Ngaji Fiscal Policy
03/2
Musti konsentrasi. Ngaji fiscal policy soalnya.
Allahumma zidnii ilman nafi'a warzuqni fahman wasi'a. Allahummarzuqna fahmannabiyin wa hifdzol mursaliin wa ilhamal malaikatil muqorrobiin birohmatika yaa arhamarrohimiin
Govt and roles
Fiscal Policy instruments
Fiscal policy as stabilization tool and its limitation
Relation between fiscal policy and public debt
Discussion
Govt role
Program/policies
Nawa cita 9 priorities
long term dev prog rpjp 2025
Mid term dev prog rpjmn
Strategic dev plan renstra
Fiscal policy consist
Govt spending
Taxes, transfer payment
Keynes: G is most effective tool
Great depression 1930
Global financial crisis GFC 2008
4 key roles fiscal policy
Stabilizing macro economy
Affecting income distribution
Influencing disposable income Yd or Y-T through net tax (margin between tax paid n transfer payment received by household)
Respond demographic change
Manage public debt
Income distribution
Fiscal policy influence distribution of income through
Progressive tax
Transfer payment
Measuring income inequality
Lorenz curve
Gini coefficient
If country have good income distribution, there's equality
Lorenz curve is plotted for particular income distribution in economy
Line of equality is benchmark case of perfectly equal distribution of income of economy
Numerical measure of income equality known as gini coefficient summarizes info contained in lorenz curve
It is ratio of area between line of equality and lorenz curve to total area below the line of equality
Limitation of fiscal policy as stabilization tool:
Fiscal policy n supply side
Problem of deficit
Fact that fiscal policy is relatively inflexible
Fiscal policy n supply side
FP affect potential output and PAE
Govt spending on public capital play significant role in growth of potential input
Tax n transfer payment play role in affecting incentive n economic behavior. Also affect potential input
Critic: supply sider view > need for tax cut > lower tax lead people to work harder, save more etc.
PROBLEM Of deficit
Second consideration for fiscal policy maker thinking about stabilization policy is the need to avoid large n persistent budget deficit
Sustained govt budget deficit can be harmful>reduce national saving>reduce investment in new capital good (important source of long run economic growth)
The need to keep deficit under control may make increasing spending or cutting tax, fight economic slowdown, less attractive option
The fact that fiscal policy (FP) is relatively inflexible
FP is not always flexible enough to be useful for stabilization
Changes in govt spending or tax mist usually go through a lengthy legislative process> it reduce abolition of FP to respond in timely way to economic condition
How limitation be overcome
Spend more on public capital/infrastructure
Creating stable/conductive political condition
Relation between FP n public debt
Govt hv 3 way to finance the spending
Raise tax
Borrow money
Print money
Desirable level of public debt
Low debt reduce crowding out
Crowd out=situation when increased rate lead to reduction in private investment spending such that it reduce initial increase of total investment spending
Intergenerational equity
Concept that current generation should not impose unfair burden on future
Importance FP
Presence automatic stabilizer
Although FP difficult to change quickly, it may still be useful for dealing with prolonged episode of recession
1930 depression 1990 japan
Kartu Pra-Kerja supposed to be implemented in non-critical time like this.
so the policy dealing with labor/worker's maternity leave(cuti hamil), and funeral leave is also part of fiscal policy?
white collar are busy at the office saving their companies from being collapsed
everyone deserves payment based on their skills, i dont think there is a company who want to change the employer often. except to those who dont have skills, replaced easily. sad but true. tech has take over. u see the jalan tol, we use card ald
In this situation many tax payers is going to bankruptcy condition, and the raise of the tax in this condition will cause economic sectors in Indonesia collapsed.
it is sad to see some take cash for doing demo. seems that their health problems is not an issue for them
if we have good skills, company will pay us, no worry, but if we got no skills and we have a lot of demands, who want us to work as their employees?
seems those who demand a lot, the skills are not directly proportional to their demand, so how can the investor listen to them,
while tech and robot can take over.
it is happening round the world, artificial intelligence is taking over.
AI and even physical bodied AI is taking over, seems like cyberpunk future is going to be a reality. welcome to blade runner 2020
Any limitation of how much maximum money that government will get from world bank/IMF?
because the debt that indonesia have is getting escalade, and we don't know how to pay it back.
vietnam blue collar wage , minimum wage is around 2 juta by 2020.
and vietnam is growing, i checked world bank to confirm
then here, most blue collars are doing demo
true Vietnam's minimum wage is lower than here, but are the daily needs in Vietnam have lower price than Indonesia?
Vietnam implement different political system from us, which is sosialist-communist. So, their government provide most of the things that their citizen need.
vietnam government is working hard to bring expenses down. hope indonesia government could compete with that
nice to hv govt provide things we need but not with freedom of speech
Indonesian is better than socialist communist. maybe we can go back to Indonesia's history in Gerakan NonBlok
It will be better than the socialist if there are no conglomerates disturb the policy making
with democracy people can be self-independent
even the China is not totally socialist-communist
They implement at politic, but for economic, they're not
they open for foreign investment.
in this globalization era, we couldn't stand alone to boost the economic growth
Prostitution business could also become alternative income
Also casino.
It happen before as at ancol and around.
the casino in Genting is not open for Malaysian citizens. They allowed foreigners to play at the casino
locals also gamble, entering it illegally
before enter hall, we show ID. for Malaysian, they got prohibited
china has reforms its economic system into capitalist. But it work though, socialist political system and capitalist economic system turns out can be in line together
make sure the systems can be in line together (Socialist Systems in Politics and Capitalist Systems in Economy), We need a strong govt (single political party system)
Karl Marx might be shock with this reality (capitalist and socialist are complementary each other)
to face China's thread, we have to accelerate bureaucracy reform,etc
the problem was not how Marx can topple the capitalist,but how cant Marxism can CONTROL the capitalist into developing national economy
Karl Marx will make a revisions on his theory about economics n religion
single political party system means less disruption, less conflict, Orba did it with 3 party system, yet the corruption went rampant. :(
to make sure the single party systems will run in line that need a strong figure that have strong influence in all over Indonesia.