Fiscal policies
- Sumedha Rajbanshi
- Nov 22, 2025
- 2 min read
In a nutshell, fiscal policies need to exist (the why is actually rather a lengthy debate, so I can't go into it).
However, as with any firm or business or agent providing goods/services, the government's ability to implement particular fiscal policies rests entirely on revenue vs costs. A government's revenue source is usually taxation, selling debt, creating income generating firms of their own etc. The costs therefore, are obviously all the programmes they provide for the general public. It is common knowledge that government budgets run on deficits; this is acceptable in the long-ish run under various conditions. They wish they didn't run on deficits, but it is practically infeasible it seems.
Governments thus need to make prudent judgements on how to spend (unsurprisingly).
They also spend a lot on wages to those government workers, going around arguing about what the government should spend on.
A recent idea is: government running grocery stores, to provide people access to quality produce etc. Now, unlike for healthcare, education, defense, infrastructure etc., I disagree with this concept. Why?
Groceries is a low profit business, in comparison to all the types of businesses which exist (big 'grocery' stores are profitable because they don't only sell groceries; they're technically not grocery stores). Also, compared to the price of the other services I mentioned, grocery prices are already low in magnitude.
The incentive to have government run stores, is to suppress prices. Quality products require quality production inputs, which are expensive. By suppressing the price of low profit products, you teach people to undervalue quality. This creates problems for producers along the supply chain.
You know what would allow people to buy quality groceries? Paying them wages sufficient for them to buy said groceries, just like the government workers. Price controls on low profit goods, might require the government to incur additional costs elsewhere in the future.
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