“The ultimate piece of bad news for ordinary Bajans, as they call themselves, is that their Social Security fund has essentially invested about 80 percent of its assets in Barbadian public debt, which is now almost worthless. And so, you know, we’re looking at a major social catastrophe in paradise here…”
So just last month, Barbados tried to raise $500 million of public debt in the U.S. market, and they had to withdraw the debt offer. And now they’re really looking at very serious IMF-type conditionality in order to get out of this situation. So, you know, the ordinary middle-class in Barbados is going to experience higher taxes in the form of excise and VAT taxes.
And meanwhile you have this very wealthy elite. I’m sitting in a hotel where the average room is $350 a night. Two doors down from this hotel is a room that–there’s a hotel the charges $4,000 a night up to $12,000 a night with a two-week minimum. You know, they have this just very split-level kind of society where the very wealthy people from all over the planet come to Barbados and enjoy the beaches and the beautiful natural environment, but you have regular Barbadians having to actually pay most of the cost of government through VAT taxes.
The ultimate piece of bad news for ordinary Bajans, as they call themselves, is that their Social Security fund has essentially invested about 80 percent of its assets in Barbadian public debt, which is now almost worthless. And so, you know, we’re looking at a major social catastrophe in paradise here, and, I think, an important thing for us to take a look at in the United States, not because Barbados is a major trading partner in the U.S., but because it is a foreshadowing of what can happen if we are going to be utterly unwilling to raise taxes on big companies and the wealthy in order to help tackle our debt crisis.
… from The Real News transcript of the above video.
James S. Henry is a leading economist, attorney and investigative journalist who has written extensively about global issues. James served as Chief Economist at the international consultancy firm McKinsey & Co and as an investigative journalist his work has appeared in numerous publications like Forbes, The Nation, and the The New York Times. He was the lead researcher of the recently released report titled ‘The Price of Offshore Revisited.’