As individuals, we depend on the services that governments provide. Collectively, we look to them to tackle the big problems - from long-term climate and demographic change to short-term crises like pandemics or war. Funding this activity, and managing the required finances sustainably, is difficult - and getting more so. But governments don't provide - or use - basic financial information that every business is required to maintain. They ignore the value of public assets and most liabilities. This leads to inefficiency ...
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As individuals, we depend on the services that governments provide. Collectively, we look to them to tackle the big problems - from long-term climate and demographic change to short-term crises like pandemics or war. Funding this activity, and managing the required finances sustainably, is difficult - and getting more so. But governments don't provide - or use - basic financial information that every business is required to maintain. They ignore the value of public assets and most liabilities. This leads to inefficiency and bad decision-making and piles up problems for the future. Governments need to create balance sheets that properly reflect assets and liabilities, and to understand their future obligations and revenue prospects. Net Worth - both today and for the future - should be the measure of financial strength and success. Only if this information is put at the centre of government financial decision-making can the present challenges to public finances around the world be addressed effectively, and in a way that is fair to future generations. The good news is that there are ways to deal with these problems and make government finances more resilient and fairer to future generations. The facts, and the solutions, are non-partisan, and so is this book. Responsible leaders of any political persuasion need to understand the issues and the tools that can enable them to deliver policy within these constraints.
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