A Problem of Debt
During the just concluded 2016 Estimates Debate former Prime Minister Pwen Arthur in one of a few intelligent interventions shared his perspective on the debt problem. It is no secret Barbados has achieved the ‘ranking’ of one of the highest public debt to GDP countries in the world. In the study- Public Sector Debt in the Caribbean: An Agenda for Reduction and Sustainability published by the Caribbean Development (16 Sep 2015) Barbados, St. Kitts and Nevis, Jamaica, and Grenada – are ranked in the top five – all greater than 100%.
Here is a short video shared with BU that summarizes our plight in simple language.
Barbados Underground 
A search of CDB’s website throws up several interesting publications on the subject of debt:
http://www.caribank.org/?s=caribbean+debt
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We day stop being partisan about how we allocate and spend tax dollars is the day politicians on both sides will get the message. In the early 90s Sandiford trimmed the public sector/cut salaries, when Arthur assumed office the number ballooned and the status quo reverted, the excuse the economy was growing therefore we needed the resources. The idea that we should make our public sector more efficient by improving systems appear not to have been a consideration. The stupidity of our system reached a zenith when the Thompson and Stuart administrations assumed office at a challenging time and continues the trend of spend and reckless hire. The political parties select the ‘jobs’ to farm out to the friends and keep those that are not attractive as revenue earners.
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Spending land as money with no return ,free and taken for side pocket payouts and not for the public good, While taxes and vat are launders as Acquired Lands , with no records of clear title deeds or shown payments to the owners , In the name of taking the VAT and TAXES for self, Ministers and Lawyers got the ball rolling, Focus on the land and see all things.Better learn to ask Questions to MIA and Owen , Sir Richard and Sir COW,and why is the DLP covering up these crimes?,By the COP fraud Squad, Numbers dont lie, just the People in charge of the Numbers,Are we smarter than a 5th grader ?
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The video is BANG on point.
It can only be something in the water that we are drinking that explains the complete level of STUPIDITY being demonstrated – not only by our politicians, but by MOST citizens – who quietly go along with the idiocy.
It is PARTICULARLY stupid in a country like Barbados, where for 400 years our ancestors were enslaved by a military and economic system called the plantocracy. One would think that our relatively new BLACK leadership would be especially sensitive about giving similar control of our future back to the descendants of the former slaveholders….
But…
A close look at the faces of our leaders would show (to the discerning) the nature of the CURSE under which we are trapped….
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@Bush Tea
We are sensitive about some things. We need to borrow from what Trump and Sanders have been able to do in the USA – appeal to the youth and others who otherwise been disengage.
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@David ” Sandiford trimmed the public sector/cut salaries,”
And got vilified and voted out.
Bajans do not want to make sacrifices to effect meaningful change.
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@ David
Hants has hit the nail on the head.
The people want freeness without productivity. That means spending someone else’s money.
When you spend other people’s money you become their slave…. It is basic common sense.
Sandiford was the worse man in the world because he had this ‘ridiculous idea’ about living within your means ..and (probably most notably) because he had a habit of avoiding the bribe-masters’ cocktail traps and glittery temptations.
A people ALWAYS get exactly what they deserve….
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The REAL challenge of leadership in the twenty-first century is one of mass communication, mass-education and change-management. It is a job for top class brains, self-confident, accomplished MEN (with big balls), and visionaries who can see way down the road…
Instead, we are saddled with losers who could not even hold down a normal job to support their own damn family; whose idea of a vision is a nightmare; and to whom ‘change-management’ is about dispensing with one-cent pieces.
What the hell do you expect….?
Take education…
Instead of creating a national competition to encourage science students to come up with innovative ways to implement drone technology to solve national problems, our government bans the technology because some idiot presumably wanted to see if there was actually anyone ‘working’ in the army…? …and what exactly they did for the $50M per year…
Who knows if a young ‘William Skinner’ type would invent a machine that could eliminate drownings by responding within one minute to take a line and float out to swimmers in trouble…?
In Barbados, ignorance IS bliss….
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First one has to educate the young, the older citizens are too set in their ways and comfortable being stupid, that politicians are their employees, it’s their given right to vote for either political party or individual politician BUT, there is nothing in the constitution that says voters have to blindly follow, pimp for or become yardfowls for any politicians….you are the politicians’ employers, do you see your employer following you, pimping for your or yardfowling for you…..I dont think so, treat the politicians like your employees, that is what they are, watch them, monitor them at all times, hold them accountable and fire them when they are corrupt and do not perform competently as employees should….get rid of the emotional idiocy of being followers and party faithfuls, it’s destructive, be clinical when accessing politicians and their actions.
