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'Squaddie' is irresponsible

Published:Tuesday | April 20, 2010 | 12:00 AM

The Editor, Sir:

I had the opportunity to watch a taped version of the Opposition leader's contribution to the Budget Debate last week. Her delivery was, for the most part, very good, considering that Jamaica's Budget Debate is a formal political points-scoring exercise. However, Mrs Simpson Miller's example of the minimum-wage earner and 'Squaddie' has revealed why Jamaica is in the position it is in today. It highlights the very reckless and irresponsible ways that many of Jamaica's citizens live their lives.

Mrs Simpson Miller's presentation presents a policeman, who, before buying food, paying his utility bills, or even his rent, uses more that 66 per cent of his earnings on a car. It is important to note that a car is a depreciating asset, which provided no return on investment. In general terms, a car is a personal-use item that you should never buy unless you have the disposable income to pay for it.

In Squaddie's case it is obvious that he cannot afford a car. He has not secured a roof over his head and has not provided food for his household. In addition, he has not saved anything, so his children will have issues attaining higher education and may very well be in the position of Mrs Simpson Miller's first example, the minimum-wage earner. In addition, when the time comes for retirement he will encounter significant hardship if his only source of income is a government pension.

Stop borrowing

My message to Squaddie and Jamaica is simple: stop borrowing to consume. Things you cannot afford should not be bought. If you borrow to buy, make sure there is some sort of return in excess of the cost of borrowing, e.g., to invest in a business. Jamaicans like Squaddie should also be saving at least 10 per cent of their gross salary each month or week whatever the case may be, before anything else. This will allow them to have some money set aside for the proverbial rainy day. After which, taking care of their basic needs - food, clothing and shelter - is paramount. If there is anything left you can enjoy the niceties that you can afford, such as a car.

To answer the question that was asked in Parliament of whether Squaddie is living above his means, the answer is a resounding, "Yes!". Not only is he living beyond his means, he is downright irresponsible.

I am, etc.,