And so once again there is widespread weeping, wailing and gnashing of teeth as Jamaica returns to a borrowing relationship with the International Monetary Fund (IMF).

Media commentators are having a field day. PhDs have been polished up and produced reams and reams of prose. Some are trying to convince us that it's not so bad. This is a different IMF - kinder, gentler. Others have already begun to shriek "Murder!" and warn of cuts in the civil service, devaluation of the dollar and other known IMF favourite ways of keeping poor countries poor. One thing is certain, there is no shortage of column inches on the subject, and serious writers (by which I mean writers who take themselves very seriously indeed) are filling those column inches with the usual redundant ritualistic rubbish.

I prefer to ask myself, why? Why are we once again in the arms of the IMF? Regardless of the soothing voices of some PhDs and others with axes to grind, surely none of us believe that the need for the IMF can be a good thing or a positive assessment of our economic management. The PNP won a turbulent election in 1976 on the platform 'We are not for sale!!' and then proceeded, within weeks, to sell us out to the IMF.

When, in the 1990s, P.J. Patterson was able to announce that we had ended our borrowing relationship with the IMF, he did so gleefully; with relish; and with all the pomp and ceremony of an emancipation celebration. Why have we returned to our own vomit like mad dogs, and with such unanimity that can only mean that we had absolutely no other option? Why?

For once, we are going to ignore the double and triple-speak of the PhDs and approach this thing based on common sense. There are several economic factors that drive countries like Jamaica to the IMF, but I am going to focus on the only really important one, and that is the budget deficit. If we could fund the budget, we would not need to borrow from anybody. And cutting to the chase and removing the political nonsense from the conversation, the bottom line is that budget deficits can only be properly measured as a percentage of GDP. Why? Elementary, my dear Watson. Unless we are to borrow our way to glory, we must produce our way there.

Produce our way out

So, the important thing to know is whether we will ever have a chance to produce our way out of trouble by knowing the initial handicap we are allotted in that horse race. In other words, what percentage of our current production have our genius politicians given away in budget deficits to go?

One last number before the good ol' common sense takes over. It is generally understood that all budget deficits are bad, but budget deficits of more than five per cent of GDP are national disasters for the simple reason that they drive huge inflation rates. Simpletons in government (and they are in the majority) usually react to budget deficits by asking the central bank to buy government debt. And, since an independent central bank is still a pipe dream in this hemisphere, the bank usually replies, "Yassuh Massa, how much?"

Since not even the central bank has a money tree this leads to monetary expansion and, voila, the dragon of inflation. The bottom line is that, no matter how you try to shuffle the cards so the problem seems lost in the deal, debt is debt and can only be properly met by production, export and earnings. Anything else is a three-card trick designed to lull us into a false sense that our economy is being 'managed' when, in fact, it is being butchered.

So, five per cent is the magic number. In 1981, Jamaica's budget deficit was 15.9 per cent of GDP. By 1986, under a finance minister with no PhDs or economic degrees but who was 'guided' by IMF conditionalities, we had eliminated the deficit and actually recorded a budget surplus of 0.7 per cent of GDP, which was increased to 1.5 per cent in 1988. Hurricane Gilbert put us back into deficit and, in 1990, the deficit had grown to 1.5 per cent of GDP. The following year, it was 3.9 per cent and we have never looked back.

Listen carefully to former minister of finance, Dr Omar Davies, in opening the 2002/03 Budget Debate on April 18, 2002:

"On the expenditure side, we have a budget dominated by debt servicing with the result being that virtually all sector ministries have been allocated resources significantly below their expectations.

"At the same time, we are faced with the imperative of reducing the fiscal deficit to a level which will give our creditors, domestic and external, the basis for confidence in the economy and the society. We feel that a deficit target of between five per cent and six per cent of GDP for the fiscal year and a primary surplus in excess of 12 per cent, facilitated by a credible revenue programme, will provide the reassurance needed.

"This adjustment, which is unavoidable, is taking place in the context of an international scenario which is hostile in every sense. There is a slowdown in the world economy and, in particular, in the national economies of our major trading partners; there is a drastic fallout in the travel trade, as reflected in the critical financial state of virtually all the major airlines and, at the same time, no one can fully determine what will be the consequences of the war in Iraq."

Budget deficit

Two items should jump out of the page at you. First, your finance minister was talking about a budget deficit of between five to six per cent of GDP, recognised worldwide as a national disaster, as "reassurance". Second, the so-called global economic crisis that we are told is suddenly the root cause of all our problems did not come upon us like a ton of bricks.

