Jamaica’s debt inches closer to one trillion dollars

[Karl]

1944 ?

Not into obfuscation of the issue..

Give us your astute analysis of the last 2 decades:

Debt
GDP
Economic Growth

Have no intention of limiting myself to the last 2 decades!
Except to say what we already know -

Debt - Increased
GDP - Fell
Economic Growth - Stumbled along at extremely low levels!

The debate should be a forward looking one (25 -50 year and beyond aims) - We are, where we are! Which way to - "the how" to FORWARD!
That is what we have to deal...
...yes? ...Brucie?

[Peter R]

Karl,

It only makes sense to increase debt if Revenues are there to fund the debt. Can Jamaica afford increased debt? What would we be leaving to our children? What percentage of govt revenue is used to carry debt? (see below)

And what percentage of the population is really enjoying the "fruits" of our debt?

I copied the info below from the CIA World Factbook:

Economy - overview:

The Jamaican economy is heavily dependent on services, which now account for more than 60% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina.





Jamaica's economy, already saddled with a record of sluggish growth, was hit hard by Hurricane Ivan in late 2004, but has made a gradual recovery. The economy faces serious long-term problems: high but declining interest rates, increased foreign competition, exchange rate instability, a sizable merchandise trade deficit, large-scale unemployment and underemployment, and a high debt burden - the result of government bailouts to ailing sectors of the economy, most notably the financial sector in the mid-to-late 1990s. Following a strategy begun in 2004, Jamaica has reduced its public debt to 133.3% of GDP. Inflation also had declined to 5.8% at the end of 2006. High unemployment exacerbates the serious crime problem, including gang violence fueled by the drug trade. The government faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments while simultaneously attacking a serious and growing crime problem that is hampering economic growth.

GDP (purchasing power parity):

$12.84 billion (2006 est.)

GDP (official exchange rate):

$9.23 billion (2006 est.)

GDP - real growth rate:

2.5% (2006 est.)

GDP - per capita (PPP):

$4,700 (2006 est.)

While we can easily say that this is an American synopsis of how things are, I don't think the numbers lie. We need to rein in the debt burden

[Karl]

Karl,

It only makes sense to increase debt if Revenues are there to fund the debt. Can Jamaica afford increased debt? What would we be leaving to our children? What percentage of govt revenue is used to carry debt? (see below)

And what percentage of the population is really enjoying the "fruits" of our debt?

Peter R: All very important questions.

..but, we are where we are! ...and, all our people are clammoring for 1st World standards - Standard of Living and attendant infrastructure. That must be satisfied in ways that the people consider satisfactory...or, at worse bearable. Not satisfied as some detatched technocrat would have it satisfied...but, in a manner that finds favour with the people.

I think we are all agreed that the PNP being thrown out of office meant significant numbers thought it is neither a situation with which they are satisfied nor one they found bearable.

What then must be done to not have an uprising on our hands?

What is our particular situation...i.e. what needs fixing immediately and or in the new term and what is that cost?

Based on what we each think we would like the country to 'look like' and how we would like to 'live'...I am sure each and everyone of us can list the things and the areas needing attention now? If we do that, each and everyone of us can put a dollar cost besides each item and arrive at a total figure.

I copied the info below from the CIA World Factbook:

Economy - overview:

The Jamaican economy is heavily dependent on services, which now account for more than 60% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina.







Jamaica's economy, already saddled with a record of sluggish growth, was hit hard by Hurricane Ivan in late 2004, but has made a gradual recovery. The economy faces serious long-term problems: high but declining interest rates, increased foreign competition, exchange rate instability, a sizable merchandise trade deficit, large-scale unemployment and underemployment, and a high debt burden - the result of government bailouts to ailing sectors of the economy, most notably the financial sector in the mid-to-late 1990s. Following a strategy begun in 2004, Jamaica has reduced its public debt to 133.3% of GDP. Inflation also had declined to 5.8% at the end of 2006. High unemployment exacerbates the serious crime problem, including gang violence fueled by the drug trade. The government faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments while simultaneously attacking a serious and growing crime problem that is hampering economic growth.

