is fixed. More spending in one place must be matched by less spending elsewhere or the government will have to increase debt, which will only make matters worse unless more wealth is created.

Government is out of control because the Cabinet and the legislature have not obeyed the law. But there has been no investigation. If a private company were managed like this, the manager would be forced to step down even if the company hadn't lost any assets.

Spending money, mortgaging assets and being held legally responsible are not praiseworthy forms of conduct. Yet the bosses of this country -- the general public -- are unable to demand of the government the standards that shareholders can apply to company managers.

We need politicians with vision who do not make empty promises and who are capable of conducting a cost and benefit analysis, not a bunch of CEOs cooking the books.

Jai Ben-ray is the dean of the Department of Social Sciences at Nanhua University.

Translated by Perry Svensson and Anna Stiggelbout