A home-made tragedy
September 14, 2011
Today's editorial entitled “The root of the problem” was excellent and neatly summarises the terrible financial situation which applies to Bermuda today.
May I also mention that two of your correspondents (“put Bermuda first” and “change is way overdue”) also wrote excellent letters yesterday but incorrectly stated that the Bermuda Government debt is around $1 billion.
May I correct them: the Bermuda Government debt is around $5 billion when one takes into account the amounts owing to two major Government pension funds, namely the social security fund and the public servants' fund. Government has been failing to pay in adequate sums to fund these pension funds with the result that future governments will have to make up the shortfall. This means taxpayers can expect higher taxes from lower incomes in the future.
The $5 billion does not take into account the future costs of promised government medical schemes which, to the best of my knowledge, have not been estimated. Metaphorically and financially speaking, we are at the bottom of the Great Sound with a lead chain attached to our legs.
How did we get into this fix?
A primary goal of the PLP Government when it came to power in 1998 was to reduce income inequality. Specifically, they wanted rich whites to pay more taxes for the benefit of poorer blacks. So how is the PLP inequality project working out?
Well, from reports in your newspaper the bulk of those queuing up for $25 free gas were black, as are the people who attend St John's Church free meals. What the PLP Government failed to understand is the law of unintended consequences.
Many international companies have exited Bermuda, staffs have been reduced, and jobs nixed. Many, if not most job losses arose, because of foolish PLP policies such as the six-year limit on work permits. When jobs are lost the main victims are black not white employees.
Politicians who put income redistribution at the top of their agenda hurt not the rich but the poor. This is a home-made tragedy not something that occurred in the USA.
Those who are broke or who have lost a job can blame a PLP Government that has punished everyone in Bermuda, but especially the poor. Instead of economic growth we have massive poverty for the first time in recent history.
Some redistribution of wealth.