Protip for the OBA

August 31st, 2011 by De Onion

Take ownership when the PLP does the right thing.

ie. “After pressure from the OBA the PLP finally did _____(good thing).”

Cricket and Football again

August 30th, 2011 by De Onion

You can’t make this stuff – government having an inquiry to find out where they spent our money. Just for some measure, $20 million dollars is about $300 per resident. For reference, it costs around $150,000 for a four year Olympic campaign in single-handed sailing classes. Over the last 12 months at least 6 self-funded athletes have competed in World Cup sailing events.

RSS Hacked

August 30th, 2011 by De Onion

Apparently my RSS feed was hacked and displayed wacky content – no idea when this occurred but hopefully it’s fixed now.

The real debt math

August 12th, 2011 by De Onion

So after watching the OBA’s presentation on the economy last night I’ve got a few thoughts:

Bob needs to take credit where credit is due – even this lowly blogger posted in 2007 about the upcoming drop in tax revenue and potential for a major economic slowdown. Bob Richards and Grant Gibbons were both sounding the warning horn many years before our current economic crisis and being attacked for it by members of the PLP.

As usual, the Premier has failed to address the salient issues and as usual, Bob Richards has provided a technically correct response that fails to put the salient issues into language that laypeople can relate to. He’s getting better and his presentation last night included a number of realistic proposals that would immediately set Bermuda on the right track… but let’s put the budget deficit and debt in a context of our daily lives so we can see how it hurts us each and every day.

There are about 37,000 working people who generate new wealth for the island and provide goods/services. While retirees, schoolchildren, housewives, and other non-working residents are taxpayers too they aren’t generating the wealth that fuels our domestic economy and allows for the consumption of goods and services so we’ll focus on workers because ultimately we (working people) will be paying for this debt.

Bermuda has about 1.2 billion dollars of debt and climbing.

1.2 billion dollars of debt divided by 37,000 workers = ~$32,400 dollars of debt per worker.Now, the real question – how much is the Paula Cox national debt costing each worker every year? This is important because all-else being equal this is how much more money could be in each worker’s pocket through tax cuts such as the cut proposed by the UBP to Payroll tax for people of modest incomes. This annual debt service money is effectively set on fire as far as Bermuda’s economy is concerned; it simply is paid on an ongoing basis to our foreign or foreign-owned creditors. It’s the taxpayer providing $70 million in interest payments for social services for bankers and bondholders. On top of that we need to pay down the debt, making contributions to the Sinking Fund so that’s an additional $25 million per year. $95 million per year total.

70 million in interest plus 25 million in principal equals 95 million per year out of the taxpayer pocket.

95 million dollars per year of interest/amortization payments divided by 37,000 workers = $2570 per worker per year.

So if you are a salaried or hourly worker look at your pay statement and add $214 per month, or $50 per week to your paycheque. Now take it away again – that’s the Paula Cox/PLP debt tax. If you have a job then you have taken effectively a $2570 a year pay cut thanks to the PLP’s financial management. Be sure to thank them!