Arising from the blog The Slide of the Barbados Economy: Pictures Are Worth a Thousand Numbers which utilized several graphs created by Economist Ryan Straughn, BU reached out to him via Facebook to get feedback on the several comments posted. Although he is not a fan of BU, to his credit, he offered the following perspective which provides food for thought.
I just spent the last 20 minutes wading through the post you sent. From what I gather from the contributions there seems to be a notion that either the data is corrupt or worse that I am corrupt. I can appreciate that a significant number of persons in Barbados genuinely don’t understand how the macroeconomy works in total and particularly how the public finances are affected or how it affects the system.
I must confess that I seldom read your blog because in my view it’s not a place for person truly seeking information and better understanding. I’m just a messenger but the message is in those charts for those who wishes to pay attention.
What is most unfortunate is that there is a 1-to-1 correspondence change in fiscal management and the change in government in 2008. I’m no psychologist but given that the electorate voted significantly for change there is a reluctance on their respective parts to accept responsibility for their own actions. Hence the questioning of data and of anyone that forces them to reflect on the choices they made. Further, this inhibits rational thinking and fosters inaction and all the while things are getting progressively worse because of it.
I saw a reference about bringing things to book and I smile every time I hear someone make reference to that. All public debt is recorded but what is admittedly messy is how it is classified. A few statutory corporations are able to service debt from their revenue and as such don’t require a transfer from central government to do such. It has been a longstanding debate amongst economic practitioners about how to classify public sector debt and particular that which central government is responsible for. Now government has a fiduciary responsibility for all public institutions and as such could be held responsible for all liabilities. My view is that once any institution is servicing debt on it own then that liability should be classified separately from central government. The long and short of it is that all debt however classified is recorded and provisions are made for its service. Therefore the notion of “bringing things to book” may score points amongst those who genuinely don’t understand how debt service works. As I said before, not enough people take the time to understand these things.
I’ll end by saying something as I said it to other economists very recently.
“There are times when you cannot keep your job and put alternative explanations for data on the table“.