EDITOR, The Tribune,

Both parties have it wrong in their apparent consensus that the way to deal with internationally driven inflation is to engage in belt-tightening at home.

The Prime Minister cautions consumers to spend less and thereby presumably save money (which they have never been able to do before, thanks to this country’s regressive wage and tax policies).

Meanwhile, the opposition predictably takes the view that government itself should be belt-tightening – the default position of a party that champions an economic model where the poor pay for the rich both in high consumption taxes and low social investment.

But on this they are both wrong. The inflation that we are seeing around us does not originate from any condition endemic to The Bahamas and it will not be tamed by any domestic sacrifice, public or private.

Where it harms us is in eroding the spending power of the consumer, which lowers both the standard of living and the prospects for further growth.

The only way to combat it is to boost aggregate demand in the public sector by keeping up spending and in the private realm by pushing more wealth toward the bottom of the income pyramid and into the hands of workers, whose spending drives the economy.

In other words, significantly increase the minimum wage, boost government spending and pay for it by increasing and shifting the tax burden away from consumption and onto wealth and income.

Anything other than this is either political rhetoric or plain fantasy.

ANDREW ALLEN

Nassau,

September 1,2022