Government fiscal policy is a slow-motion disaster

Government fiscal policy is a slow-motion disaster
Government fiscal policy is a slow-motion disaster
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In the fight to keep alive the idea that it will be possible to eliminate the primary deficit without cutting spending, the economic team of Lula government Now try to blame the National Congress due to his own incompetence.

When he sold the idea of new tax framework to replace the spending ceiling, the promise was to reduce public debt by ensuring that the government spent only what it raised in 2024 (deficit) and even less in the following years (surpluses).

Cutting or optimizing expenses, however, was never among the strategies. Fernando Haddad, Simone Tebet It is Esther Dweck They always took it for granted that the invisible hand of the State would reach deeper into the pockets of Brazilians.

Third-party blame

Now, faced with the reality of a society exhausted by the Brazilian State’s fundraising efforts, they work to outsource the blame and not to solve the problem. Now, Brazilians saw the Union’s primary spending as a proportion of GDP (Gross Domestic Product) go from 14.7% in the last year of Fernando Henrique Cardoso’s mandate, to 19.3% of GDP last year.

Is the solution really to raise more?

Clear! Vocifera Fernando Haddad, hidden behind narratives about the super rich and other marketing slogans. Obviously, no one is against those who earn more paying more. It would be great, however, if this addition to the tax base made the burden of taxes a little less for everyone.

Deaf ears

Now direct the conversation to “fault” of the National Congress that approved fiscal targets, but doesn’t make an effort to make the accounts close. The economic team turns a deaf ear to the clear message that the government has to act on the area it controls: expenditure.

Cutting expenses, however, remains taboo. In a recent speech, the recently converted Simonte Tebet appreciated the possibility of opening extraordinary credit in the budget to allow for an increase in civil service salaries. It is the equivalent of incurring a lifetime expense of 50 reais per month after finding a 100 reais bill on the sidewalk.

There will be no zero deficit in 2024. No primary surplus in 2025. All the government is trying to control now is who will be to blame for the bad idea and worse execution. Until then, Brazilians will watch everything as if it were a car accident in slow motion.


The article is in Portuguese

Tags: Government fiscal policy slowmotion disaster

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