Bankers have a duty to help dig Bermuda out of the mess they helped create, economist Craig Simmons told a packed lecture hall last night.Mr Simmons said banks — which he accused of lending and borrowing irresponsibly in the run-up to the recession — must make amends by giving entrepreneurs the credit they need to stimulate the economy.In a lecture entitled ‘Lessons Learned from the Recession’ at Bermuda College, Mr Simmons was also highly critical of Parliamentarians on both sides of the political divide.Government contributed to today’s economic woes by spending too much before 2007, he said, but Government’s critics have consistently overplayed the significance of that overspending.In truth, said Mr Simmons, politicians have nowhere near as much influence on the Island’s economy as they like to make out.He also had grave warnings of the likely adverse impact of austerity measures — pointing to social problems which followed such a tactic in the UK.About 300 people crammed into the lecture hall, with many standing in the aisles to hear the College lecturer’s thoughts on the economic crisis which has left Bermuda with public net debt projected to reach $1.41 billion by next March.Mr Simmons referred to Government’s $200 million guarantee to Butterfield Bank in 2009, which he said was made against losses incurred as a result of risky investment and leverage decisions.“Banks create money through credit,” he said. “That’s a privilege. With that privilege comes responsibility. They need to extend that responsibility in these current times by not cutting back on credit.“We have got to get spending going. Government is out of firepower, but how about the private sector?“We need to hold banks accountable for their irresponsible behaviour.“The Bank of Butterfield got a guarantee off us because of their irresponsible private decision-making.“They owe us. Given we were there for them in their time of need, why aren’t they there for us in our time of need?“The Government is going to have to turn back the spending, there’s no two ways about that.“But then there’s the private sector. By far the greatest spending in Bermuda comes from the private sector. I have faith that the private sector will respond.“Part of the private sector response has got to be related to access to capital.“The best friend of an entrepreneur is a crisis. We are in the middle of a crisis. I’m guessing these entrepreneurs see that and develop plans to take advantage of that.“What they need is the capital to make it happen, and that’s where I’m on about the bankers.”Reflecting on criticism of Government’s role in the soaring public debt, Mr Simmons said: “The Government is almost out of firepower. It’s a depressing thought.“We seem to be doing a lot of crying over spilled milk, like ‘if those guys hadn’t have spent the money things would be better’.”Noting the Irish government had made savings before the recession but still ended up suffering badly, he went on: “Even if you had a war chest, it would be empty now.“Those criticisms that coulda woulda shoulda — I agree we shouldn’t have gone on that spending spree, but that’s spilled milk. Get over it.“How are we going to get out of this mess? That’s the mature way to deal with it.”Asked by an audience member which political party had the best policies to claw back debt, he said: “Obviously we don’t want a business unfriendly party in power, and I don’t know that’s on the menu of choice in Bermuda today.“I think both of them understand how important tourism and international business is and they are going to do whatever they can to facilitate the growth of those sectors.“It’s the economy that’s going to nudge politicians to put in place the right policies.“I used to smile when the Finance Minister said, ‘It’s because of my sound economic policies that this Country is heading in the right direction.’“I used to smile and say, yeah right. It was people getting up and working to drive the economy.“When the recession came I didn’t blame the Government, because I didn’t give them the credit when things were going well.“They [politicians] are not the smart people. The smart people are in business.”Mr Simmons dismissed the idea of austerity as a means of clawing back debt.“It works to the extent that it gets the debt down, but as we saw in the UK last summer, social unrest is around the corner. You have got to be careful,” he said.“In the short-term, we can’t continue to spend like we spent prior to the recession. That much is clear.“But I would caution cutting back on spending, at least not right now. We need a medium-term plan of mild stimulus for the next couple of years.“If we take the austerity track, there’s a good chance that we are going to have social unrest in this Country.“Job loss is a traumatic experience. We need to recognise that. It’s like going through a divorce. It has social cost.“People like me tend to dismiss the social cost of a recession. That’s what they did in the UK and it bit them on the butt.“What I want to see from our politicians is an action plan.“Given that we have well over $1 billion of debt, let’s say it could peak at $2 billion. It’s not going to be paid off by 2020. You are looking at 2025. We need this long-term plan.”