Chapter 8

http://www.jamaicaobserver.com/magazines/Business/html/20090417T040000-0500_149596_OBS_MOUNTING_PUBLIC_DEBT_TRACKS_FISCAL_INDISCIPLINE__SAYS_WEHBY_.asp

Jamaica’s increasing public debt, which is now a little over $1 trillion JMD (over $13.5 billion CAD), has been a result of a poor track record for meeting fiscal targets. Senator Don Wehby has recently said that since independence in 1962, there has only been a fiscal surplus nine times, which led to never-ending deficits which in turn led to this huge public debt. The total public debt in 1990 was $43.2 billion JMD (over $585.9 million CAD). In 2007, it was $990.8 billion JMD (over $13.4 billion CAD) and now, in 2009, Jamaica’s public debt is over $1 trillion JMD. Several problems have come up from this public debt like reducing funds in order to spend money on social services and limiting Jamaica’s budgets. As a result, Wehby has said that to achieve any economic growth, balancing the budget and reducing borrowing are necessities.

Public debt is defined as all of the money owed by all levels of the government. Because governments usually need to increase the amount of spending money they have over tax revenue, governments would normally need to borrow money and acquire a deficit. If there is a lot of competition for funds, interest rates and borrowing costs will increase. Wehby has said that reducing borrowing would be an important part of economic growth. By reducing borrowing, prices of goods and services would as a result decrease as well. Although Wehby only really said that putting policies and fiscal discipline into place will help with economic growth, it would definitely help out future generations if Jamaica’s economy was back on track.

Canada’s public debt has increased over the years, and if this continues happening, teenagers now who will be out in the “real world” in a couple of years could be facing a big problem. Of course, right now, we may not care too much about public debt or anything of that sort because we have other things to worry about, but eventually, we will most likely find ourselves in situations we don’t want to be in. Once we have to start paying taxes, buying groceries every week, and living on our own, the problems and issues concerning money in the government will definitely be unavoidable.