So . . . the G20 party is over, the guests have all left, and that that needs to be done now is clean up. And the centrepiece of this meeting of the, uh, minds (?) is that they have agreed to do their goshdarn best to cut deficits by 50% within three years.
Now, I'm no anti-G20 activist or anarchist or what have you (I'm actually pretty unclear on what a lot of the protesters are protesting). But this result is worse than useless. Just like any other international non-binding agreement, it's entire value came and went when it was signed. Because the deficit reduction will not happen, and if it does, it won't be on that timeline.
Why? Because we can't predict that far in advance. Think of everything that has changed in the world in the last three years. Could you predict three years ago where you would be today? Can you predict where you will be three years from now? And you're probably only one person, unless you've got other personalities living in there. I can't predict it, and I can't see how anyone can predict the state of the entire world in 2013. And for that reason, the concensus to cut future budgets is silly.
The only thing I'm moderately certain of is that there will be some major change in the next three years that will derail the plan (and I'm not even certain of that). Besides death and taxes, the only certainty is uncertainty. Add to this the likelihood of placing most of the burden of the budget cuts to the end of the three year period (to defer negative political effects, the necessity of paying interest up front, etc) and the probability of the plan coming to fruition decreases sharply.
But if that's true, you ask, then why plan at all? If no three (or five, or ten) year plan will work, why not just fly by the seat of your pants all the time? I don't think that there's anything wrong with planning or having long-term goals. Just be realistic about it. Like most people, you probably had at least a vague plan for your life at various points. How many of those plans happened?
I'm not saying that we don't follow through on our plans, but our long-term plans change as our circumstances change. We give up some goals and go for others. Situations arise which need immediate action, deferring other plans. So planning in this way, which individuals do, businesses do, governments do, are useful only in giving us a vague map of where we would like to be headed. The value is in creating the plan and prioritizing the goals, not necessarily in following through.
And if you need any more proof that the G20's plan won't ever be implemented, keep this in mind too - most of the leaders who attended the summit will be coming up for reelection before that three year period is up (the Australian Prime Minister actually lost his job the day before the summit!). Some of them will abandon their promise to win the election, and others will lose the election, and we'll have a new crop of leaders to make new three-year plans that will also be scuttled.
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