GDP (purchasing power parity):

$12.84 billion (2006 est.)

GDP (official exchange rate):

$9.23 billion (2006 est.)

GDP - real growth rate:

2.5% (2006 est.)

GDP - per capita (PPP):

$4,700 (2006 est.)

Peter: Let us accept the figures. The statement on reigning in the debt is one I am sure that is accepted by all of us.

...but, what is our situation? What is the context within which we have that aim?

I am saying the context I outlined in my previous post above is 'bang on'. If I may put it another way...a term we are all familar with - "beer pocket and champagne taste"!

The fact is the PNP were thrown out because they could not supply the champagne. The expections the JLP sold and which was swallowed by appreciable numbers is - BETTER MUST COME and it MUST COME NOW!

The government has this terrible 'fix' - expectations that demand satisfying...and which to be satisfied requires 'more' than we have...'more' than we earn (tremendous amount of funds)!

Now if any of us through any sustained period kept spending more than we earned ...we would have to borrow...to fund the budget shortfall!

What am I saying about the government increasing borrowing, aid & grants, working at improving rate at which new investments come in...renegotiating loans on the books?

Let me draw an analogy with the situation some persons have found themselves in a period when earnings fall...if they wish, for example, to continue to enjoy and even aspire to improve the lifestyle to which they have become accustomed...or, if the aim is to do that with an eye on even better livestyle in the future...

...then some of these persons make the decision based on their assumptions and planned calculations to remain in their properties - and leverage the equity in the property. They renegotiate the mortgage they have given on that property to arrive at lower monthly payments to service the current mortgage loan...and then take on more debt, that is, give a second and or third mortgage on the property.

Well unlike individuals with properties who can 'walk away', governments cannot 'run away' from their property (the country). ...but, countries affairs can be planned to increase GDP...increasingly earn more foreign exchange...improve towards 1st world standards...and, countries' debts can be renegotiate to lower costs of servicing same...further and greatest of all - sound plans can show those who lend to countries an almost bottomless pit of 'equity'! Leverage of that 'equity' makes available more funds to 'fix'...to move the countries onward to better...sure it saddles future generations with servicing that debt. The premise on which that future burden is considered 'bearable' lies with plans those governments put before their people, their creditors, lenders, aid & grant givers and potential investors.

Specific to our country: While that deficit spending continues...our government must answer your questions...and, the other questions being asked of it by various interest groups within the country and the collective whole - its people.

We are, where we are - beer pocket and champagne tastes...failure to satisfy 'the taste' and we 'blow'!

Our governments currently have no choice in the matter of increasing our debt. How this government and succeeding governments implement/execute 'the movement' towards 'reigning in the debt' balanced against keeping the lid on our pressure-cooker of a society (satisfying the taste) decides when 'things will be turned around'. - (Turn around it must!)

Yup! The man with the house banks on improved earnings as his renegotiated debts plus current income to take him along.

Our government banks on improvement towards 1st World standards of living, as it improves infrastructure and delivery of social services while investment inflows, aid & grants, new loans, lower debt servicing costs take us along...as the government hopes the lid on our pressure-cooker of a society stays on!

Both the man and the governement hope that the measures taken to tide them through the turbulent times will prove to be enough to 'hold on' until income/earnings exceed spending!

[Muadib]

'The fact is the PNP were thrown out because they could not supply the champaigne.'

Champaigne eh.. heh, heh.

How about providing water first ?

Joker.

[Karl]

'The fact is the PNP were thrown out because they could not supply the champagne.'

Champagne eh.. heh, heh.

How about providing water first ?

Joker.

Stap! Stap kin puppa-lick! Think 3,000 votes or thereabouts! Just as I said, "appreciable persons thought the PNP should go..." the numbers also show that appreciable persons thought the PNP should stay.

Joker!

...and, OK correct the spelling on
"champagne" In fact, let me correct it!