Federal Finance Minister Dr Hafeez Sheikh should at least be given credit for admitting that there is a problem. However, instead of acknowledging that the problem lay with free-spending cabinet colleagues and the protection from taxation to some sectors, he attempted to shift the blame for his Ministrys failure to bring down the share of the federal deficit to the power sector and public sector enterprises (PSEs). While addressing the seminar of the Pakistan Institute of Development Economics on 'Economic Growth and Development: New Directions on Tuesday, Dr Sheikh said the government had curtailed its expenditures, and the PSEs and the power sector were getting huge subsidies. The subsidies to the power sector might be unpredictable, being dependent on global oil prices, but the subsidies to PSEs are predictable, and not providing for them properly would mean a failure of the budgeting process over which Dr Sheikh presides. There is a basic principle involved here. Only if the government raised enough revenue to cover its expenditures, can it control the deficit. On the expenditure side, the Finance Ministry must prevent the members of the cabinet, as well as the professional bureaucracy from luxurious living at the taxpayers expense, but on the taxation side, there is needed the extension of the tax net to the sectors that have been kept out of it, not because of any unaccountable oversight, but because its representatives are heavily represented in all legislatures, to wit agriculture and services. Without taxing these sectors, the goals Dr Sheikh outlined, controlling the deficit, and increasing tax collection and private sector participation, which he also identified as key challenges to the economy, cannot be achieved. That these are identified by Dr Sheikh as key sectors indicates he realizes the problem. One of the burdens he mentioned was that of higher security spending, which is caused by Pakistans participation in the USAs war on terror. The losses suffered by the average Pakistani in terms of quality of life and instability are far greater than those suffered by average Americans. The US cannot conduct its wars at the expense of poor countries. It is perhaps merely a coincidence that Dr Sheikhs remarks came at the time that the USAs refusal to pay up either its commitments under the Coalition Support Fund or the Kerry-Lugar Act, but it is enough to show that the War has cost us dearly and our reimbursement for expenses are nowhere in sight.