The Tribune

EDITOR, The Tribune.

A governing party insider was boasting in the press recently that The Bahamas has no trouble obtaining more debt by floating bonds either here at home or abroad, using them to make good on the country’s payment obligations, ie borrowing more money to pay existing debt obligations, increasing the national debt each time.

This curious public policy is continued in the face of four decades of spending more than the government takes in and borrowing to cover the shortfalls, the burgeoning and expensive public bureaucracy and wanton waste.

Successive governments share the responsibility of increasing the country’s debt that has now caused their fiscal dilemma, with average deficits of $165m a year from 1991 through 2012. (That’s $3.6bn if you’re counting).

Yet, so far, the only answer to solve the government’s fiscal problems is to implement a new tax scheme (VAT), not collect the taxes already allowed by law nor control their profligate spending or implement policies that will help the economy grow.

To paraphrase Winston Churchill, we cannot expect to tax the economy into growth and prosperity.

If history is used as a guide, increasing the tax burden will probably slow the economy even more. What then?

RICK LOWE

www.weblogbamas.com

March 16, 2014