The country is your busines, the politicians are employees in your business.
If the electorate can understand that message, there will be no idiots like AC and Alvin trolling around spewing rubbish.
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And…that abrupt turn around and change will see a better calibre of politicians presenting themselves to serve the people and not themselves, there will be no yardfowls to stagnate growth, creativity or innovation, politicians will have to start using their brains to be reelected, no yardfowls or accumulating yardfowls to guarantee reelection 5 years down the road, there will be no guarantees….reelection will be based on performance.
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@Bush Tea
The Greek syndrome?
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Chris Sinckler ADMITTED on Brass Tacks this morning that Mottley’s allegations were true, but he could not recall at that time if Cabinet made a decision to increase the NIS board members’ stipends.
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@ WW&C
RE: Your 9:58 AM post
If our school teachers could inculcate that attitude in their students it would go a long way to addressing our problems.
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Is everybody listening to this LIAR on BT?
This man can lie, you hear! He got up and catgorically denied wht Mia was saying and now saying he was not here, he was attending a IMF meeting…………..so if that is so, why did he categorically deny what MAM was saying?
These people think we are fools!
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What a poor reason for justifying raising NIS directors’ fees by 200% at a time when they have denied poor workers at the airport a 3.5% increase.
I hope these poor Barbadians do not still believe that the DLP is a party for poor people. These dems are are for the upper class and three white men.
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@Well Well, How about you running for office? At the moment with our electoral system, everyone is voted for as an individual, not a member of a political party. So you would be just …Project yourself enough and get voters for. Get more votes than any of your opponents and you will be a member of parliaMENT..INDEPENDENT AND FREE TO EXPOSE WHATEVER POLITICIAN CORRUPT OR OTHERWISE. HOW ABOUT JOINING GRENVILLE, CASWELL, WALTER ET AL. EVEEN BUSHIE, IF HE WANTS TO PUT HIS HAT IN THE RING.
WAITING FOR YOUR ANSWER.
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Chris yuh lie…………..were you not transferring millions to the NHC when Michael Lashley was the minister and never broght the details to the House?
The truth only got out when the Auditor General filed his report.
This man is a bad nasty liar!
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@ Artax
Stinkliar has perfected the art of belligerent bullshitting….
It baffles brass bowls…
Imagine that, in effect, the joker has admitted to, while holding the post of MoF, CATEGORICALLY admitting to ignorance on a matter of government spending.
If you DON’T KNOW something …then ASK!!! …or at least HUSH!!!
One has to wonder …in how many other areas he has employed belligerence in place of knowledge in making national financial decisions…. CAHILL comes to mind.
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Bush Tea March 21, 2016 at 12:01 PM #
“Imagine that, in effect, the joker has admitted to, while holding the post of MoF, CATEGORICALLY admitting to ignorance on a matter of government spending. If you DON’T KNOW something …then ASK!!! …or at least HUSH!!!”
@ Bushie
But Sinckler mentioned he ASKED 3 of his colleagues, ALL of whom said they COULD NOT RECALL either.
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Artax
This is why he should not have jumped up twice and categorically deny what MAM was saying.
This only shows how ignorant he is and immature to boot. For him, politics is a blood sport at which he must always be the big bad bully who thinks he should win at all costs.
I wish Ellis would ask him why he and his government chose to pay CLICO 55 million dollars for that building on Collymore Rock.
Eight years on and they are still in a learing mode………….and arrogant with it at that.
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Alvin dahling…I prefer sit on the sidelines and expose ya’ll…I can see more from this vantage position and it’s a hell of a lot more fun…lol
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Sinckler as minister if finance, has to sign off and approve expenditures, incliuding raise in salaries
He is lying, again..
See why I like this vantage poibt Alvin…very few lies gets pass me.
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*Point
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Old Baje…that education should be made mandatory from secondary schools, before the children start regurgitating the nonsense re politics, politicians and yardfowlism, they hear their parents speak about, which successfully keeps the cycle of ignorance in place….that strengthens and embold corrupt politicians
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The MoF also missed the question by MAM. Make baseline info public. This will never happen of course.
