SAGE report: Data shows Bermuda’s Great Recession is home-grown

November to April in Bermuda can be a strange season. Tourist season is over and worker layoffs happen. 

Household incomes may drop. Nowadays even disappear. Parliament is back in session and levels of political rancour can rise. It’s during this period that Bermuda has twice changed its Governments. Days seem shorter and nights longer and darker.

Right now I feel as though I’m floating in a pea-green boat in our turquoise waters.

Parliament is meeting and like me, the Minister for Finance has told everyone that he has doubts about the quality of advice that he is getting from some of his senior civil service advisors. 

The SAGE Commission’s report is now effectively in the public domain. The BTUC’s leadership has indicated that the 4.6% government employee pay reduction is as far as they’re prepared to go and that they have what they consider to be the ‘protection’ of a Memorandum of Understanding that continues this 4.6% for two more years. In contrast, SAGE has indicated that promises will have to be broken and that more and deeper pay cuts are required.

Bermuda’s residential population is falling. But like ‘innocent men’ on trial, the Ministry of Finance and the Registry General are denying the DNA and CCTV evidence that shows this population decline. Worse? It transpires that nobody else has been maintaining an ongoing measuring of Bermuda’s residential population. So, it seems, nobody in Government knows what’s happening.  

The person who was Financial Secretary while Bermuda’s National Debt rapidly escalated from $119 million to around $1,000 million is about to retire on a pension of $2,000 a week; with his pension coming out of an under-funded Pension Fund that is back-stopped and guaranteed by ordinary taxpayers. But topping up the under-funded Pension funds doesn’t make sense with the deeply devalued and shrunken 86c government dollar that is trying to do the work of a normal $1.00.

Devalued you ask? Yup!  The very first thing that Government has to do with every dollar of revenue is to slice off 14c to pay Debt Service Costs. With that 14c sliced off, only 86c is left. Hence the Government dollar that does finally get spent is only an 86c dollar. It would be completely asinine to ‘top up’ those Pension Funds with these deeply devalued dollars. But if you review what I’ve just written, you might find that behavior of that kind may not be uncommon. [Pssst!  Government borrows back that 14c to return the dollar to a dollar. In the past, Government then borrowed even more so that it could overspend.]

Post Office losses

And that’s particularly the case when you review the Post Office, which has been running at multi-million dollar annual losses since 1996. That’s seventeen consecutive years. And during those seventeen years, faxes, email, the Internet, Facebook, Instagram, Courier Services, private mailbox services, cellphones, Iphones, Skype, tele-conferencing, and much more replaced and displaced what is now universally called ‘snail mail’. Yet the Government kept Post Office manning levels at the high levels common before all these technological advances and revolutions.

But the thing that is probably the craziest thing of all is that as we begin to seriously collect good data, we will learn the awful truth that Bermuda’s Great Recession is really a home-grown recession driven by a material and sustained loss of residential population. But as this happens we meet the newest phenomenon. Arrays of plain and demonstrable facts are often dismissed as mere opinion.

‘The time has come, the Walrus said, to talk of many things: Of shoes and ships and sealing wax,
of cabbages and kings. And why the sea is boiling hot, and whether pigs have wings.*

Hey! What just flew by my window? 

*Lewis Carroll – Alice in Wonderland