FRIDAY, OCT. 5: The Government-of-this-day has a secret unannounced “austerity” programme under way. It has been happening for three years. The figures shows what’s been happening since April 2010.
There are three important stories in those three lines.
First story? Year-on-year, Government’s net spending is declining. This decline — this unintended, now unavoidable, and secret Government “austerity” programme — results in a decrease in general economic activity. This pattern of spending supports and prolongs any recession.
Second story? Year-on-year, Debt Service Cost (DSC) is rising, rising, rising. Leech-like, DSC is sucking more and more tax revenue out of Bermuda’s declining economy. That tax revenue is being shipped straight overseas to overseas lenders. This rapid upfront loss of foreign exchange also damages Bermuda’s economy.
Third story? In July 2010, Government borrowed $500 million. In June 2012, Government borrowed another $475 million. Despite borrowing a total $975 million, Government spending in Bermuda on Bermudians and infrastructure has still declined.
Through eight consecutive years of significant overspending, the Government-of-this-day created the largest part of this self-crippling problem. Now it is handling this self-inflicted problem by using an unannounced “austerity” programme. A spending regime that results in a year-on-year decrease in Government spending.
In 2011/12 Government spending is 10 per cent lower than in 2010/11. Government’s 2012/13 spending will likely be down at least seven per cent from the previous year. Overall, spending in 2012/13 will be at least 16 per cent lower than in 2010/11. This is an overall 16 per cent three-year reduction in overall Government spending in Bermuda on Bermudians and Bermudian infrastructure.
That shows a clear and verifiable reduction in spending. It is there, right smack in front of your eyeballs.
In common parlance, and even in the arcane language of an Ivory Tower economist, a reduction of that size and nature will be described — if one is even minimally intellectually honest — as a measure of “austerity”.
In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government’s fiscal deficit spending is felt to be unsustainable. When a democratic and transparent Government undertakes ‘austerity’ measures, it usually does so by telling — or announcing to — its people what it is doing. Government explains to its people why it is doing it. Out here at 32N64W, neither is happening.
The Government-of-this-day is not telling, nor is it explaining.
In the strangest of twists, the Government-of-this-day keeps talking about applying a “stimulus” to Bermuda’s economy. That’s very odd. Even the mention or hint of a “stimulus” is exactly opposite to what Government’s own reported figures show and prove. Year-on-year, for each of the three consecutive years commencing April 2010, April 2011, and April 2012, Government has absolutely and undeniably spent — or, for 2012/13, planned to spend — less money in Bermuda on Bermudians and Bermudian infrastructure than it did the year before.
In fact, in 2012/13, at net $965.9m, Government spending is just $25m more than the $944.5m it spent six years ago in 2006/07. And look how costs and prices have risen in six years.
Imagine, in 2012, only actually spending — in Bermuda on Bermudians and Bermuda infrastructure — about the same that was being spent six years ago.
Imagine? It’s real! It’s really happening!
By all means, do hear what is being said. But for your own sanity, do look and see reality. Look at the facts. Look at the numbers. Trust your eyes.
The fact? The truth? The Government-of-this-day has had an austerity programme under way since April 2010. It’s just that “nobody’s sayin’ nuffin’ about it”, and “’arrybody in Guvmint is talking ‘bout stimulus”.
The Government-of-this-day has an austerity programme underway. That austerity programme is three years old.
It is a secret because the Government-of-this-day has not told you. That is the only reason that it is a secret. It is, however, reported in officially released documents.
Now you know, because I have been honest enough to tell you.