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The MoF stated this morning the government has to reduce its deficit by about $200 million dollars. How will this be possible with a general election on the horizon?
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I also heard during the discussion in Parliament on the said matter after Chris stating that he had no knoweldge of the proposed increased. Mia replying by stating that the allegation was not meant towards Chris.
Then question is why would Mia acknoweldge in Parliament that the allegation was not towards Chris after Chris denial then use grandstanding politics as evidence
It just might be as Chris stated he was not included in the discussion
In any case the bottom line would be if there was a final agreement that he had approved.
But then the Blp like drowning men need every available life raft
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More verbal gymnastics…. If that was the case, then Sinckler did not have any reason to admit in a public forum that Mottley was indeed correct.
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Art and Prodical, re: Sinckler’s response to the NIS issue – I keep reiterating that the people should not only hold these people accountable for their dishonest actions but we (the people) should take drastic measures and hold these offices hostage.
How can you get away with a response like that? – Liar needs to be behind bars!!! Mind you; it begs to question what other funds are being moved around illegally.
Thanks Mia – THE PEOPLE NEEDS TO KNOW, what is going on with their money.
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AC…ya lie.
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the question being was Mia correct on the allegation or was she correct in stating that Chris had knoweldge of the agreement
From what Chris said in parliament and now supported by a clarification by his response via media Mia still has not proven that Sinckler was privy to the agreement all she has done is started another fire with hope that it would be enough to give her enough electoral support to win the next election which is not gonna happen.
Now the BLP operatives can say he lie all u want but in the meanwhile tell Mia that she has to show more evidence that Chris participated in the drafting of the document ,, Also while she is digging bring proof of her LEC certification
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When government employees begin to leak government documents…..it is clear evidence that the workers have had enough of the lies and deceit. It is clear that they are fed up with these ministers.
They did it to OSA and it seems as if they are so fed up of these incompetent dems just like most Barbadians.
It is passing strange that the person who gave the dead lying king the file from the MTW on the SSS project is now a big BLP supporter.
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@ David March 21, 2016 at 12:36 PM
“The MoF stated this morning the government has to reduce its deficit by about $200 million dollars. How will this be possible with a general election on the horizon?”
The same MoF has been making the same call since December 2013 when he announced the laying off of thousands of workers from the public sector. The guv of the CB has also been calling for similar measures since October 2013.
Everybody knows where that $200 million leakage lies. Right in the transfers to the myriad statutory corporation and other superfluously unproductive bodies including some right in the central government army of occupation like NISE and the Productivity Council.
The challenge is when will the MoF fulfill his oft stated and long overdue promise of restructuring the statutory corporations. Wasn’t a report on this exercise promised since December 2013?
“Additionally Mr. Speaker, earlier this year, the Ministry of Finance formally requested technical assistance from the IMF’s Fiscal Affairs Department in two critical areas of government’s operations: Tax administration, and fiscal/operational reform in the key statutory entities which rely on central government for large transfers for their operations.
For some time now most internal and external examiners have expressed deep concerns about both of these areas as key examples of parts of government’s operations which exhibit unacceptable levels of inefficiency and dis-functionality resulting increasing financial burdens to the state.
I am happy to announce that the Fund has accepted the requests and starting next month, the first team will begin its examination of the fiscal and operational challenges of some of our key statutory entities.
In anticipation of that and in an effort to advance and concretize this work, the Ministry of Finance will assemble a high level task force of senior finance, business and accounting experts to work along with the Fund’s team to finalize a reform agenda for the selected entities to be presented to the Minister before mid-year.”
Now how long is too long from July 2014?? The MoF wants to get to fiscal heaven but is unable to pay the price for the trip.
The MoF is just one big arrogant disrespectful incompetent whose greatest asset is manifested in his outstanding capacity to lie, bluff and bullshit.
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AC you are political yard-fowl jackasses. Your comments CLEARLY INDICATE that you DID NOT LISTEN to Sinckler’s RESPONSE on Brass Tacks.
You are trying to “spin the issue” by writing that Mottley IMPLIED Sinckler “participated in the drafting of the document,” when that was never the “bone of contention.”
Sinckler called “Brass Tacks” this morning to ADMIT he “was privy to the agreement” since it was a cabinet decision, and as such, Mottley was CORRECT.
