In a previous opinion — “Are black OBA members on the white side of history” — I explained my reason for joining the One Bermuda Alliance. I expressed a shared concern that after the political rhetoric has subsided, the issue Bermudians will care most about is the health of the economy.

Therefore, it is the Government’s primary function to pursue policies that will bring about a healthy economy. To this end, there is an elephant in the room that no one dares to mention. It is the very high cost of interest when borrowing money to pay our mortgages, to run our businesses and to send our children to institutions of higher learning.

The lending rate in Bermuda stands at a crippling 6.5 per cent to 7 per cent as compared with as low as 2.5 per cent to 3 per cent in North America. To the uninformed reader, the numbers may not mean much, but at the end of the day they determine whether our monthly payments are going to be $2,600 or $4,500. The interest rate directly and dramatically affects the most costly expense that most of us have. Additionally, the interest rate has a great effect on the broader economy.

Although not an economist, I understand basic economics enough to know that in other jurisdictions when the economy falters, the interest rate lowers to stimulate economic growth. Almost immediately when a country is in recession, the interest rate decreases for the all-important housing market. Lower rates encourage businesses and consumers to borrow and buy things. Loans put money into circulation and raise the money supply, which supports an economic recovery.

Homeowners would be inclined to renovate or add on to their homes, creating hundreds of small construction jobs. This confidence returned to the housing market would result in a host of other positive spin-off effects for the economy as a whole.

I am mindful that the right balance has to be struck. As with any business, banks have to make a profit. They can continue making a profit by increasing the number of borrowers instead of overburdening existing mortgage-holders and preventing others from entering the market. The value of homes would also increase to compensate or even overcompensate for the reduction of the interest rate.

It is true that the Government has limited powers to weigh in on this, but those powers are not as limited as we are led to believe. Ironically, this was not the case when the Progressive Labour Party government stepped in years ago to help to rescue Butterfield Bank.

Throughout the severe economic downturn from 2008, the lending rate has remained unchanged at 6.5 per cent. Astonishingly, we were informed recently that rates were increasing “due to increased rates elsewhere”. However, our rates did not go down when the US prime rate went as low as 0 per cent and remained there for years in an effort to boost the American economy.

This is why it is necessary for the Government to wisely engage bankers on the issue of the interest rate. In the absence of a central bank in Bermuda, there needs to be a collaborative approach to addressing the problem. The Government needs to come to terms with the leverage it has and to be bold enough to use it. Not doing so has created a national problem with no solution in sight except to hope that we can tax our way out of it, decrease government services and to hope the global economy turns around enough to rescue us. While we hope and pray, the banks are making record profits and the Government is left to manage the unnecessary fallout of a stagnant to declining economy.

We continue to look outward to invite investment in. What about activating our economic power within? Let’s indeed look to Bermuda first. We are failing to appreciate that money goes where money flows. There is no bold vision or measures for economic recovery that matches the serious challenge to economic growth that we have been facing for the past ten years.

Ironically, the best existing hopes of economic stimulus that we can point to are the two projects started under the OBA government amid fierce opposition. The St George’s hotel and the airport project that were so vehemently opposed by the PLP before the election are the biggest economic projects occurring at present. Were it not for these two projects, Bermuda’s economy would be declining fast and furious.

In addition, in a little more than a month, hundreds of tourists will flock to the island for the ITU World Triathlon Bermuda. This is another OBA stimulus package that will put money in the pockets of Mr and Mrs Bermuda.

In contrast, the present government’s primary strategy for economic recovery seems to pin our hopes on creating committees to tell us what we already know and hoping that somehow tourists will come back in droves.

Unfortunately, we will be waiting for a long time while we are stuck in the posture of “paralysis by analysis”.

In the meantime, here is a sobering snapshot of our present economic reality:

• Between September 2017 to December 2017, retail sales have decreased consistently from between 0.3 per cent and 0.8 per cent

• Economist Craig Simmons stated: “The risk of a recession for 2018 is high ... unless we have a turnaround soon with retail sales”

• Building permits for 2018 are trending lower than last year’s numbers — 837 in 2016, 773 in 2017 and 126 to date in 2018

• A quick glance through the real estate publications will glaringly reveal that home prices are falling. A $1.5 million home is 2008 will likely sell for less than $1 million today

• Unemployment remains at between 7 per cent and 9 per cent

• The present government has predicted a 4 per cent increase in government revenue, which is highly unlikely, as there is nothing new on the horizon to stimulate economic growth

• It is inevitable that government expenses will be significantly over what the PLP has projected

• Leading economic indicators point to a recession this year. Lagging economic indicators suggest even higher unemployment

• Vic Ball was a One Bermuda Alliance senator from November 2014 to July 2017