One of the weaknesses of democracy is that it encourages our political leaders to shy away from taking politically difficult actions that would serve the interests of their country in the long term, but would cost them popularity with voters in the short term. National budgets are often fine examples, and yesterday’s was no exception to this rule.

Bermuda’s difficult task is very clear. Our Government costs us more than this Island can afford and a monstrous $2 billion debt is evidence that it has done so for some time.

Either we address the problem, or it will escalate to the point where one day our financial rescuers will come in and dictate terms.

Employment-related costs make up more than half of Government spending and will need to be meaningfully reduced somehow, for Government to ever get its fiscal house in order.

Finance Minister Bob Richards knows all of this, of course, and went to great lengths in his speech yesterday to stress the seriousness of our fiscal situation, describing the national debt as “the biggest risk to our financial independence”, and reiterating his determination to eliminate the deficit within three years.

However, yesterday’s Budget featured a marked change of approach when compared with Mr Richards’s statement a year ago.

Then the centrepiece of his Budget was the plan to privatise or outsource a number of Government functions, an idea based on the work of the SAGE Commission and aimed at cutting out waste and giving taxpayers better value for money. It appeared a politically courageous plan, marking out a clear path to reducing the civil service to a more affordable and sustainable size. Yesterday, there was not even a solitary mention of privatisation, even in the short reference to SAGE. It seems that political concerns won out over fiscal prudence.

While Mr Richards did manage to trim expenditure by 3.5 per cent, his emphasis in this year’s Budget switched to raising more revenue through wide-ranging tax increases aimed at raising an extra $55 million.

The move will exasperate many in the private sector, who will doubtless feel that their pockets are being picked at a time of struggle to sustain a unjustifiably large and expensive civil service.

The removal of the payroll tax relief for hotels, restaurants and retailers could cost jobs, in the case of some hard-pressed businesses hanging on by their fingertips, trying to hold out for better times. The 0.5 per cent increase in payroll tax may not sound like much, but it will add to the cost of employment and make hiring a less attractive proposition — the last thing this economy needs right now. Mr Richards himself said that not one Government worker had been made redundant through this painful period and that “public sector workers had fared much better than their private sector counterparts during this recession”. But his Budget only seems to exacerbate this lopsided shouldering of the recessionary burden.

The national debt should be regarded as a national problem. It is a shared debt — that will amount to more than $45,000 per Bermudian by March 2016 — with shared consequences if we do not bring it under control.

The solution cannot lie with Government alone. The unions could have helped by extending the furloughs that had made substantial savings and at the same time helped to preserve public sector jobs. Their refusal to do so narrows Government’s options and makes redundancies more likely.

Realism is needed. Dogmatism and head-in-the-sand protectionism will only dig us deeper into the hole.

There is hope that we can grow our way out of this mess. The America’s Cup, and the accompanying global exposure and slew of new hotel developments, offers us a unique opportunity to kick-start our flatlining economy.

Righting our public finances will rely on sustaining the momentum far beyond 2017, however, and that may again depend on politicians making unpopular decisions for the long-term good of the Island.