Understanding Why Jokowi is so Upset on Low Government Spending

First of all,  this is such a heavy topic to write, especially from the non economist like me. But just to heads up, please bear on me, since this article is just to implement what I learned just now from Economic course 6013. So, any comments or challenge are welcome, and will be good learning for me. 

Ok, lets start from Keynesian theory that mentioned that during the crisis, in order to make economy keep running, Government should spending more instead of holding budget. The reason is, during the crisis, not only income reduced but also the confidence level will fall. When people doubt with the economy they tend to do more saving instead of spending. Thus, its kind of double effect, not only groups of people lost their job (thus lower income) but also the other groups which have the money won't spend it. So during this condition, it should be government who lead the spending so that able to give multiplier effect to the economy.  

That is why no wonder  in the last cabinet meeting, Jokowi really mad to his minister about the low government spending despite of budget availability. Why is it matter? you can imagine, the budget availability is not only come from tax, but also from Debt. When it come from debt, meaning there are cost of capitals (interest). Just for illustration, if we buy ORI or Sukuk retail, government have to pay 5-6% coupon interest to use. Those debts is suppose to be used to drive economy growth which ideally above those cost of capitals, not just put it idle in government account.  

But, if minister spend it during this crisis (low income from tax), is it meaning that government have to taking more and more debt to drive the economy? is it fair for every newborn baby in Indonesia already have big amount of debt because of us?
Well, its logically make sense, even from my last survey I did in my previous company said that  most of Indonesian belief they should avoid debt as far as they can. But how if we frame it like this, Debt should be ok as long we can generate more growth than the interest a.k.a cost of capital? Allow me to make some simple example, let say a store (warung) buy a bottle of Pucuk Harum tea with cost of Rp 2,200 but then sell at Rp 3,000, meaning the margin is Rp 800. However, he don't have the money, so that he borrow to bank with interest rate of 10% of the price which is Rp 220. So we can say every 220 money that spend will able to generate 800, which is more than triple, good isn't it?

So, are you saying you encourage government to take more debt?
Well, I'm not saying that, what I try to say is instead of we criticize the amount of debt took by the government, it will be more productive to woo they way it was used. Does the money able to generate higher growth than its cost of capital? does its invested in more productive asset instead of for short term consumption? Is it used in right timing, right target with right implementation? and the most important, does the money obtained from debt are being used?, because if its keep idle, its as good as 0% growth against whatever its cost of capital. So, no wonder Jokowi being so upset :)