College Lecturer Warns of Civil Servants Cuts
Speaking at Terry Lister’s Town Hall meeting at St James’s Church Hall last night [Sept 24], Bermuda College Economics professor Craig Simmons warned of Civil Service cuts to come.
He said that Government’s large debt and general finances problems were such that cuts would have to be made to the Civil Service in order for Government to reduce its current high level of government spending relative to government revenue.
In a colourful warning to Bermudians, Simmons, the Bermuda College’s lecturer on Economics and a respected voice in Bermuda’s business and academic community, said: “Don’t expect government to deliver Zion. Bermudians must grow up and when politicians make promises, must learn to ask; how will you pay for it?”
Speaking on general financial management, Simmons said that: “Nobody knows what’s going on. The mess that the local economy is in is because nobody knows what’s going on.”
Simmons pointed out that this financial management problem was not a purely local and Bermuda Government issue. He said that the global financial crisis had been caused by Financial Experts who were dealing with new things that they did not fully understand. That when, as usual, the ordinary laws of economics applied, many newly created financial ploys and packages turned out to be worthless. This was what had precipitated things like the ‘sub-prime’ collapse in the USA’s mortgage market.
He also said that it seemed that people did not learn from their mistakes or from history. That, in fact, it seemed that people generally repeated the same mistakes every ten, twenty, or thirty years.
Speaking to how to resolve what he sees as Bermuda’s financial “mess”, he said that there were two answers. One was Austerity where Government cut spending. He said that this would be an effective answer but carried the risk of possibility of prolonging a recession. The other was Stimulus. Here the US answer had been to print billions more dollar bills; but this was not an option that Bermuda had.
Simmons warned that some Bermudians might think that the Bermuda dollar was ordained to be forever at par with the US dollar. But these Bermudians should realize that the value of a Bermuda dollar could easily change and, with bad national financial management, Bermudians could easily find themselves having to pay more than one Bermuda dollar for each US dollar.
Coming back to the matter of Civil Service cuts, Simmons said that the two options for Government were to make pay cuts or job cuts. He said that the Civil Service had grown too big and should now expect to be cut.
Our dollar being devalued would be very, very bad.
Does anyone really know how much new currency was created under the present government. Every single person can open their wallets and see new and old money in it. It was not just an intention to reduce the Queen ,but also it has and will create inflation with having more currency in circulation.
We also have 400 hundred years of Bermudian history and culture and people have never ever seen these levels of national debt created by PLP in 12 short years. They have raided the treasury , lavishly spent it on nothing to offer more to our people or tourism. Tried to cover it all up while they jet set aroudn the planet playing bermy super hero. Whilst the gangs back at home run rampant and kill for security over there necessity to keep their profits up in a failing society.
The politicians having vested interests in companies that they themselves as civil servants are accepting quotes from, so that they as directors or partners can reep vast profits. We have the former voices of the working people turning and becoming politicians and now implementing policy against the very people that voted them in as BIU heads. (Hoffa would be turning over in his grave)
The great Brown stain of Bermuda cutting funding and care for seniors at the hospital in the senate only to outsource to a more economic means thru a clinic that he owns. Doing stem cell research 3 hours out of New York with what petri dishes , no i think not, just aborted bermudian babies that no one seems to care about.(when was the last time you saw ads from the government telling these kids to abstain)
Another Brown stain with TCD hiring a company(long affiliated with Brown and the owners wife actually ran politically) that builds the new TCD building going over budget , but still gets paid. They then both open a privatised business in the new TCD goverment facility for emission control that is being paid for directly from TCD (government) into a business that they both own.
Then they turn around TAKE the cement silos from Jim Butterfield (that actually built them) and give more contracts to the same construction firm more jobs that all go over budget ever time and are still doing more jobs for the government. Then dear Zane is holding the govenment contracts for supplying all tires for the Bus service and street lighting and who knows what else.