When questioned by Ellis about Sinckler about his statement re: “I can categorically deny that I have any knowledge of, or information pertaining to any such matter between the Minister of Labour and the National Insurance,” he said he COULD NOT RECALL the CABINET DECISION at the TIME Mottley made the reference in parliament and “categorically denied knowledge” of the event after consulting 3 of his colleagues, who said they could not remember either.
Sinckler further stated that, after SEEING the DOCUMENT in print media, it PROMPTED him to REVIEW his NOTES, which more or less “jogged his memory,” and he went on to described and explain the events/circumstances which led to the recommendation of an increase of the NI board stipends.
Additionally, he said that he did not set out to “mislead the house,” as suggested by Mottley, it was just a case of him NOT BEING ABLE to REMEMBER (recall) at the time. Pure political grandstanding to “sugar coat” he told a lie in parliament.
He repeated to Ellis on MORE THAN FOUR OCCASIONS that he DEFINITELY HAD KNOWLEDGE of the recommendation and Mottley was correct in her allegations.
Sinckler subsequently APOLOGIZED, which caused Ellis to say he admired him for being man enough to come to the public and admit he was wrong.
Look, the man admitted in a public forum that he was wrong and Mottley was correct, and you have now decided to jump into the fray trying to convince BU otherwise.
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The only thing holding Sinkler together right now is the knowledge that he will leave politics as a very rich man.
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millertheanunnaki March 21, 2016 at 6:25 PM #
“Everybody knows where that $200 million leakage lies. Right in the transfers to the myriad statutory corporation and other superfluously unproductive bodies including some right in the central government army of occupation like NISE and the Productivity Council.”
@ Miller
You seem to forget that those statutory corporations are used by politicians from both BLP and DLP to give constituents jobs in exchange for their votes.
It is a known fact that the Transport Board has recently recruited a number of bus drivers, none of whom were among those retrenched in 2014, which clearly contravened the agreement made between the union and TB.
You have the Urban and Rural Development Commissions both undertaking similar activities. But both Commissions will be valuable assets leading up the 2018 elections, since resources will be allocated to repairing and constructing houses to solicit votes. Case in point, recently, Steve Blackett was seen parading in the media handing keys to individuals in his constituency.
Then there is the National Assistance Board, which is OVERSTAFFED. Could you imagine that a board with a reduced service load has SIX clerks in the Accounts Section? Then there is a matter of an excess of 80 Home Helpers on the payroll.
All you have to do is to read the Auditor General’s reports for the past five financial years to avail yourself of the wastage and hiring practices of these statutory agencies.
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Arthur’s point he made last week about the debt is relevant. This government must consider very carefully the ROI of all significant capital projects signed off. Contracting debt or engaging in projects likely to fail and have to be bailed by government will have implications for our children’s children.
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@ Artax March 21, 2016 at 6:35 PM
“Look, the man admitted in a public forum that he was wrong and Mottley was correct, and you have now decided to jump into the fray trying to convince BU otherwise.”
That consortium of “acs” has sold its soul to the devil called the dangerous lying party (dlp).
We are just waiting with bated breath to see how that hen of a supreme yard-fowl metamorphoses into a shameful weathercock in servile volte-face support of Stinkliar’s planned privatization programme in his Quixotic quest to reduce the self-made fiscal deficit.
Only a programme of political euthanasia can save Barbados from fiscal meltdown.
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@ARTAX,
WHAT IS THE ROLE of Home Helpers?
@Well Well,
CHICKEN!!! I KNEW THAT WOULD BE YOUR ANSWER.WANT TO EAT THE FOOD AND SAY HOW BAD IT TASTE, BUT DON’T (CAN’T) TRY YOUR HAND AT COOKING.
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miller,
Someone said in the VOBchat today that the reason why the government cannot cut the public sector to achieve the savings that it wants is that they have already sent home all the Bees.
So any further staff cuts would have to be Dees…….any you done know that they are not going to touch their supporters!
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The solution to all these problems might by politically difficult. However, a plan like the following would bring the deficit down. Believe me.
1.
– shrink the number of ministries to 10
– close 50 % of all embassies and missions around the globe
– release 20 % of public servants to the free market
– stop hiring public servants for at least 5 years
– lower pensions in public service by 10 %
– lower basic salaries in public service by 20 %, the remaining 20 % are paid by performance
– extend the working hours of public servants
– join Court of Appeal and High Court to one judicial body and reduce the number of judges by 30 %
– close less important faculties at UWI, except medicine, law and economics
privatize most of statutory bodies
– shut down the most disastrous bodies like NHC
Teach leadership, integrity and transparency in schools, at UWI and public service.
