When the income of a person, family, company, association, university, hospital, or public authority stagnates or declines, the natural reaction of the person who has the handle on the purse strings is to refuse to cut spending, to try to do everything to increase his income: and if he is not successful, to go into debt to maintain his living standards. Until it is no longer possible.
This is already the case, in the West, for most people and organizations: the debt has reached a level that must be reduced before it leads to bankruptcy.
Many consider then, that in order to reduce it and to live within its means, at best rigor or austerity will be imposed; and at worst a significant reduction in living standards.
This reasoning is false, because it refuses to see that it is possible to achieve the same level of services with less money; by reconsidering spending.
Obviously this does not mean telling the poorest they must eat less. Or those who face fixed costs (for transportation, training or learning) to reduce them. The following thus only applies to those citizens who, from a certain level in the middle class, can reflect and do as well with less. And that includes all businesses; all ministries, and all organizations.
Each of us must ask himself these simple and radical questions: can’t we reduce our energy consumption? Can’t we purchase our food some other way? Our clothes? Our vacations? Our books? Our music? Each of us has much to gain to engage honestly in this exercise. He would find that in the best kept budgets countless potential savings are possible; and useful, even if they are tiny.
Each company must also consider how to give the same service by completely redesigning its organization. By accelerating the introduction of technical progress, especially information technology; by bundling services, by having potential suppliers competing against each other, by better managing overhead costs.
Each ministry can and should do the same: instead of calling for more resources from the budget minister, who can only deny the request, each pound foolish minister should, in particular in the preparation of the budget that begins in 2013, think very concretely about his missions, rethink very boldly his organization, and distribute dedicate aid to those who really need it.
Universities, hospitals, town halls, regions, cooperatives, unions, associations must do the same.
Rethinking the expenditure must be the top priority. If every family, every business, every municipality, county, region, ministry, university or other were to embark on this review (sometimes called, in the language of a consultant, the « zero-based budgeting »), the economy would have more competitiveness, life would be nicer, the debt burden would decrease, society would be much better.
Still one must have the courage to face the rents, to denounce the arrangements between friends, to speed up reforms.
Naturally, this entails setting up support methods, to facilitate transitions and not to have to defend obsolete jobs by providing the resources, through renewed efficiency, and create new ones, more interesting; more useful; more rewarding.
It is time to do so; as all major events, it is both a necessity and an opportunity. Now. Or never.