Like most folks, I hate to owe anything to anybody. I feel a sense of supreme satisfaction paying off a credit card. I even enjoy paying bills (except BPL which infuriates me), but as I said, knowing that I’m momentarily debt-free and what I earn is what I get to keep - at least until the next bill comes along - provides a good-all-over feeling.
So, like many, I transfer and upload that admittedly obnoxious moral satisfaction from a personal level to a national level. If I can balance my budget, why can’t the people who run the government? They borrowed. Now, isn’t it the moral thing to do, to pay back what you promised you would? Maybe. Then again, maybe not.
National budgets, balanced or tipsy, hardly keep us awake at night unless we are running for re-election or hoping to displace those running for re-election, but does a balanced budget really matter?
Ever since Hurricane Dorian slammed into Abaco, Grand Bahama and the finances of The Bahamas, the Deputy Prime Minister and Minister of Finance Peter Turnquest, Financial Secretary Marlon Johnson and others have been labouring overtime to try to get us to understand that the balanced budget trajectory they were on has to take a back seat to putting lives and a country back together. That seems obvious. Apology not needed.
What is needed is transparent accounting, an explanation of how the devastation impacted and will continue to impact revenue and a clear and transparent picture of what the benefits of expenditure - including infrastructure, stepped up law enforcement and incentives to get business back up and running - will be and most importantly, what the costs of mitigation against future Dorians are.
The second reason I’m entering unfamiliar territory of national budgets - about which I know less than just about anyone - is because I heard a very prominent American recently declare the US was facing a “ticking debt bomb”. It sounded so dramatic I thought he must be correct, so I went Googling to learn about the true cost of debt. People spend their entire lives studying heavy subjects like this. I gave it an hour.
That American, a former member of a Republican Cabinet and still a very relevant man, was probably on to something in the US where national debt stands at $22.71 trillion and the national gross domestic product is roughly $20 trillion. It’s not as though the debt has to be repaid and certainly not immediately because even though it sounds bad that it’s $67,000 for every man, woman and child living in the United States, about three quarters of that debt will be owed to the American people over an extended period of time in Medicare payments, notes and bonds.
The rich, for the time being, will continue to make money off the debt because as the US government continues to borrow, those who can invest in Treasury notes and bonds will earn interest. So, yes, it’s a formidable issue that will take its toll and probably cause taxes to increase because no politician likes to cut spending, though of course pundits say the best way to emerge from a debt crisis is the same way you emerge from a slow economy – governments jumpstart it with capital gains and infrastructure projects.
And that brings us right back to The Bahamas. National debt is not our greatest worry for those who look beyond the next election. Our greatest threat is and will continue to be climate change and the fastest way to tackle both is to spend the money necessary to prepare and to mitigate.
Zones that will be safe for aircraft 20 or 50 years from now, harbours that need to be beefed up, seawalls and bridges that need to be raised and solar, wind and hydro-power projects for New Providence as well as the solar project announced for Family Islands – all those projects will create untold jobs and net vast rewards far greater than the pronouncement of a balanced budget.
From an accounting view, The Bahamas is in far better condition than the US. Sure, our debt is high for a small nation, $8.2bn, but that is still under 65 percent of GDP.
This may sound like heresy. But the forward-looking leaders who take climate change as seriously as it needs to be taken and take courageous steps now to mitigate the impact will be the leaders whose legacy will matter.
When a picture is worth a thousand words and you can’t come up with any
It is hard to not to notice that a certain business in a highly trafficked area of East Bay Street has been operating al fresco in recent years.
The particular business, which happens to be where thousands of visitors pass on their way to the resorts and homes on Paradise Island, might best be described as a storefront minus the store.
Here’s what it does have instead – the latest in beachwear and cover-ups, bare tent frames, dangling bare bone mannequins and in the background, what appears to be an abandoned vehicle with a tarp of sorts. Business does seem to be a bit slow these days.