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Real debt bigger than ‘public debt’


TERRANCE A. JENNINGS

Real debt bigger than ‘public debt’

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APATHETICALLY, we the people are born owing money. We live naively contributing to the ever-increasing unpaid bills and will die leaving the next generation in more debt.

We are totally unaware of, and in most cases indifferent to, the state of our economy, as we selfishly divide along political party lines or, even worse, individually fail to acknowledge responsibility for or of the out-of-control debt.

The people must now unite or they will be forced to come together later, by international lending agencies, when we cannot pay our current bills. Neither politicians nor individual greed can build a prosperous future.

The so-called public debt generally refers to outstanding balances of past borrowings negotiated, entered into and received by the Treasury, the public purse, to be repaid from and used to fund past political agendas. Our forebears, grandparents and parents would have benefited from such borrowings and passed on its benefits to us, by way of community and infrastructure development and increased opportunities.

Many years ago we all should have diversified the economy to build and grow other streams of revenue, which would have by now matured and be contributing significantly to reducing the present financial indebtedness. Note a small effort was made to save via a Heritage and Stabilisation Fund.

Having elected politicians, we the people bought into their agenda and gave them control of our money and unpaid bills in the Treasury, demanding security and the rule of law, health care, education, social programmes, affordable housing with electricity and running water – a better standard of living.

We do this for future generations, our children and grandchildren, not recognising or realising that our borrowings will limit their future ability to earn and maintain a lifestyle they have grown accustomed to. Having invested heavily in education and with a highly skilled workforce, we must now invest in dynamic sectors and industries to keep our graduates producing here where they can repay, recycle and refund the state.

The cost of such improvements, under a hybrid capitalist socialist economic system, keeps increasing faster than the population growth rate, resulting in a greater debt per capita. Each citizen will bear responsibility for a portion of this public debt, resulting in increased taxes, fewer employment opportunities, lower salaries, higher cost of living, dilapidated infrastructure and a rolling back of social benefits – a failed state.

The only solution is to remove the budgeting process from five-year-term politicians and place it in the independent hands of our professionally trained financial graduates to implement long-term projections.

Stop fooling the people – the public debt is not the total debt. So-called contingent liabilities, such as Treasury bills/notes, loans or credit guaranteed by the state, letters of comfort, promissory notes, balances outstanding on BOLT (Build, Operate, Lease and Transfer) projects, loans assumed by the state and so on are also known as off-balance sheet financing and form more than 50 per cent of the amounts owed by we the people.

– TERRANCE A. JENNINGS

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