By Bob Stewart

I was one of the 500 people who attended a public meeting about the Spending & Government Efficiency (SAGE) Commission recommendations on October 8, but was not one of those who carried a placard or joined in the chanting.

I thought the Finance Minister, Bob Richards, handled the hostile crowd extraordinarily well, and provided the Bermuda public with a robust and well-argued case that the present Alice in Wonderland economics cannot continue for much longer.

Indeed, Mr Richards implicitly spelled out for Bermudians the commonsense first rule of economics namely,

1. -What cannot happen, will not happen.

2. -What must happen, will happen.

Just in case the reader is wondering what on earth am I speaking about, let me elaborate on the first rule, although I doubt if I can do it as well as the Finance Minister.

Over the past ten years or so, Bermuda has borrowed and spent money it did not have, and did not earn. It cannot continue to borrow otherwise we will shortly be in the position of the Island of Nauru in the South Pacific (more about this remote place later) where the government has run out of money and cannot, amongst other things, supply adequate electricity or operate its airline.

Lenders will not, and cannot, continue to lend to somewhere like Bermuda whose government is bankrupt — so what cannot happen, will not happen.

We will shortly run out of money; and as he said elsewhere money does not grow on trees.

It is the second rule that the Bermuda Public Services Union, and others, object to. Unless Bermuda closes up shop and we become a deserted island, we must bring our public spending under control.

A failure to do so will mean the end of the Bermuda as we know it.

The second rule of “what must happen will happen” means we either, through the democratic process, reduce government spending, or foreign creditors will compel us to do so by not lending.

There will be no money to pay policemen, teachers, civil servants, pensioners, creditors and everyone else

It is surely better to do things the right way whilst we have some time, rather than await collapse like Nauru.

The Finance Minister wants to do things the right way, the BPSU and the mindless chanters of slogans wishes to ignore reality and then express surprise when things collapse as they are doing in Nauru.

This brings me to Nauru, a small island of 10,000 souls, a tiny Pacific Island nation midway between Australia and Hawaii. If you like a Pacific equivalent of Bermuda that is further down the pike of being broke.

On page 48 of The Economist magazine dated October 4, it was reported that Mr David Adeang, the Finance Minister of Nauru, told the Australian Supreme Court that “the Republic of Nauru will cease to be able to operate” unless it gets more loans.

Nobody, understandably, wants to lend to that benighted island. At worst, the island will grind to halt with all the misery that that entails.

Mr Richards does not to be in the position of his opposite number in Nauru and leave Bermuda with no access to foreign credit. And right thinking members of Bermuda do not want us to be mindless copy-cats.

As Bob Richards said at the public meeting, and as The Royal Gazette reported “Doing nothing will lead us to ruin”.

He is absolutely right. And David Burt is talking total nonsense when he states government spending will solve our problems. The SAGE Commission reported a year ago and made many sensible recommendations and we either follow most of their suggestions or else we resurrect ourselves as the Nauru of the North Atlantic.

Many Bermuda voters, opposition politicians, trade unionists, and civil servants do not want to be awakened from their blissful financial dreams. They prefer to sleep on, and ignore the many obvious signs that we are in deep financial trouble.

Under the inept financial leadership of Paula Cox, Bermuda fell off a financial cliff in the early 21st century. More borrowing is out of the question as our debt is now $100,000 for each man, woman and child – several times that of Naura.

We have sleep-walked through a decade of economic incompetence. Mr Richards and the SAGE Commission has told us to wake up.

I look forward to placards saying “stop the financial rot”, and chants of “we must support the Finance Minister”.

•Bob Stewart is the author of the book A Guide to the Economy of Bermuda.