Nothing short of child abuse – Bermuda Government-style
Readers may recall from The Royal Gazette of about two years ago the story of a Warwick resident who ran up a series of six-figure debts in the name of her four children — all of whom were under 12 years of age.
According to the records of the Supreme Court, Rebecca X from Warwick purchased, about four years ago, a $2.5 million home in Fairylands, taking out mortgages and loans in the name of her oldest child, who was aged 11. A few months later, she made a lesser purchase by buying a Mercedes car in the name of her nine-year-old.
In respect of the other two children, she was able to gain credit cards from two other Bermuda banks, using them to pay for a swimming pool, a weekly facial massage and some plastic surgery, which consisted of tummy tucks and breast enlargements. All were successful and expensive, but worth it to Rebecca.
Much to her credit, Rebecca also had a generous side. She bought an SUV for each of her three brothers, a Las Vegas vacation for her first cousin, and she gave each of ten old school friends $1,000 each for their birthdays. As a result of her generosity, she was popular with everyone, many of whom hoped to be the beneficiaries of her generosity.
Rebecca now has been charged with fraud and her case is awaiting prosecution in the Supreme Court, although her lawyer, a prominent member of the Bermuda Cabinet, maintains than she is innocent of all charges and has done nothing illegal.
Unfortunately, The Royal Gazette was unable to reach Rebecca for comment — mainly because she does not exist and the above story is a work of fiction.
Or is it? If the reader, and the voter, substitutes the Bermuda Government for Rebecca, they will find many examples of outrageous spending, much or all of which is charged to our children in the form of government debt.
How the Bermuda Government, in its wisdom, is handling our financial affairs is not significantly different to actions of the fictitious Rebecca. It is borrowing huge sums of money, spending it on vote-winning projects of little long-term value, and charging the costs to little children or to children yet to be born.
By huge sums, I don't mean a few hundred thousand dollars, but billions of them. At last count, the Bermuda Government debt was almost $3 billion, and when the unfunded pension obligations to civil servants, police officers, prison officers, teachers and nurses are taken into account, the amount is staggering, although the precise figures are unknown because actuarial valuations of most funds are years out of date.
However, it is safe to assume that at least another $3 billion should be added to the government debt. And I have not included an amount for unfunded medical costs because, to the best of my knowledge, no figures have been published by the Government. And no numbers are available to the proposed nationalisation of our healthcare system. But we do know the costs will be huge.
Now let's see: $3 billion documented debt, plus $3 billion pension debt amounts to $6 billion; divided by a population of 60,000 comes out at a figure of $100,000 per person living in Bermuda. Take away about 10,000 non-Bermudians, and another 10,000 people who are over 65 — like me — and probably yet another 5,000 who are under 16 or are unemployed, and we leave, at most, 35,000 people who will have to carry the financial burden of $6 billion.
That brings the share of debt of the economically active population to $240,000 per head. Do the maths, check my figures and read the numbers again — they are gravity-bending. And horrible.
What is being done in the name of the Bermuda public by the Bermuda Government is the creation and a legacy left to our children and grandchildren of generation-crushing, and economy-wrecking, unpayable debts. It will not be too long before government debt exceeds national GDP — if that amount has not been already reached. It is impossible to imagine what Bermuda will look like if such financial recklessness continues — but it won't be pretty.
During my business career, I was a trustee of several pension plans. If the trustees, including myself, had acted in the same way as the Government of Bermuda, we would have been indicted for fraud in the Supreme Court, convicted and sent to prison. The Bermuda Government is not held to the same high standards. Reckless financial management is considered to be sound politics.
Because the dollar amounts are so huge, and the subject of government debt is so abstract, it may help if the financial arguments are put in more personal terms.
At birth today, a Bermuda child enters a world where it owes almost a quarter of a million dollars as their share of government debt. What it will be like in 20 years when that child reaches adulthood is almost impossible to say, but it can be said with some confidence that today's adults and today's Bermuda Government are destroying the future of Bermuda's children. They are being robbed of their lives and future by unscrupulous politicians, and endorsed by indifferent voters. The leaders of Bermuda are acting like the leaders of a banana republic.
It was once a mark of a civilised society that adults worked hard to make the future of their children and grandchildren financially better and more secure than that which they themselves had experienced. The idea of leaving a massive debt for future generations was not only considered an act of financial irresponsibility but a moral dereliction and a breach of the biblical commandment that “thou shalt not steal”.
Financial responsibility, civilised behaviour, the Ten Commandments and morality are regarded by our politicians as old-fashioned; now it is progressive — and more fun — to follow a philosophy of let's party now, and send the bill to the babies. After all, there is nothing babies can do about it. And, besides, the voters do not care.
The attitude of the Bermuda Government is simply this: there is no problem here, all is well and we are wonderful people. The injunction of the Ten Commandments about stealing is stupid and old-fashioned, and fearmongering about the government debt is as fictitious as the Iraqi weapons of mass destruction a generation ago.
Alas, weapons of mass destruction might have been non-existent in Iraq, but the Bermuda Government debt is all too real and is all too destructive of the future.
The question is will it destroy the Bermuda we have all known? And when?
• Robert Stewart is the author of two books on the Bermuda economy