“The key for any government is to ensure that you are first of all in a position where you are not just borrowing money for day to day operations of the government and not borrowing money to pay salaries and other expenses,” Michael Halkitis (PLP), Minister of State for Finance (The Tribune April 4, 2013)
For the Minister of State for Finance to make the above statement, I would suggest, they are walking a tight rope and are hamstrung by their own excessive deficit spending and borrowing, and that of successive governments.
As can be seen playing out all over the world, countries cannot punt fiscal issues to the next generation after piling on the debt.
In other words, the charade "that all is well" is over and citizens are going to be hit harder with more taxes. Obviously that is why the government wishes to implement a Value Adde Tax (VAT). Maybe they see it as a panacea to continue to spend and grow government without worrying about balanced budgets and fiscal prudence.
The big question is, what might be the best way to deal with it?
The danger in all this, is just how far can the government push their tax and spend agenda before taxpayers reach their maximum tolerance level.
The government needs to level with the country and explain their difficulties in a frank manner – plead their case for more revenue if you will, but there has to be a counter initiative to implement controls, Constitutional if necessary to debt and spending levels, probably as a percentage of GDP.
I get the feeling the situation is a lot more precarious than Mr. Halkitis is able to tell us.
“Fools rush in were wise men fear to tread”.. The words of this old Nat King Cole ballad have so much meaning today.. This Very Awful Tax, VAT, will be the kiss of death to the Bahamian economy.. It has been a failure where ever it has been introduced with the Bahamas next in line.. Without cutting wasteful spending and reducing the bloated bureaucracy, there is no chance to bring economic prudence and growth to our failing economy..
Just like America, we are at Hell’s door as Debt, Deficit and Dollar Decline continues to drag down both of these country’s debt ridden economies.. It is time for the political fools to become wise men and put their nation’s interest above their own interest.. We can always hope but as always, hope in the Bahamas and now in America is only just day dreaming.. The debt clock keeps running and time is rapidly running out..