Rick Lowe
One often hears politicos suggesting things like "The Bahamas Debt to GDP levels at 54% is not bad when compared to Jamaica and other Caribbean nations".
One wonders why we never hear them suggest the reverse, or the fact that we should consider lowering our debt to GDP levels like more fiscally responsible nations?
And you can bet when the proverbial stuff hits the fan, which seems fast approaching, everyone else but them will be to blame.
As Philipp Bagus said in "Have we Crossed the Point of no Return?" for the Mises Institute recently:
"From a politician's point of view, the incentives in such a system are explosive: If I as a campaigning politician promised gifts to my voters in order to win the election, I can externalize the costs of those promises to the rest of the EMU through inflation — and future tax payers will have to pay the debt. Even if the government needs a bailout (a worst-case scenario), it will happen only in the distant, post-election future."
"Moreover, when the crisis occurs, I will be able to convince voters that it was not caused by me, but rather that it fell upon the country as a natural disaster — or that (better still) it was caused by evil speculators. While accompanying austerity measures imposed by the EMU or IMF may loom in the future, the next election is just around the corner. In such a situation, the typical shortsightedness of democratic politicians combines with the ability to externalize deficit costs to other nations and produces an explosive debt inflation."
Unfortunately, by the time the political class starts making these excuses, the country's currency has been devalued, or inflation has taken hold effectively destroying every citizens savings and property values.
By then it's too late though.
Are we able to turn our fiscal ship around before we reach the point of
no return?
As governments continue to benchmark against the the worst countries, businesses are expected to benchmark against the best or face new laws to force us to do so.
The double standards of much of the political class are appalling.
