One such would be for the government to adopt an ﾑausterity for prosperityﾴ approach to organizing the national budget. Translated into concrete measures, this would call for across the board sacrifices for all public sector workers. It would also call for policies which recognise and reward innovation and productivity. In the ultimate analysis, such a policy review would also call for the systematic re-examination of the concept of ﾑfreeﾴ education and other social services.
It is still not too late for the Christie administration to sell the public on the idea that shared sacrifice is often the best tonic for an ailing society. Contrariwise, nothing is more socially corrosive than for significant numbers of people to form the conclusion that while they suffer, others are basking in the glow of the good life.
Having decided to meet its contractual obligations to an array of public sector workers, the Christie administration is now obliged to find the money. Information reaching us suggests that the government will have no alternative but to borrow the funds. Regardless of the name or label attached to the facility government devises, a loan is a loan.
What makes the current situation so poignant, is that no matter what option the government had decided, its critics would have had a field day. For example, had the decision been taken to renegotiate the deal, the Christie administration would have been pilloried by its opposition. The central charge would have been that Christie and his team were not to be trusted with living up to the terms and conditions of a supposedly ﾑsolemn agreement.ﾴ On the other hand, while the Christie administration has agreed to find the cash, its critics complain that it is a bad decision because the money has to be borrowed.
Quite obviously, this brouhaha shows the futility of any administration trying to placate and appease everyone on any given day. For our part, we are of the view that the Christie administration should have, early on, sought to make the case that radically changed economic circumstances demanded commensurate policy changes. This would have meant, for example, that the government re-examine big ticket items like the Educational Loan Guarantee Scheme and the previously agreed upon terms and conditions for the payment of money to public sector workers. It would also have had implications for how government went about funding any number of social services.
As we have previously argued, there is a case to be made for a comprehensive review concerning the funding of education, health and social welfare. Indeed, there is a raft of compelling evidence to support the thesis that ﾑfreeﾴ services are often either abused or ill-appreciated by those who are obliged to consume them. These strictures do not apply to certain categories of public goods. These would include the maintenance of law and order, national defence, and public health. Compulsory education, classified as a merit good, is one example of something that requires a certain level of public funding. This would apply to those people who cannot pay. In such a circumstance, the agency demanding the action sees to it that the need is met.
Put otherwise, by taking the course of least resistance in the matter involving pay increases to public sector workers, the Christie government has merely postponed a day of reckoning. By borrowing now to pay public sector workers now, the government is clearly banking on the Bahamian economy growing sufficiently to meet the promises that are being currently made. What complicates this rosy scenario are certain intractable facts about the extent to which the future of all Bahamians have already been mortgaged. With a public debt in the billions of dollars, interest payments have reached levels high enough to warrant concern from the International Monetary Fund. Incidentally, Central Bank officials express similar concerns.
When we reflect on these and other ominous indicators, it is clear that the time has come for the administration to break with a business as usual approach to funding the public sector. When an administration has to borrow money to pay its workers, and when these same workers, in turn, will be obliged to pay for the money they receive, this is a sure prescription for fiscal disaster.
Editorial, The Bahama Journal
