THE Finance Ministry, in its report on the first six months of the current fiscal year, has revealed an unfortunate situation. Apart from the Central government, the Punjab government too has already run up a deficit on the non-development account, and there has already begun a crippling dependence on loans. According to the report, the federal governments income in this period was Rs 909.92 billion, but its expenditure was Rs 1298.06 billion, reflecting a deficit of almost Rs 400 billion. Of the provinces, the Punjab also ran a deficit, Rs 25.49 billion, and the surpluses for the other provinces, while significant, did not really reflect a healthy state of finances for the provinces. The federal spending spree was covered because the government borrowed Rs 403 billion, Rs 110 billion in foreign loans, the rest being domestic borrowing, with bank borrowing constituting Rs 107 billion. Similar previous borrowing was reflected in the expenditure, which included Rs 294.17 billion in interest payments. One item alone, the sheer number of ministers, has not been controlled, and the ministers have spent regardless of the taxpayer from whom the money will be recovered. As the report states, total government income has grown 6.1 percent. However, the growth of expenditure by 8.7 percent is what explains the financial difficulties the government is facing. The government explanation for this imbalance in its finances is spending on the War on Terror. The government must both reverse a policy which the people of Pakistan do not want followed, and explain why it has failed to get out of the USA the requisite compensation, and why it is allowing the USA to fight this War on the cheap, both in terms of money and lives. In both cases, Pakistanis are being made to suffer the consequences of the USAs actions. Also, the government should admit to itself that there is a crisis, and end all forms of extravagance, especially by elected representatives who seem to think this is what they have been elected for.