Enact bills on integrity and transparency and ENFORCE them.
Attract the right type of foreign investors
– do research on personal and monetary background, including criminal records
– the business model must be self-sustaining, that is NO tax exemptions after opening of hotels etc.
– do active search for investors in North America, Europe and Asia
– pamper reliable and trustworthy foreign investors
Make Barbados great again!
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and
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…collapse the Senate and Lower House, disperse the BDF.
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It is important for individuals on this thread to be careful about what they say on this subject of debt.
First of all, the video clip should be taken with a few grains of salt: A country is not a household, and it should not be managed as such. In a country, one man’s spending creates income for another man, so there are many more situations when spending is good for the country than would be the case for a household. When a household spends, the money spent is usually “lost” to others.
Second of all, we should understand the composition of debt. Not all debt is the same. If a government borrows from its own people (domestic debt), it has more financial flexibility than if it borrows from foreign banks or other foreign private sector lenders. Domestic debt is money a country owes to itself, and the obligations of the government are assets on the bank statements of banks and private investors.
My understanding is that the majority of Barbados’ debt is domestic debt, so we are not as crippled as the headline numbers might suggest.
Any economists want to weigh in on these comments?
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Chadddddd 9999999999
Whey you been my man?
Welcome back
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@chad9999
Are you attempting to be unnecessarily provocative? Did you not get the point the man made using a simple explantation? We have to learn to spend what we earn read carry a balanced budget.
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@ chad99999 March 21, 2016 at 7:48 PM
“When a household spends, the money spent is usually “lost” to others.”
You should rephrase that statement.
The ‘spending’ by households is income to others including the government in the form of indirect taxation e.g. VAT.
The same way blood circulates through the human body to sustain life so too does money or its equivalent in order to maintain economic activity.
It’s the quality of that analogical blood that makes the difference to the quality of life or health of the person, whether biological or economic.
“My understanding is that the majority of Barbados’ debt is domestic debt, so we are not as crippled as the headline numbers might suggest.”
That might be all fine and good when the debt is held mostly by local lenders (bond holders). But it can only be sustained in the long run when you control the value of your own currency and can print money at will as with the case of the USA.
If Barbados was earning forex at a much faster pace than spending it your argument would be a solid as your bottom dollar bill.
It is precisely because the local debt is so large that a haircut is required. In the absence of a growing economy providing a wider transactional tax base to meet the serving of the local debt the only way to reduce that debt is to make an adjustment to the currency peg with a concomitant ‘adjustment’ in the real value of the local paper debt.
The mounting pressures on the country’s sliding foreign reserves would offer the perfect opportunity to exercise that much needed haircut.
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@David
You are wrong. We do not need a balanced budget if borrowing is cheap (i.e., interest rates are low) and we have profitable projects to invest in. I borrowed money from my Mom to go to graduate school. That loan led to a better life. The problems arise from wasted funds and unprofitable projects. But if Barbados borrows to improve its human capital or certain parts of its infrastructure, that is good.
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@ millertheanunnaki March 21, 2016 at 8:20 PM
“transactional tax base to meet the serving of the local debt ”
That should be the ‘servicing’ of the local debt.
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@chad9999
And you have not factored we a re a nation of imports supported by conspicuous consumption? How will deficit financing and high domestic borrowing pressure the peg?
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@millertheanunnaki
My point to David is that when one member of a household spends, the money is usually lost to the household. So households have to watch their spending, and can only borrow for wise investments with long term payoffs over many years (e.g., building a house, or financing a university education).
As for escaping the burden of too much domestic debt, don’t you agree that the “solution” is to raise taxes and user fees? Unfortunately, the pampered middle class do not want to hear this.
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@chad9999
You are correct about a fat and lazy middle-class.
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@ chad99999 March 21, 2016 at 8:23 PM
“The problems arise from wasted funds and unprofitable projects. But if Barbados borrows to improve its human capital or certain parts of its infrastructure, that is good.”
So what’s new about what you are saying?
Barbados has been borrowing since Independence and so far has been able to repay. Nothing is wrong with that.
What is worrying and cause for major concern is when you borrow to finance conspicuous consumption of foreign made goods and services with no corresponding assets either in the form of physical infrastructure or human capital with ‘measurable’ social returns like a healthier citizenry who does not despoil the environment.
