Don’t leave your children a 400 billion euro debt

The Netherlands have a 400 billion euro national debt. Protesting budget cuts now means burdening your children with debts later.

Fifteen years ago, my parents discussed a financial subject in my presence for the first time. We were anticipating our annual holidays, during those months when we’d be looking forward to it, trying to find the cheapest airline tickets and thinking about what to do once we’d be there.

From the conversation, it turned out that my working father and my mother who was unfit for work would borrow money from the bank every year to pay for our holidays. The rest of the year would be spent paying off the debt again and once they’d succeeded in doing that, about eleven months later, they’d borrow a new loan again for our next vacation. It was about thousands of euros, a humongous amount. Years and years of saving money finally allowed them to stop depending on borrowed money and finance the holidays on their own.

Meanwhile, the government is asking themselves: should we borrow another 2, 3 or 4 percent of the Dutch national budget? Our Labour Party asks if we should be cutting down on our spendings at all; wouldn’t it be better to wait for the economy to recover first? I’m having a hard time staying in my chair. I have been for years. Waiting for the economy to recover.

Alarm bells are ringing by now at the Netherlands, Inc. Last week, the Dutch national debt hit the record amount of 400 billion euros, and it’s growing by another 3.3 million euros every hour. We’re approaching 403 billion euros. Through the national debt, every citizen of the Netherlands now has a debt of over 25,000 euros, and the worst part is that it doesn’t even seem to bother us.

With these numbers in mind, I think back to my parents’ debts, the ominous feeling I would feel looming over those loaned holidays, and the efforts it took them to build up a positive balance again. What would you do if you would login to your online banking service tomorrow and your balance would show the number 24,124 in red? Would you put off doing anything until your personal economy starts doing better? Most people would not feel very tempted by that kind of ‘triple A passiveness’.

And yet, even though in personal debt emergencies we’d immediately cut down on our own spendings, the government is kept from doing the same thing with large scale protests and societal worries. This counter-productive behaviour shows that people are worried about possible permanent tax increases or reductions of our welfare state. This is how it tends to shut down every discussion. Why doesn’t the government assuage those worries?

Budget cuts and tax adjustments should come with an explicit expiration date to emphasise the temporary nature of such measures. It should be indicated by what date a law will stop being in force or under which economic circumstances it will be lifted again, or even turned into an investment. This will make many measures more reasonable and put them into a long term perspective.

One thing is clear: we can’t just procrastinate until the crisis blows over, because who knows when that will be, assuming it’ll ever happen at all? And you don’t want to leave your children a 400 billion euro debt.

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