Surplus Singapore sells bonds

[stone]

Coearth made some fascinating comparisons between Singapore and USA/Europe in  http://gyroscopicinvesting.com/forum/ht ... php?t=9.60 .
One thing that stood out for me was his observation that the Singapore government sells treasury bonds despite always having a surplus of taxation over government spending. I've previously heard the same thing about the Norway government but Norway has the perculiar circumstance of having massive oil revenue. Singapore earns every penny purely through human labour and ingenuity. So the Singapore government spends say $2, taxes $3, sells $1 worth of Singapore treasury bonds and so has to dispose of $2 through foreign asset purchases by its sovereign wealth funds inorder to keep a lid on the value of the Singapore dollar / keep some Singapore dollars in existance rather than inadvertantly retiring them all via the excess taxation/bond sales.
This raises two points for me:
First it demonstrates what bullshit it is when our media says that the government taxes and sells bonds  in order to fund itself. Clearly both things are simply tools for currency management/ wealth redistribution/ herding people along. The function of government bonds is to create interest rates rather than allowing interest rates to fall to the natural rate for a fiat currency which is zero.
Second it is fascinating that Singapore creates this uphill treadmill for itself and thrives on it. They have the best educated population in the world, the lowest child mortality rate and longest life expectancy etc etc and yet seemingly are being the suckers doing lots of work for the rest of the world for nothing in return. They could, if they so chose, cut taxes, provide free government services, retire earlier or whatever rather than running the surplus. Instead they, in effect, fund western profligracy. They pay for us to bail out our banks, have unfathonable wars in far-off-istan, indulge in making >10% of the population unemployed etc etc.

[TBV]

Stone:

If I ran a tiny indefensible outpost of global excellence in Asia, I'd look for ways to encourage others to care what happens to me and my country.  Selling stakes in a rock-solid government's "debt" to all comers seems an excellent way to win friends and influence people.  Isn't that part of what's kept Switzerland safe for the last 150 years?

[stone]

TBV, that is a very good point. It is national security through creating mutal self interest with foreigners. I guess the whole "benificent dictator" set up is also about creating mutual self interest between the authorities and the population. Singapore may not be  "free" but the government definately seems to strive to serve every single Singapore citizen. In the UK, our government sometimes seems to not care less about swathes of the UK population.