As we sit and watch the Bahamas National Debt Clock at Nassau Institute click away - now over $6.1 Billion, Mr. Franklyn Willson suggests that public policy should be used to discipline the consumer credit market. i.e. Government force.
He makes a good point that the continual and excessive build up of personal (consumer) debt, without limits, is not good for the consumer. However, when they cannot pay, the irresponsible lending institution will lose out. Unless the government suggests they need to bail them out with tax dollars, which is even more irresponsible.
But why would we think the Government would be responsible with taxpayer money, they’ve already bailed Bank of The Bahamas out at least once that we know of.
To suggest that government should be called upon to set borrowing limits for the private sector is odd. They are setting a most irresponsible example, not only with spending and borrowing beyond their ability to repay - to use Mr. Wilson's words, they’re “maxed out” - but with bailouts of its financial institution that was guilty of the bad credit practices he complains of.
We must never forget that governments operate using coercive force. To suggest they "nudge" better borrowing habits is an oxymoron. With public policy comes fines and jail terms.
Let the irresponsible lending institutions fail Mr. Wilson. The market will find its level. The politicians should keep their collective noses out of private lending practices. They should instead be concerned about the albatross they’ve created for Bahamian taxpayers.
