I am writing this the weekend of the Queen’s Diamond Jubliee. As she celebrates the 60th year of her reign, Queen Victoria is now the second longest-serving monarch after Victoria, who served 63 years. There is definitely an air of excitement, if not patriotism. This positive energy is most welcome on the back of less than positive news as some are predicting that economic turmoil in the UK, in the Euro-zone, and the United States will only worsen.
Allow me to summarise the scene as I see it. Here in the UK, devolution to Scotland, Wales, and the English regions is very much on the political agenda. In the U.S., the UK, and on the continent, nearly every major government has been thrown out by unhappy voters in the last four years. The latest is, of course, France. Trying to explain it as left versus right seems to be inadequate. The only major leader to have been re-elected since 2008 is Chancellor Angela Merkel of Germany. Still, it is hard to ignore the gains made by the opposition in recent state elections.
Some say that to understand politics; you need to understand economics. Some say that to understand economics, and you need to understand politics. Perhaps both views have merit as those of us who enjoy watching HBO’s Game of Thrones understand only too well. I am quite worried about President Obama’s prospects for victory in what some call the most expensive election in history, come November 6th, 2012. I heard an American political analyst explain an apparent correlation between U.S. unemployment numbers and the chances of an incumbent being returned to power for the second term. If his team does not succeed in giving the electorate a sense of hope economically, he will have a very tough time, come November.
Beyond November 6th, 2012, ‘Taxmageddon’ is what the media calls the impact of the soon-to-expire Bush-era tax cuts in the United States. Economic disaster waiting to happen or a much-delayed step in the right direction? I heard this one guy on Youtube who is convinced that the U.S. knows that the dollar is too far along the road to collapse. They intend to let it fall and establish a new U.S. currency backed by its considerable energy reserves. The theory even says that China is well aware of this so-called plan, hence China's haste to convert dollar reserves into hard assets around the world. This is an odd but interesting view.
US Tax Singapore
Returning to the Eurozone, most observers are worried about Greece, which is caught up in a never-ending recession and an inability to comply with the rigid demands for austerity made by its European partners (i.e., Germany). Many fear that after the recent electoral deadlock, the June 17th elections will result in a disorderly exit from the eurozone. Some even predict the end of the euro altogether. A few even see the end of Europe as a cohesive and influential economic bloc.
Such is my summary. Now two things distinguish today's debate from that which raged before the 2008 economic shock. Firstly, unlike 2008, there may not be as much political will to throw cash at the problem. The evidence favoring deficit spending is not that convincing so that the expected second big recession will be even more difficult than 2008-2010(?) one. Secondly, before 2008, it was uncommon to hear someone say that a big economic shock was coming. Today, there appears to be a wide spectrum of views that range from an expected complete fiat currency collapse to a small expected correction. Time will tell who is right.
As I look at Trinidad and Tobago and the wider Caribbean, it is clear that the debates taking place on our tiny islands mirror debates in larger economic blocs. Should budgets be balanced, or is deficit spending needed to stimulate growth? Should Tobago enjoy greater autonomy from Trinidad, or should the existing political arrangement remain? We should be wary of Throne Games and intelligently engage with these varied economic and political issues. This is a unique opportunity to contribute to creating a better system—a better system to the extent that it considers the needs of the many. The present system serves to benefit the few at the expense of the many. Now more than ever is the time to engage with our democratic institutions more actively.
My name is Derren Joseph, and I love the Caribbean region. Despite its challenges, I continue to have the audacity of hope that we will enjoy a brighter tomorrow.
Read more on derrenjoseph.blogspot.com.
Note: The blog that used to be here is now at https://www.mooresrowland.tax/.