Can you say the borrowing that has taken place over the last 8 years meet the criteria of commonsense other than political deceit of claiming it was done to payoff the debt incurred by the previous administration?
Doesn’t each loan have to be matched by a mandatory repayment provision call a sinking fund?
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@ chad99999 March 21, 2016 at 8:33 PM
“As for escaping the burden of too much domestic debt, don’t you agree that the “solution” is to raise taxes and user fees? Unfortunately, the pampered middle class do not want to hear this.”
Isn’t that ‘solution’ a kind of Catch 22 situation?
Who do you think has been carrying the tax burden? Taxes in whichever form are passed on to final consumers. Businesses are just tax collecting agencies.
The problem with Barbados is one of living above its means on other people’s money (not punching above its weight as it used to like to brag about).
The solution (or even partial) is not to increase taxes but to ‘force’ more people and indeed businesses to be more efficient through the reduction of the State as the major provider and allocator of goods and services thereby encouraging ‘private’ citizens, corporate or otherwise to enter the market place to fill the gap left by the withdrawal of the State.
Parasitic Barbadians need to experience the necessity of earning their living by producing goods and services foreigners would wish to buy in order for Bajans to maintain their ‘sweet’ life.
As the donkey told the fat pig while being transported to the market: “Sweet Life is Not Long Life”.
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“Pampered middle class” – please!! The middle class are the ones tax to death. Since Froon accidentally became PM, the middle class are now the working poor. I am not in agreement of blaming the middle class for this piss poor government financial errors.
Politicians and business men like PH can eat steak and wine and dine on Caviar almost everyday of the week, drive the latest cars and shop in Milan. Get fat on bills- Stupse!!
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@millertheanunnaki
I agree with you that somebody has to pay the bill for the excessive non-productive consumption and weak working ethic during the last decade.
I also agree that the next gov. will go the path of least resistance, that is devaluation and/or haircut for local creditors. They will have no other choice, since nobody will borrow Bim any foreign currency.
Public debts are good, if you get credit for free or very, very low interest and invest it into infrastructure etc pp, but not, if it is done to pay for the holiday of public servants and for 10 % interest per year. Even a three year old child gets a better loan than this in North America or Europe.
However, the present gov. will not act on this issue anymore. Two more years are lost with vagabondish infrastructure, without growth, childish promises, politicians shouting like trolls and stories about nepotism in public life.
We need a leader who tells the citizens on TV: During the last ten years, you folks consumed above weight. Party is over. Face the reality that Barbados is now on the economic level of Jamaica and some African nations.
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Alvin Cummins March 21, 2016 at 7:16 PM #
“@ARTAX: WHAT IS THE ROLE of Home Helpers?”
@ Alvin Cummins
“As currently instituted, the Home Help Programme ensures that older persons have their needs met in the environs of their homes and are able to interact directly with their care provider and maintain community contact.”
So what is your point? However, before you answer, perhaps you should avail yourself to the following information which was taken from the 2014 Auditor general’s Report:
6.123 Based on an assessment of the staff complement of the NAB, these FIFTY (50) ADDITIONAL POSTS of Home Helper have been CREATED WITHOUT the PERMISSION of the Ministry of Civil Service. The National Assistance Board was able to finance these positions by requesting, through its parent Ministry, increased funding for substitutes in the estimates of expenditure and this funding was provided by the Ministry of Finance.
Conclusion
6.124 Cabinet decisions set the policy direction of the Government on matters, and state agencies are expected to carry out those decisions. The National Assistance Board EMPLOYED MORE PERSONS that it WAS AUTHORIZED to, by retaining persons in posts that should have been transferred at the closure of its Housing Programme as directed by the Cabinet. It also did not follow the Ministry of the Civil Service is guidelines for creating new posts but UNILATERALLY INCREASED its STAFF COMPLEMENT. Consequently, the Board EXCEEDED its ALLOTTED STAFF COMPLEMENT by FIFTY-THREE (53) posts.
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Barbados should never devalue the currency. The result would be inflation and financial ruin for pensioners.
We also need to extract as much as we can from tourists, especially since our marketing agencies have spent heavily to build up our image as an elite destination for rich Europeans and Canadians. Our tourism objectives are best served by keeping the value of the Barbados dollar exactly as it is now.
That is why I say the best way to reduce debt and curtail conspicuous consumption by the pampered classes in Barbados is to raise income taxes, sales taxes and excise taxes on luxury goods, including cars, wine and tobacco products.
