Bermuda’s debt is costing you $280 a month
Most of us are aware that the Bermuda Government debt is a massive burden on the country — but it is all too easy to think of it as a Government problem, rather than our problem.
While the debt takes centre stage at Budget time, it tends to retreat to the shadows as an uncomfortable reality that few want to discuss for the remainder of the year. And it keeps on growing.
We at The Royal Gazette would like to keep this issue front and centre as we believe the national debt’s continuing upward trajectory constitutes a threat to our quality of life, our children’s future and the very viability of this country.
With this in mind, we intend to keep track of what the debt is costing every Bermudian man, woman and child as the fiscal year that started on April 1 progresses.
The total debt outstanding, which stood at $2.185 billion at the end of March is expected to rise to $2.31 billion by the end of March 2016, as Government will be going to the capital markets to borrow a further $125 million at some point this year.
The cost of servicing the debt during that time will be $169.9 million — $117.6 million in interest payments, as well as a $52.3 million contribution to the Sinking Fund, which will go towards paying off principal. The graphic spells out what that means — every Bermudian man, woman and child’s share of the debt servicing cost was about $280 during April, the first month of the fiscal year.
After each month, we will insert a graphic in the Business section as a reminder of what the debt is costing us. The downgrade of Bermuda’s sovereign credit rating by Standard & Poor’s this week means Bermuda will have to pay our creditors a higher rate of interest when we borrow more money or roll over our existing debt. It’s an unsustainable trend that has to be reversed.
So we make no apology for trying to keep it in the spotlight and encouraging the whole community to apply pressure for a solution to be sought — and to understand that sacrifices will have to be made to deal with the debt scourge.