Video: ‘Debt Is Our Biggest Internal Pressure’
Bermuda’s national debt — which currently stands at approximately $2.5 billion — is the biggest internal pressure we face, according to three local experts.
Bermuda College Economics Senior Lecturer Craig Simmons, Chamber of Commerce President John Wight, and former Business Bermuda CEO Cheryl Packwood recently sat down with Bernews for a panel discussion for the upcoming 2018/19 budget.
To start the discussion, host Jeremy Deacon asked them what they view as the biggest internal pressure the island faces, with all three agreeing that it is the debt.
Chart extracted from the Government’s Pre-Budget Report released in January:
Craig Simmons said, “I would say the debt, because that constrains Government in terms of the social programs that it can offer.
“The recovery has been anemic at best, and I would tend to think that a lot of Governments would like to spend some money, but with our debt to GDP ratio hovering around 40 – 45%, your ability to spend is severely limited. So that’s why I would say that the debt is the biggest internal restriction.”
“I agree, I think that the debt is the biggest challenge we have,” said John Wight. “$500,000 per day we pay for interest on the debt, before we even pay back the debt.
“So I think the challenge for Government will be to grow the economy, while at the same time understanding that we don’t have a lot of excess cash to be able to fund some projects.”
Extract from the live stream showing the discussion on the debt:
Cheryl Packwood also agreed, saying, “The debt is restraining us from doing the things that we need to do in terms of social programs.”
“Debt is not in and of itself a bad thing,” she added.”If you can service your debt, your debt was supposedly used to do things, build schools, build roads, provide social programs.”
“I think part of our biggest challenge is trying to find that vision of how are we going to get out of the crisis we’re in,” she said, adding that our economy has been constricted and has not grown, and if “we grow this economy, then the debt is no longer a problem.”
The video above was extracted from the live video of Bernews panel discussion where the trio discussed the upcoming 2018/19 budget, which is set to be delivered this Friday [Feb 16].You can watch the full video here, view all our coverage of the 2018/19 Budget here, and we will post additional excerpts/transcripts from the panel discussion as able.
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The question has to be why is debt the problem? The PLP is saddled with lack of garbage trucks and buses for example. Run down Government buildings and roads. A Causeway that needs to be repaired. So many items that need attention so where did the debt go? So far the PLP have not owned up to their mismanagement of the economy from 2006-2012. They spent the money but not on Capital projects or income producing projects. Now they, and Bermuda, have to live with their legacy.
bingo
I really hope all PLP supporters read this article and believe it. For some reason they do not acknowledge the debt they either do not believe it or choose to ignore it. The government of the day do not take the debt seriously if they did they would not be ordering busses nor trash trucks, and ten new busses at a time. Where to he$$ is the money coming from Burch or do you even care to know? They will put this country so far in debt we will be like all the other poor islands. Maybe Ewart is buying the busses….. Yeah right.
Along with this government! Pressure on top of pressure and yeah they put us in debt the first time and now they are back! I’d say $500,000.00 per day in interest payments along with the PLP running the show- it’s a toss up on which of the two is causing the worse pressure.
Please be honest and state the OBA added to this debt
The PLP increased debt by 626% in five years and the OBA increased debt by 94% in 4.5 years.
Since numbers don’t lie (unlike members of political parties), it show from 2007 -2008 (I’m pretty sure before those dates, dept levels were equally low as well) before jumping by almost 50% after those dates. Question, what happened during those years and what do we have to show for the increased debt? For a country without natural resources to export, for the longest time we had one of the world’s lowest national debt, to one 12x higher in a period of just 10 years. All without any major natural desaster, fighting in a wars or military conflict or nationalized healthcare system to fund. People defending certain groups claim it was spent on infrastructure, but everyone knows it to be a lie (infrastructure spending would be road works, transportation, building spending), if this was not a lie, where are the assets to validate what was spent. Only thing I can think of built during those years was the Louise Brown Building (over budget), port royal golf coarse (over budget, actually it wasn’t, budget was “money is no object”), the cruise ship terminal in dockyard (over budget and so badly constructed needed major repairs within the 1st 2 or 3 years), and the hospital project.
After spending $2.2 Billion over 11 years, what do we have to show, broken public transport system with low staff and few working buses that cannot maintain regular service and and garbage collection in even worst state. Those are BASIC SERVICES, and government failed repeatedly to provide reliably, unlike their own monthly salary.
It’s time that those responsible are for once held accountable and made to pay for the disservice they have done (tax payers and the citizens of Bermuda have paid too much for too long)
and the hospital drive way just got re-paved! guess which PLP MP did that job?
And yet on the radio show they still call it ‘good debt’.
It’s all good because Burt promised to balance the budget by 2018 and then reduce the debt, by expanding the economy into the technology incubator and deepsea mining. Simple when you’re as brilliant as he is.
For a long long time Government never had an income problem. It had a spending problem. That spending problem exploded in 2007. The OBA started to get a handle on that ever growing mushroom cloud of debt. They were off to a good start.
Too bad the blind wisdom of the voters does not see the debt as their problem even though it costs each & every one of them plus their children $10 per day, & growing again, to service.
Do we not have even the most basic of civics & economics courses in our schools to prepare kids for understanding the real world they will be thrust into?
the main problem with all this is us we don’t care
its like using a credit card and thinking we are not required to pay it back