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How does this work Chad?
When someone demonstrates that yours is a simplistic and mistaken view …are you gonna disappear from the blog again…?
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The Barbados dollar is pegged to the US dollar.As a result Barbados experiences fluctuations in its currency value in synch with the movement of the US dollar.I posit the view therefore that the US dollar should be the currency of the realm,in Barbados.
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Alvin…I am not, nor was I ever politically inclined….a requirement of being a politician is, you have to lie continuously, even if a lie is not required and the truth will suffice, so too being a yardfowl requires constant lying, deceit and pretense….I was never good at blurting out lies when it’s much easier and less complicated to tell the truth.
So, I will never qualify either as a politician or yardfowl…ya have to blurt out too many lies like if ya afflicted with Tourettes Syndrome…that is not my cup of tea…I like to remember the last words I said.
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chad99999 made some very valuable comments, especially as it relates to incurring debt for productive and unproductive purposes.
Whereas debt incurred for capital investment generates cumulative employment and income growth with minimal debt growth; debt for consumption generates compounding debt growth with minimal employment and income growth.
However, we have not examined the long term fiscal imbalances of islands with small open economies, such as Barbados, arising, for example, as a result of an aging population (i.e. unfunded liabilities arising from aging).
It is a known fact that Barbados’ has an aging population. The current expansionary fiscal policy has coincided with rising, and largely unfunded, age-related spending, including health care costs (QEH, polyclinics, psychiatric care, district hospitals and government owned and government subsidized retirement homes), social services provided by agencies such as Welfare Department, National Assistance Board, Poverty Alleviation Fund, the Urban and Rural Development Commissions.
This rapidly aging population presents Barbados with the prospect of increased future costs that are not entirely recognised in current budget projections. For example, there has been a significant increase in the abandonment of senior citizens at both the general and district hospitals; their upkeep has to be undertaken by the state. Also, there are several individuals who have not properly prepared themselves for retirement, and will often depend on the state for financial and other support. These factors, as well as the services that are already being provided by government, will ultimately incur additional costs/debt to the tax payers of this country.
Although debt arising from the above examples may be categorized as “debt for consumption purposes,” it is inevitable because funds are not readily available to pay for these pre-existing obligations.
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@Gabriel
if you visit any local Realtor site, you will note ALL the prices are already in $US.
@chad 999999999
the majority of the newer debt is mostly local, not all. This actually restricts the island, because, while sovereign debt is unsecured, and foreign debt holders would walk away with their tails between their legs in the case of insolvency, it would render local lenders similarly insolvent (read the NIS et al)
The @Tron proposal is popularly called “austerity”.
The greater issue is when debt reaches current levels, and given the revenue vs expense projections, even if one was to ignore all debt payments, both servicing costs and and principal repayments, chances are, one is still in deficit, though closer to balancing.
Cutting expenses is never politically desirable.
Have you ever met a hard core gambler? The mentality is tomorrow will be his/her day, this bad luck streak must end. This unfortunately is how the current group played the game…the international economy must improve, and that will lead to increased tourist and offshore business and growth elsewhere. That will lead to increased revenue which will cover rising costs. What has happened is the costs have risen faster than estimated, with minimal growth in revenue. The gov’t has found itself picking up most of the slack.
The double whammie, which Greece faced, is even when they instituted austerity as per Tron’s suggestion, they still couldn’t balance the budget, so the debt kept growing. So enter some novice, who convinced the population he could scrap austerity and return Greece to greatness. We have seen he was a dreamer.
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Thank you NorthernObserver
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@ NorthernObserver
Spot on analysis.
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Debt, even for productive purposes, should be a last resort that is utilised with great care, and should be liquidated with utmost alacrity.
Friendly, low cost loans such as international development support (and loans from Mom for university) are attractive ways to accelerate development, but even these should be strategic in nature and repaid promptly.
Any damn child still heavily indebted to Mom fifty years after ‘independence’ needs to have their ass kicked ..and their assets seized…. Such ‘beneficiaries’ should, by that time, be assisting THEIR OWN children and grands with developmental loans…. not borrowing from Mommy… and CERTAINLY not borrowing from Credit Cards or Easy Cash….