There is so much winking and nodding going in the senate meetings that no one really knows what is coming next.
All I can say that Bermuda , all Bermuda , will eventually reaslise that the present government has raped us all. It did not care about colour, race, backround, age nothing , it was about absolute greed. Well bermuda wanted change and we all got it, right in the ass. Our children will never see the country that we still all love, while these hippocrites jet set all over the world playing like they are movie stars.
What of the playboy mansion parties for the Brown stains molesting son still sitting in a jail cell in the USA. Were the “Uighars” a plot to help lessen the indictment for the upcoming trial. Who knows… but obviously we were supposed to never know these people were here on the island. What we need before Independence is thrown in our face is a CROWN ORDERED Audit just like in Turks and Caicos for corruption and move in to present order.
http://www.reuters.com/article/idUSTRE57D3TE20090814
It is the government’s job to step in an create employment where and when private industry will not. Mr. Simmons has failed to state that government can also raise taxes to cover the cost of labor. Granted there was plenty of financial alchemy taking place in financial markets around the world which resulted in losses and will take many years to be absorbed. Unfortunately do to the magnitude of the losses many governments had to bail-out their financial instutions or face an extended credit freeze which would have led to a near certain world wide great depression. Responsible governments will do what they have to do in the short-term to keep their economies functioning – not everyone knows the potential outcome like Mr. Simmons does; thankfully.
I think we need to remember that in effect our dollar has already been devalued through the increase of Foreign Currency Purchase tax which means that each Bermuda dollar can only buy 99 cents US in real terms.
Craig, the entire Keynesian concept of the need for government to provide employment really only comes into play in a very specific set of conditions. Bermuda’s employment troubles are entirely self-imposed by among other things, the presence of cheap foreign labour, a structural skill gap, and the effect of term-limits forcing business divisions off the island.
Raising taxes only further complicates the problem by allowing the civil service to grow – if the political leadership are willing to acknowledge that government spending must be balanced by taxation. Every extra civil servant is another person not working in the private sector to generate foreign exchange revenue that makes the island wealthier, and taxes, which makes the government richer.
Staying on topic in response to Mr. Simmons (let’s not get all emotional people) cutting government employment will be no good for anyone. Further to his point of devaluing the currency – that is just a nutty proposition. Bermuda imports inflation as our currency is legally pegged to the U.S. Dollar. The more dollars Americans spend in Bermuda the greater the license the Bermuda government has to allow the creation of money. If a taxi driver picks an American up at the airport and charges a $20 fare to the St. George club and the tourist decides to give him a $20 tip on top of he fare that is the tourist choice. In contrast, if five years ago that same tourist only had enough money to give a $10 tip that has nothing to do with us as Bermudians from a supply of money perspective. The results are a whole other topic. Since the cab driver now has more money than he had in the past he is now capable of bidding a higher price for products than he could in the past – thus leading to increased prices. The U.S. government has been printing money in order to bail out its financial institutions. The banks, insurance companies, auto manufacturers, etc. have lost huge sums of money and at the same time have all become to large to fail. The government had to bail them out in order to save us all if you really look at the big picture. That money used to bail out the losers ends up in the hands of people who now have more money to spend. We as Bermudians are just as happy as anyone else to have that new money – trust me when I tell you that people would not like the alternative. So, why should we devalue our currency and lay off our people – when are the Americans going to start feeling the pain and take responsibility for their government’s actions. The Americans don’t want to pay taxes in order to finance their wars, resulting in further inflationary forces. So, whose currency should be devalued? In effect, inflation is a form of devaluation – it is the government stealing from its citizens. Taxation is not a bad thing if the proceeds are used to improve your country. Granted no one wants to pay taxes. The rich need to understand that we all stand on the shoulders of people who came before us. It is selfish to think that you should keep everything that you earn – who is going to pay for education, roads, police, etc., and for America – its wars? So, no we don’t need to devalue and we need to maintain government employment until alternative is created.