ST_Casestudy_Growing_A

The following is an extract from The Economist:

t some time,

as a homeowner and a family man,

and you have, at some time, lived beyond your means in an effort to provide for your

family all the things that they want

i.e.

you had a cash problem and decided the only way to get out of trouble was to

rashly throw more

and more money into

the

hat, just to keep things moving and prevent your personal “economy” from collapsing around

you.

If you kept

that going for a long

time and

then finally realised you could do no more, had no way out and need help - then you know

exactly how

some governments

feel at the

moment.

Governments provide for the people in their countries. Depending on the country involved, they will provide for law and order, health,

education and employment services, upkeep and maintenance of the towns around you, transport (Including roads, utilities, water),

social

services and the vast mechanism needed to keep the life of that country (including wars or a military outfits) running.

To do all that they need money - a lot of money. They raise most of the necessary funds from all of us, through taxes.

The problem is to get elected they have to make promises and to keep the people who elected them happy (

giving

some of that money

to them

so they will vote them in

again)

. T

hey sometimes promise more than they can afford to deliver.

Then something bad, maybe a recession comes along and their revenues fall just when more money is needed for things like the

social

services, helping the unemployed etc. Either the government cuts back on spending, raises revenue (i.e. taxes) or it borrows

money and

runs a budget deficit.

Does it matter governments of the day chalk up these debts?

After all, world governments owe the money to their own citizens, not

others.

But the rising total is important for two reasons.

First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more
state interference in the economy and higher taxes in the future.
Second, debt must be rolled over at regular intervals. This creates a recurring popularity test for individual governments, rather as
reality TV show contestants face a public phone vote every week. Fail that vote, as the Greek government did in early 2010, and
the country can be plunged into imminent crisis.

the higher the global government debt total, the greater the risk of fiscal crisis, and the bigger the

economic impact such crises will

have.

It is not a pretty picture.

But this is

the issue for which the

medicine

must

be sought and

taken. We, the people, have to understand that these measures need

happen.

This is our

money

governments are spending and they’re doing it to provide us with services... admittedly- they don’t always get it right

and much

is wasted.

The Economist (funny, is it not?)

What does biting the bullet look like?
Sheila Damodaran

When the money is not there, then there are two strategic imperatives for the country:

Government s

pending levels must be

evelled and reduced

before problems get worse.

Sustaining government spending

(that

government

when

help people, they would grow

, i.e.

refer

to core-semi-prephery-periphery concepts of

development:

SCENARIO

is a product of

linear thinking

. T

his thinking

needs to be

carefully

checked and reduced

as we are

often not aware that

we are trapped

in these thoughts.

ountries can go into

bankruptcy as well and

that’s no fun

for anyone

involved.

Unfortunately, this

is also the thinking

fostered intentionally

with

in education

part.

Learn to s

ee t

economy

grows and

fuelled by the private sector

who has learned to

grow

systemically

(

who have

invested in

self-

reinforcing

system

(grows by itself rather than by directions)

of growth

see

SCENARIO II

below

)

without

expecting

government

foreign investors

(more debt)

needing to

timulat

(or bail)

constantly

This needs to happen

both the best

and worst of times. These

organizations are typically ones

who

are quieter and

o not

seek

to get into the political or news

limelights.

They are there at

every level of society. They have

developed the

inner dexterity to work with rather than against the world.

Pay attention

to these

organizations from the sidelines, not to

help them but use

them to help other organizations who need help i

understanding how

it is done.

This is not the time for bailouts. Organizations or individuals seeking bailouts are individuals who were already wasteful within the system or
brought it to where it is today. This is less obvious to all, than we believe.

The need to limit or control such tendencies becomes critical at this stage. Otherwise the eventual systemic implications for the globe can
become too overwhelming to quite fully help ourselves reel out of the situation.

The above scenarios, taking Botswana as an example, present how a nation may learn to understand what traps a nation into national debts
(Scenario I) and what it needs to grow its revenue without incurring growing debts (see Scenarion II).

The two views below present perspectives we hold that gets in the way of us in trying to see and understand these traps. There are two
options for us. The choice as to which way we go, is entirely ours.

Systems Thinking Case Study
A Nation Coming Together: Seeing a Nation Grow Systemically
Sheila Damodaran

The clock is ticking. Every second, it seems, someone in the world tries to save it
but not without taking on more debt. The clock here courtesy of The Economist
shows the global figure for all (or almost all) government debts in dollar terms.

DIFFERENCES IN VIEWS OF THE
NON-SYSTEMIC AND SYSTEMIC WORLDS