It’s called the Crisis of Rising Expectations and it’s been a well-established rule of a thumb in political science circles for decades.

Distilled to basics, it states that if expectations start rising at a rate exceeding the ability of a society to satisfy them, social turbulence begins to increase.

And at some point, if hopes begin to far outstrip reality, a pattern of dynamic instability is created within a community, resulting in major socio-economic upheaval.

It’s not a phenomena Bermuda has experienced, not in its full, undiluted form.

But the inability of growing expectations among rank-and-file Bermudians to keep pace with the rapid economic and social mobility enjoyed by those employed in the cash-flush International Business sector during the boom years of the ‘90s and early 21st century is a matter of record, not conjecture.

The rubber-stamping of public sector pay and benefit demands by successive Bermuda Governments, no matter how economically unrealistic or unsustainable over the long-term, owed, at least in part, to efforts to temporarily satisfy those leapfrogging expectations.

A twin-track economy had emerged following the runaway growth in the largely untaxed Bermuda re/insurance market and its associated industries and the concurrent weakening and diminishment of the overtaxed tourism-dependent sector.

For those in the economic fast-lane, mainly International Business professionals and service providers, life was never better and money certainly never more plentiful.

For those who lagged behind, the cost of everything was rising while their purchasing power inexorably shrank.

An ever-spiralling internal inflationary cycle had naturally come into play. Simply put, with far too much money now chasing far too few resources, Bermudians were being rapidly priced out of their own, already expensive community.

As Bermuda attempted to quickly recalibrate its social structure to the new driving force of its economy, the public sector began to absorb an increasingly large percentage of the labour force. With the tourism sector dwindling and the world of high finance largely cut off to those without specialist qualifications or experience, Government became the employer of last resort for all too many Bermudians.

And Government had little choice but to start issuing blank cheques.

Betting on a future of uninterrupted growth in International Business, one which would keep Bermuda’s coffers topped up by way of indirect taxation, Government bowed to an inescapable new reality: the public sector had become, by default, the last best hope for providing a bulwark against a potentially destabilising rise in social tensions during the protracted boom period.

Public sector wages and benefits had to reflect the spiking cost of living in Bermuda: they had to keep white- and blue-collar Government employees at least semi-competitive with those who were making a killing after the Island plunged head-first into the sea of global finance with little forethought and almost no appreciation for even the most likely socio-economic consequences.

There had to be an economic counter-force to offset the one-sided leverage being exerted by those who now enjoyed four-figure housing allowances and expense account-lifestyles.

This was the only way to avoid a full-blown Crisis of Expectations of the kind which political scientists and commentators have identified as the root cause of disorder in all too many economically unbalanced societies.

For when the gap between social aspirations and ground level realities becomes too large frustration, disenchantment and social unrest often rush to fill the vacuum.

And such a scenario was a very real possibility for Bermuda as the divide between the haves and the newly flush have-lots opened up and swiftly widened during the 1990s.

Ever since the Island’s unprecedented economic boom turned into what became a deeply-entrenched bust six years ago, many Bermudians have balked at the structural reforms which are necessary to make sustainable fiscal growth possible again.

Since most of the reforms would involve reducing the size of the top-heavy and now increasingly unaffordable public payroll, such embedded reluctance to accept even the most obvious and imperative changes is at least somewhat understandable.

But such intransigence is no more viable over the long-term than the endless borrowing Government must now engage in to keep the Bermuda economy at least partially afloat.

Just meeting our current debt-servicing burden is now approaching the critical limits of feasibility: taking on additional obligations to try and maintain an oversized and under-delivering public sector infrastructure is simply not an option for the Island.

The current Government recognises the turbulence which would ensue if it pursued economic restructuring with the single-minded zeal some of its more rabid supporters have proposed (just as many members of the Opposition privately concede that such an overhaul is ultimately unavoidable despite the public lip-service they continue to pay to the concerns of civil service unions).

The more obstinate intellectual refuseniks in leadership positions in our public sector unions must ultimately acknowledge there are fundamental flaws built into Bermuda’s existing economic structure if we are ever to correct them.

Similarly, the more boisterous economic free-marketeers among us have to accept that cavalierly eliminating public sector jobs and services to achieve immediate short-term savings will create precisely the type of long-term dynamic instability Bermuda was lucky to avoid 10 or 15 years ago.

We certainly must proceed with reforms, but with caution.

And in the end we must all accept that in the post-recessionary world all of our fortunes will now drag a little behind our expectations and total fulfillment will likely always lie just beyond reach.