The graph below shows the statistics for the government's combined domestic and foreign debts from 1991 till the present. Forecasts are provided up to the year 2017.
Courtesy of CPI
Pak Sako examines the trend in our government debts...
"There has been no sign of the debt accumulation reducing or levelling out since the East Asian economic crisis of 1997.
Large government deficits were first incurred in the aftermath of this crisis. Then prime minister Mahathir Mohamad justified this as part of government spending in commercial enterprises to stimulate the economy.
In reality, the loan proceeds were allegedly used for questionable purposes, such as to fund large-scale projects awarded to crony capitalists and to bail out their failing companies.
The federal government's borrowing shifted into higher gear from 2008, the year the Barisan National coalition lost its two-thirds parliamentary majority.
The deficit expenditures have been justified as a short-term tool. But they have continued for almost a decade and a half; they have become a permanent feature of the government’s financial policy.
The government's financial imprudence is therefore a primary cause of the country's indebtedness."
"When we are compelled to push our land and labour resources to new limits to produce economic growth in the attempt to surmount large debts, there will be damaging social and environmental consequences. We will have to rapidly liquidate our oil and other resources at the expense of the wellbeing of future generations.
The average citizen could be taxed more.
To free up cash to service debt, there could be cost-cutting in the provision of public services, such as healthcare... Workers might also face longer working hours for the same or lower income.
A more devious method ... is when the borrowing government increases money supply by printing money to devalue the debt. The lending citizens lose out. Inflation speeds up and the currency will weaken..."