Fasten Your Seatbelt? And You Go Drown With The Plane

I'm not telling about Merpati Airplane accident in Papua. I talk about an interesting article from Didik J. Rachbini (Kompas, 4 August'09) about persuation to tighten our belt on 2010. He questioning that our APBN target seems too optimistic. Thus, he asked to prepare our self to be thrifty.

I hope Didik didn't mean to ask people keep their money on the pocket and less consume. It was a suicide, even in economic crises. Here's the logic. You keep your money, producer get loss, then who paid the wages? The most dangerous arise if producer decide to lowering their output level. It means input "efficiency" or some "rationing". Okay, it simply to understand by looking our famous equation Y= C+ I + G +NX, consumption (C) muss keep going on positive trends. That what such a stimulus for, isn't it?

So, it fair to ask people keep spending their money, wisely. Money are cheap now. We look interest rate as money price. Nowadays. BI as central bank looking continue their BI'rate cut off. (6,75% on July , since Early year Bi cut off interest rate for 225 bps, and Darmin Nasution as Senior Deputy of BI promise to continue this trend. We need consumer confidence (to consume or to invest) than they save their penny.

Update: Just announced this morning (5 August'09), BI rate fell to 6,50%)