Thank you for your publication of my letter of last week touching the captioned subject.

I take comfort in discovering that, although I am not an Economist, I seem to have stumbled onto a valid argument for our Economic and Fiscal travails.

I say this because I came across two articles which report qualified and prominent Economists who have advised the same, or similar points, although much more eloquently than I ever could.

On SKNVibes, dated Monday 14 September there is an article entitled "Public sector investment dragging in ECCU"

The article speaks to comments made by Country Economist of the Caribbean Development Bank, Mr. Elmer Harris.

I quote directly from the article, which quotes Mr. Harris:

"In explaining the significance of stimulus packages during times of economic crises, Harris stressed that PSIP's [Public Sector Investment Programmes] contribute to the growth dynamics in an economy through the investment programmes and projects.... It also contributes to job creation and promotes social development, particularly poverty reduction. He added that a stimulus may contribute to environmental sustainability and disaster management, and can be an instrument of economic management that ensures ' macroeconomic and sector strategies are translated into programmes and projects'....'The PSIP is a logical process in the entire financial exercise. When one looks at the entire arrangement, the programme is important in terms of promoting growth and development, but it is...important that you have the available financing for attaining your objectives' he said."

In a nutshell, the CDB's Country Economist says that Public Sector Investment -- Government Spending -- is fundamentally important to stimulating growth and development in an Economy suffering Fiscal and Economic
crises. If it is left to the Government to stimulate the Economy in times of Recession and Depression with Public Works expenditures, as it is in my opinion their moral and legal imperative, it follows axiomatically that Government must procure the necessary funding to do so. In the Real World that is done by Government borrowing.

Lest we forget, Anguilla is in the Real World.

In an Article in The Huffington Post of today entitled "Why Government Spending Is The Solution, Not The Problem", Marshall Auerback of the Roosevelt Institute, speaking about the United States, says this:

" However, we believe that the principle opposition to increased government spending is predicated on the simplistic notion that the same government that has driven social security and medicare to bankruptcy and national ruin is about to do the same with healthcare. Ultimately, objections to fiscal activism always come back to what we have been saying for a long time: namely, the need to get past the deficit myths and wrongheaded notions of 'national solvency' so that we can move forward in other areas. In the words of economist Bill Mitchell of the University of Newcastle, Australia:

Within modern monetary economy, as a matter of national accounting, the sovereign government deficit (surplus) equals the non-government surplus (deficit) ...In aggregate, there can be no net savings of financial assets of the non-government sector without cumulative government deficit spending, The sovereign government via net spending (deficits) is the only entity that can provide the non-government sector with financial assets (net savings) and thereby simultaneously accommodate any net desire to save and hence eliminate unemployment."

It follows that Anguilla's only hope of recovery from the Fiscal and Economic Recession/Depression which we are now experiencing is for the Anguillian Government to BORROW, not 49 million dollars, but 100 Million dollars, and to immediately begin spending it on salaries, road building projects, constructing a new Government Administration Complex, and other works.

If the U.K Government is required to say 'OK' to this borrowing, they have a Moral obligation to do so without delay. I say "Moral" because I am not aware of any Legal obligation outside of Section 55 of the Constitution which invokes this condition precedent to borrowing
.
We often hear of the British Governments' concern about "Contingent Liabilities", but that too is without basis in the Law, or in the Constitution. In other words, the British have no legal obligation to pay any of Anguilla's debts unless they sign as Guarantor.

So, there should be no reason why the Government should not inform us by next Thursday that they have obtained a loan for 100 million dollars to stimulate the Economy, followed very quickly by the announcement of the many and massive Public Investment Spending Programmes.

It is my humble view, Sir, that Anguilla not only comes FIRST, but MUST ALWAYS come FIRST!!

Thank you, Good Sir, for your kind attention.

Tommy Astaphan

Little Harbour

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