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@chad99999
Bdos is overtaxed and you want to imposed more taxes
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@chad99999
Bdos is overtaxed and you want to impose more taxes
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Never thought the day would come in Barbados when some would be debating the merits of deficit financing. The reality of it all came home recently when the government and cohorts were bleating gleefully about the concessionary rate received on a loan from China to construct Sam Lords Castle.
>
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“Sinckler subsequently APOLOGIZED, which caused Ellis to say he admired him for being man enough to come to the public and admit he was wrong.
Look, the man admitted in a public forum that he was wrong and Mottley was correct, and you have now decided to jump into the fray trying to convince BU otherwise.”
I do not know what in Mr Sinckler’s action could cause admiration from Mr Ellis when Mr Sinckler categorically denied on the floor of Parliament knowledge of the increase of which he was a part and only apologized when a document was circulated categorically proving that he had lied.
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.”124 Cabinet decisions set the policy direction of the Government on matters, and state agencies are expected to carry out those decisions. The National Assistance Board EMPLOYED MORE PERSONS that it WAS AUTHORIZED to, by retaining persons in posts that should have been transferred at the closure of its Housing Programme as directed by the Cabinet. It also did not follow the Ministry of the Civil Service is guidelines for creating new posts but UNILATERALLY INCREASED its STAFF COMPLEMENT. Consequently, the Board EXCEEDED its ALLOTTED STAFF COMPLEMENT by FIFTY-THREE (53) posts.”
And by how many votes did Mr Blackett win ? It is ironic that this padding of the employment register occurred around election time. Vote buying it seems in a different form.
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Lol…thank heavens for Mom…
There are too many pimps for journalists on the island…real journalists are not political pimps.
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More terrorists’ attacks in the heart of Europe . Brussels the seat of the EU is under siege.
The ISIS soldiers have really left the Trojan horse and well ensconced in the cities of Europe.
Expect a massive right wing reaction that can lead to civil unrest along racial/religious lines leading to further economic dislocation.
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@ Miller
Expect a massive right wing reaction that can lead to civil unrest along racial/religious lines leading to further economic dislocation.
++++++++++++++++++++++++++++++
You are given to understatements today aren’t you….?
…Expect significantly increased restrictions on international travel (read REDUCED tourism)…
…Expect a new hard line on the mass movements of immigrants into Europe… perhaps even mass deportations – causing even more resentment…
…Expect a tightening of borders…
The temperature is rising at ALL levels, but of course there are those of us who will argue that “least-squares linear regression trends” show that we have not really gotten any worse… 🙂
A top Bushman once said…
“When you see a cloud coming in from the west, you immediately say, ‘There’s going to be a storm,’ and that’s what happens. When you see a south wind blowing, you say, ‘It’s going to be hot,’ and so it is. You hypocrites! (b bowls 🙂 ) You know how to interpret the appearance of the earth and the sky, yet you don’t know how to interpret the present time?”
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Lol…good one Bushman.
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After Brussels: Trump is rising. Blitzkrieg in America.
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Trump is a slimy opportunist, he is shameless and will use any excuse to create strife for those whom he hates.
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Forget not that Trump is German and fancies himself another Hitlerite whipping up the
Wasp working class with the Hitler salute and Hitler pledge.In place of the moustache,there is the hairstyle.
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Tony Best in New York sums it up quite nicely, in this excerpt taken from his article.
“But the message from Wall Street was clear. “The problem is that we still have not brought the fiscal deficit down to a level that people [on Wall Street] are comfortable with,” observed the Governor
The bottom line is that Barbados is far from being out of the woods and will not emerge from its economic troubles unless and until the Government tackles the deficit head-on. That would mean carrying out the restructuring of state enterprises, reducing the waste and boosting efficiency, all promises the Government made a few years ago but did not complete.
What’s clear from all of this is that Barbados is far being out of the economic woods. Too many Cabinet ministers and others are wasting time talking about what they inherited from the previous administration instead of solving the problems on their plates in 2016.
They often ignore that after eight years in office, they can’t hold onto what they found in 2008 as a reason why today’s challenges exist. The political “statute of limitations” has run out on the things they may have inherited.
See more at: http://www.nationnews.com/nationnews/news/79200/headlines-worrell-york-update-economy#sthash.EdGlfw8V.dpuf
Ha-ha….ha
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You didn’t include my favourite comment by the CBB Gov…..”We are not a tax haven. We do not exist to enable people to avoid paying taxes in Canada or wherever activity originates.” The Canadian people certainly do not see things that way?
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