In what is arguably the most surprising result produced by the Cayman Net News online polls, a significant 41.4 percent of local readers agree that some form of new or increased taxation is necessary to aid in the country’s economic recovery.

Yes, there was a majority of readers (55.6 percent) opposed to the notion of increased taxes but nowhere near as overwhelming an objection as one might have thought to such a generally unpopular concept.

Although there will be those that disagree, we would like to think that this means that a healthy percentage of the local population is aware of the realities of our current economic situation. If so, we hope that some of this realism will rub off on all of the country’s stakeholders – including all members of the government of the day as well as the opposition.

As things presently stand, the government’s principal economic policy appears to be holding off on paying its bills, which seems to us to be an astonishingly shortsighted approach that will only exacerbate the overall economic slump in the Cayman Islands.

Apart from the individual effect on many of the government’s vendors as well as this newspaper, the wider implications are rapidly becoming more apparent as major government construction projects grind to a halt, producing the concomitant redundancies and layoffs of local workers.

The government seems to be pinning its hopes on being permitted to borrow more money, but this is hardly a long term solution without at the same time addressing the means of repayment.

Yes, it might enable some desperately needed liquidity to be pumped into the economy but we are already in the region of a billion dollars in debt and borrowing another third of a billion on top of that is not solving either the revenue or expenditure situation.

Borrowed money is not income and neither is it free – the costs of servicing the proposed additional loans will only increase the government’s overall expenditure at a time when it should be cutting costs.

And, by the way, not paying bills is not a substitute for cutting expenditure.

It seemed to have been largely accepted just a matter of weeks ago that the government had to do two things: cut expenditure and increase revenue. However, those responsible, whilst perhaps acknowledging the concepts involved, appear to be resistant to applying them on any practical level.

If not by increasing taxes, duties and fees, how does the government expect to gain more revenue?

And we reiterate that borrowing money is not a long term substitute for revenue.

The prospects of any meaningful short term growth in either tourism or the financial sector appear to be slim to none at this point in time, so any corresponding increase in traditional revenue is just not going to happen. In fact it is more likely to continue to decline.

So where exactly is the new revenue going to come from in the short term that will enable the government to pay its bills and to service the proposed new loans?

If this in fact becomes a reality, and it is one or for that matter a consortium of local entities, at least this will be a clear indication that there is still confidence in this country’s ability to ride out the current economic storm.

The proposed new infrastructure projects, while substantial, will indeed put money into the hands of local workers and businesses to the extent that it is spent in the Cayman Islands in the first place but, again, this relies on a trickle down economic theory that will take far too long to be effective, when what is required is liquidity now.

However, at the same time as failing to bite the revenue bullet, the government seems to be in an equivalent quandary over expenditure cuts.

Again, we thought there was some sort of consensus that such public spending cuts were going to be inevitable if the projected budget deficit is going to be reined in, but now there appears to be considerable hesitancy over what will actually be done to implement reductions in government expenditure.

If the Cayman public at least in part recognises the need for increased taxation, it will certainly insist on corresponding expenditure cuts. The government cannot expect the long-suffering taxpayer to bail out a government that is itself not willing to make the necessary sacrifices.