All and sundry with eyes to see and ears to hear saw the world economy slowing down from as far back as September 11, 2001, when an ambitious Arab shook the western world to its foundations and an imbecilic Texan reacted by sending troops, guns and bombs to a country that had troubled no one outside its own borders and neglected to address the real enemy within his own shores, namely, economic meltdown from budgetary excesses due to stupid and unnecessary wars.

Folks, we have had eight years plus to prepare for this famous global financial meltdown. What have we done? Diddly squat, that's what. We have squabbled incessantly about politics and continued to look to a change of colours every five or 10 (or 18) years as the solution to our problems, when I have been yelling at you for 15 years now that our elections are meaningless and will continue to be meaningless until we have a real framework of governance within which to elect our leaders.

So, we stormed the polls in 2007 and, in a fit of pique, booted the PNP (Promises, Not Performance) out of 'office' and voted in the JLP (Job Losses Principally). The PNP had a tradition of projecting budget deficit targets as a lottery game. For example, in 2001/02, the projected deficit was 2.8 per cent.

Disaster threshold

The actual deficit was over five per cent. In 2005/06, they projected a balanced budget but ran a deficit of 3.3 per cent. In 2006/07, a projected deficit of 2.5 per cent became 3.7 per cent in reality. But, at least, the recent trend was to remain well below the disaster threshold of five per cent.

The JLP's very first Budget projected a budget deficit of 5.5 per cent! And this grand prediction was based on projected increase (yes, increase) in expenditure of over five per cent in a country which had managed a growth rate of only 1.5 per cent the previous year. This is what your Government calls prudent fiscal management.

So, why do you think we are once more trapped in the arms of the IMF? Again, it is elementary. Our leaders cannot be trusted to run the nation's finances other than based on urgent political needs. Which prudent minister of finance, in the midst of a global economic slowdown that has lasted six years and shows no sign of ending, decides to increase spending by five per cent?

Why is it that none of our leaders are capable of the clear and rational thought that this budget deficit thing must be attacked, as follows:

(1) No more borrowing

(2) Cut expenditure

Several persons have put the idea into our leaders' heads. I am not inventing anything here. Is it that there is nothing solid in the heads to prevent the thought from entering one ear and floating right out the other?

Borrowing relationship

And so, we come to the almost comedic position of our minister of finance telling us of the "three broad conditionalities" that the IMF will introduce as attachments to our "borrowing relationship".

1. A consolidation of public enterprises, such as a structured approach to minimising the impact these enterprises have on the accumulation of debt.

Wow!! I guess we needed the IMF to tell us, for example, that the idea of creating a brand new Casino Control Commission to regulate one proposed casino for which ground is yet to be broken is ridiculous in light of the existence of a Betting, Gaming and Lotteries Commission with over 30 years' experience in monitoring and regulating gaming activities.

2. The formulation of a debt strategy for the medium term that will relieve the extraordinarily high debt servicing

Double wow!! Now, this is real rocket science that we couldn't have obtained anywhere but the IMF.

3. Limit the size of future deficits by legislating guidelines for fiscal responsibility, streamlining the civil service and enhancing tax collection.

Finally!! The real truth in black and white from the IMF. Folks, your leaders cannot be trusted. They must be forced to do the right thing by constitutional legislation.

Hard truth

The hard truth is that it is our fault. We do not encourage our leaders to change. We must stop supporting these politicians both financially and at the polls until they alter the fundamental system under which we are governed. No minister of finance must ever again have unlimited borrowing powers. Our Constitution must limit the amount of total borrowing and thus force unpopular decisions, such as retrenchment, when there are budget deficits.

We must insist that, when we vote a sitting prime minister out of office, he/she cannot again run for the same post. We must insist that no budget can be passed without full debate before it is finally cast. We must stop this nonsense of being presented with a take-it-or-leave it budget that has been cast by technocrats at the direction of politicians with absolutely no input from the people. And, we must insist on a law that a budget once passed cannot be amended to more than one per cent of its total value without the proposal being first put to the Parliament and a full public debate.

Never again must the public learn of a FINSAC as a fait accompli after the requisite laws are passed by a supplicant and pliant Parliament. Right now, we have a government of the parties, by the parties and for the parties. We must insist on a government of the people, by the people and for the people.

Or our children will pay the price.

Gordon Robinson is an attorney-at-law. Feedback may be sent to columns@gleaner.com.