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Who do we owe all our national debt money to and what would happen if we told them to get lost? After all, we're a country.  Someone can't exactly step ashore (and get past our Customs and Immigration), catch a taxi, drive up to Hamilton, grab the Government Administration Building, stuff it in a suitcase, and then fly off somewhere? Can they?

  So what would happen if we decided that we wouldn't pay our national debt?

Quite a lot.

First, our friendly foreign investors would turn on us and seize some of our overseas assets. They'd start with things like investments held on behalf of the Social Insurance Fund; the Public Service Superannuation Fund; the pension fund that pays the retirement benefits for Parliamentarians; and any other such overseas holdings. That's the start.

Then they'd go for stuff that our Government buys from overseas. They'd seize this stuff. Then they'd intervene in the process of payment of Government cheques to foreign suppliers. Much can happen.  

Iceland (population 300,000), is going through this sort of national debt problem right now. Dubai has re-payment problems with its foreign owned national debt. Argentina once defaulted on its foreign debt and promptly slumped into mass unemployment and suffered dramatically lowered house prices.

One way or another, we are obliged to pay because national debt is real debt.

Who then, owns a piece of us and how much of us do they own? Those questions take me back to 'plantation' days as I try to figure out who my new owners - my new 'massas' - are. I also go back to slavery days because I recognize that some rascal has put me back up on the auction block and has, once again, sold a piece of me. So I also want to know, who sold me?

But first, who owns me?  The total debt officially recognized and reported at March 31, 2009 consisted of:

n Loan facility - $200,000,000 from June 17th, 2005 and due June 17th, 2010 *

n Senior notes/2014. Value - $75,000,000 in $U.S. and due June 10, 2014.

n Senior notes/2022. Value - $140,000,000 in $U.S. and due December 4, 2022.

n A consortium of foreign investors with some local bank participation holds those two notes and provides the loan facility. Total current value is $415,000,000.

n In addition to those three obligations, the Bermuda government has an unprecedented $100,000,000 overdraft facility (O/D) with HSBC (Bank of Bermuda Ltd).

The Government agreed this HSBC O/D on August, 2009. It ends March 31, 2010. This brings current debt to $515,000,000 (over half a billion**.

The Government must now add even more debt to that $515m.

My brethren and sistren, we've been sold again. Who sold us?  Those people in Cabinet! With their recent streak of weak financial management, uncontrolled spending, run of bad financial decision-making, and wild financial promises; they overspent the money and had to borrow.

To meet current expenditure and cover their debts, they've stuck us - and our 'chilluns too - back up there on that ol' auction block.

"Jes' like in slavery days. Our own people too!" Those bad old "Forty Thieves" never did that! Certainly not after August 1, 1834.

Without that $100m HSBC O/D, January's and February's government pay cheques and cheques to suppliers would be bouncing. Its own failures and lack of control forced this Cabinet and Finance Minister to go scrabbling for cash to HSBC and this Finance Minister kept this frantic cash scramble as a secret.

On March 31, 2010, the existing O/D with HSBC ends. On April 1, 2010, the Government must still get more money. It must borrow another $200m just to meet current expenses. It will likely do so by way of another O/D accompanied by a new and additional long-term loan.  

On top of that, government will still force recently pay-freezed hotel workers - and everybody else - to pay a lot more by increasing existing tax levels and possibly creating brand new taxes.

This Cabinet and this Minister for Finance have performed badly. Result? We and our children are once again on the auction block, and in part, have been sold to new "Massa's". Today, Sally Bassett is crying.

 

*$200,000,000 loan facility will be rolled over. Old debt carried forward.

 **On March 31, 2004, the two notes and loan facility stood at $160,000,000. Total overdraft facility was less than $1m.[[In-content Ad]]

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