How will festivities benefit metro?
In The Herald on Wednesday you reported on the proposal at a meeting of the Nelson Mandela Bay metropolitan council to reprioritise the spending of R700m of loan capital in such a way that R45m could be spent on festivities (“Why metro wants R700m loan).
Since the Mercantilists of the 15th century the question is asked when a government – applicable to local government as well – should fund expenditures from taxes and when from loans.
For about 400 years from the time of the Mercantilists, economists found only one justification for loan financing – an emergency.
Without exception wars were the standard example given.
Are festivities emergencies? In 1855 German economist Carl Dietzel was the first person to suggest a justification other than an emergency – to establish something of lasting utility.
What is lasting about festivities?
In today’s terminology Dietzel’s “lasting utility” is called public spending on infrastructure.
What infrastructure will follow from festivities?
CVR Wait, professor emeritus, department of economics Nelson Mandela University
COUNCIL MEETING: The Nelson Mandela Bay council meeting held at the Nangoza Jebe Hall in New Brighton, where a proposal was made to obtain a R700m loan