Saturday, May 24, 2014

Debt Trap Or Ponzi Scheme


Anonymous said...

The saddest blow of all this confusion about the economic situation is the absence of rigorous examination of what should have been a 'turn-around' budget, does not betray any clear understanding of what has overtaken this country. For starters, it is difficult to discern other than a concern to reduce current expenditure, what the ultimate goal of that budget was quite distinctly. Confusion reigns. Yes, it rains.

If it is what the Minister of Finance spent such a great amount of time confusing not a few of us with, dealing with debt to make our bonds more attractive, then we are in deep doo-doo. This budget comes nowhere close to addressing that satisfactorily, and not even to current bond holders.

If it was to cut current expenditure, then the revenue side has gone largely ignored or seriously undermined.

There is an even wider problem. There are too few people with sound and deep knowledge of economics, both in and out of government. There is more. The situation gets even more frightening. The PS Finance, one is made to understand is also the Director of Finance.

With respect to a subject that that depends so critically on underlying assumptions made, when one and the same person is advocating and making criticisms of proposals made, there is logically one school of economic thought driving and dominating all proposals.

Then, the casualties most definitely of the above approach to national economic decision making are following: benefits to the widest set of stakeholders, balance, sound and reasonable recommendations, logic, sanity, and synergy. If you prefer, take your pick.

Anonymous said...

This is an excellent piece from an engineering profession.

May be this practical thinking should transform to the finance dept. That would help!

Nice work. John Peters.

Anonymous said...

The pluses are these. He appears to be extremely comfortable with numbers, ambiguity, and abstraction. These make a hell of an analytical difference when it comes to time series figures.

Anonymous said...

It is a Ponzi scheme. Desperately we are borrowing for consumption. Tell tale sign for engineering a financial disaster. Next we are borrowing again, to pay off loans. Another sign that the decision makers are at the deep end. Economic development is on hold here. You are borrowing to pay for loans that you must make payments to and those loans are increasingly not contributing to GDP growth. In the private sector, the board of directors would pay off the CEO quickly to speed up his or her sacking and stop this foolishness.

MI said...

Government iisn't doing the things it should be doing - functioning police service, judiciary, road, schools. Instead you get the reds and yellows taking turns to enrich themselves and think they know what they're doing. Stop trying to use public money for party vanity projects. Too many ministers with no productivity. Empires have been run by hundreds of people yet st lucia can't even build, let alone maintain a decent road around the island with all the "ministers for ra ra". How much debt there is and FUCK ALL to show for it. Independence is a fiction. St lucia relies on handouts. It's failed.

You can't have any meaningful economy when personal property rights aren't respected and crimes go unpunished. There's no incentives where there should be and too much stick where there shouldn't (police relations)

Also for a nation that needs tourism, people have a disgusting attitude to littering and plastics. Why can't government make a law for companies to return it like with the glass bottles? The pollution kills the fish and ecosystem. That's something useful they could do and would benefit everyone.

Tax system is inefficient as well but that's another discussion.

Anonymous said...

Budget speeches written for Ministers of Finance are the mainstay of knowledge about economics. When it shows and that bites us in the tail, most o us can not even see it for what it is.

Anonymous said...

Short answer: it is both. When you don't know where the heck you are going, any road will do. That is the total MO of the Ministry of Finance for decades on end.

Anonymous said...

Countries wealth is made by it's people. I do not know any Afro country that has a high standard of welfare and living conditions.

Anonymous said...

We are trapped because the ECCB with current leadership continues to fail us. People cannot make informed decisions about the future because the mandarins there do not put out information that can help citizens understand what exactly is at stake. They put out nothing that can help people for the future uncertainties and risks.

The ECCB does NOT consider the man in the street as a stakeholder. Meanwhile, it is very busy filtering its very packaged information. It provides communication to administrations in Member States that have little or sometimes absolutely no capacity to effectively manage their economies. Therefore, it is content on providing no forward guidance, just amusingly and historically dated reports on events past. Who needs this?Trends are most definitely, out of the picture.

Anonymous said...

What ever it is I would say the country is caput. It has not worked before will not work again. Things are set to turn or its head so you hold on.

Anonymous said...

@MI..."You can't have any meaningful economy when personal property rights aren't respected and crimes go unpunished".

YOU ARE MY HERO. Well said! The train has left the Station (St Lucia); ain't no stopping it!!

Anonymous said...

Really? that quote from DWIGHT VENNER.

He headed the Ministry of Finance aand the Public Service Ministry in what was deemed to be the most progressive? country in the OECS; that is; St. Lucia.

Then it is the same individual DWIGHT VENNER who has headed the Central Bank of the OECS for decades; and it is under his (DWIGHT VENNER's) watch that those millions of government debt (in the form of issue of bonds and treasury bills) were accommodated by the ECCB.

Now he's trying to cover his ass. It won't work.

He has to be sent home. He's time has come to be REPLACED.

Anonymous said...

Just where did St. Lucians get the idea that an individual who studied Economics; knows or has the competencies in Finance or Banking?

A whole lot of round pegs in square holes", dragging that country to its knees.