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Why delay the debate on Bermuda's national Budget? Because the Minister for Finance has belatedly discovered a 'debt time bomb' in that a cash-strapped Bermuda Government is due to repay a loan facility of $200,000,000 that becomes due in June 2010.

In 1998, the late Eugene Cox took over the UBP's gross (national) debt of $163,500,000. He died in office in January 2004 with Bermuda's gross debt at $160,000,000. This was $3.5m less than what he had taken over from the UBP.

Mr. Cox was a strong Minister for Finance. In February 2004, with Debt at $160,000,000 Paula Cox became Minister for Finance. Six years later, on January 27 in this newspaper, minister Paula Cox admitted to a net public debt of $679,000,000 - more than four times as much debt as Minister Eugene Cox had passed to her.

Under her management, Bermuda has borrowed an additional $519,000,000. National debt charges - like credit card charges - have shot up from minister Eugene Cox's 2003 low of $162,400 per week to 2009's reported $419,230 per week. For the financial year 2010/2011, these charges will easily go over $500,000 per week. Triple what they once were.

There has been an absolute shift from Mr. Cox's careful management to a habit of adding debt as if there were no tomorrow. This Cox 'chip' is not up to the standard of the Cox 'block'.

In Uyghur month 2009, Minister Paula Cox described herself as "feeling politically neutered". Seven months later she wrote: "The Minister of Finance operates as a cog in the wheel. My role is to add value and to provide input on fiscal positions... I can indicate support or objection. However the sponsoring Minister(s) knows that I cannot overrule their request unless I have others who join with me to support and uphold my position. Individual Ministers are 'finance directors' in their own right...".

Unlike all of her predecessors, and by her own admission, she is not in charge. She is financially neutered. Comparing her management result of mushrooming debt and uncontrolled overspending, to those of the previous PLP Minister for Finance proves her abysmally poor performance.

Pushed around by an overspending Brown Cabinet, and in order to fund every day expenditure in 2010/11, the minister must now add another $120m to $150m to her just acknowledged $679m debt.

Tax increases

This will rocket debt levels to $799m (possibly $829m). The minister must now also increase general tax levels. She is forced to take this wrong time wrong way tax action because of her six years of weak management.

Under the Brown/Cox regime, this country began running on debt. The minister and Cabinet adds debt - uses credit - the way developing countries add debt and unwise credit card holders flash their credit cards.

Like a credit card balance, national debt must be dealt with. In June 2010, Bermuda is supposed to repay that $200,000,000 loan facility. However, repayment money is not secured in any Sinking Fund, stuffed in any mattresses, or buried in back yards.

We don't have that $200m because the overspending uncontrolled Cabinet spent it a long time ago. So the minister has to borrow more money.

Put the two together: $200m due in June plus $120m ($150m?) for current expenses equals a $320m ($370m?) total required in the form of a new loan. That's like paying off one credit card with another.

With some national and corporate borrowing, it often makes sense to roll over debt. But not when adding more debt in order to cover national - or corporate - operations that are running at a national deficit - or corporate loss. Big, widely resourced economies like the U.S. and the U.K. can do that. But small delicately balanced economies like Bermuda's cannot.

Admitting to owing $679m, Minister Paula Cox is now puzzling over how she will explain and justify her need to negotiate a new loan and borrow a fresh $320,000,000 ($370m?) - just to 'tide her over' to March 31, 2011. Whether its personal, household, corporate, or national - this is classically bad money management.

And remember, just seven years ago, with minister Eugene Cox handling finance, Bermuda owed a measly $160,000,000 - and had been paying down debt.

The minister's Budget debate delay tactic is simply a useless bid for time to marshal more words and call up more rhetoric so as to create more excuses about the impact of global economic forces.

The minister's real problem? How will she package six years of "brown stuff" and make it smell like Chanel No 5?

Given the Premier's penchant for tilting at ancient windmills, even in this financial matter he is likely to inject some invective about race - as befits an ancient race-rebel from the long-gone 1960s.

But wasn't it a black man - the late Eugene Cox, JP MP, B.Eng (McGill) - who, for years, ran surpluses and reduced national debt?

Words cannot alter an arithmetic result. This Brown/Cox duo has screwed up! It is in Bermuda's best national interest to change, and change now!

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