Analysis | Income Brazil, dismantling the state and character

Last week’s economic controversy revolved around the way in which the federal government is making the “fiscal space” necessary for the payment of Brazil’s Aid, in view of the great barrier of the “spending ceiling”. After the group led by Artur Lira, at the Federal Chamber, Ciro Nogueira and some olive shades from the Planalto Palace had considered the most bizarre possible solutions, the brilliant articulators surpassed themselves and opted for an alteration to the roof rule.

“Glory! Finally the ill-fated, lame and unjust roof will crumble!” thought some of the serious people of this country. Obviously that was not the case. The proposed change only attacks the temporality of the Extended National Consumer Price Index (IPCA), calculated by the IBGE, to be considered in this fiscal rule.

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To clarify the matter for those who do not follow the economic debate so closely, the “spending ceiling” is a rule that establishes that the current budget of the Union can only be adjusted annually up to the inflation limit, measured by the IPCA, for the year ( last year. This 12-month interval of IPCA that was established in the rule is from July to June of the following year, a period in which, in general, the budget for the following year begins to be discussed. The team of bricoleurs, and their olive green shades, endowed with great planning capacity, in a touch of mastery, creativity and circumstantialism, decided to change the IPCA interval to be considered for January to December.

What’s the problem? Many. Starting with the explicit trickery: now, inflation measured by the 2021 IPCA is already at a level much higher than the target established by the National Monetary Council (CMN). If we consider the range initially forecast, between June/2020 and June/2021 we have an accumulated inflation of 8.35%. Inflation forecast for the interval between January and December already exceeds 10%. With this maneuver, it is estimated that an increase of approximately R$ 83 billion will be achieved, more than enough to pay the aid of Renda Brasil (temporary program that replaces a continuous, well-thought-out and structured State Policy, the Bolsa Família ).

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It is obvious that the need to pay emergency aid to the Brazilian population, which is hungry, food insecure and increasingly involved in the now, in the survival agenda, should not be called into question. his prospects for the future shattered. For this, that the necessary maneuver is performed.

This scenario, therefore, reveals the inhuman character of some fractions of Brazilians, who care little or nothing about the real life condition of their compatriots. It starts with the “brave economists”, those who are based on fanciful economic assumptions, who asked for the resignation of the Minister of Economy on account of the social “low ceiling”.

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The strange thing is that they didn’t resign when the roof was pierced to guarantee a “parallel budget”. They also did not resign when they came up with the brilliant idea of ​​postponing the payment of court orders, or even when the offshore Guedes and Campos Neto (president of the Central Bank). The operators of the “God market”, who work politically, on a daily basis, to have an exclusive State, as a guarantor of their financial income, are also inhumane.

And what about Paulo Guedes himself, who sees his speech crumbling, but sleeps hugging his position and its prerogatives? Finally, the fascist Bolsonaro and his olive-green shadows, which destroy a State Policy (Bolsa Família) to put in place an uncertain temporary Renda Brasil, the result of a maneuver, which shows itself as a turbocharged, budgetary and constitutional, and that the people’s hunger operates as an electoral asset.

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In fact, what became the Federal Constitution of 1988 in view of these bricoleurs, half bowl gambiarreiros that make up the Planalto and the National Congress? Amendment projects are approved as if the Constitution were a little house of cards. The result is a disastrous institutional snowball that is destroying the Brazilian state and driving the country into humanitarian chaos.

It is clear that the “spending ceiling” itself is a big problem, among many others, resulting from the dismantling of the state that has spread since 2015, which is nothing new for serious people in this country. Apparently, the average aid of R$400 will be paid. A possible relief for the population. Relief that will probably not have any appreciable effect until next year’s elections.

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Prices tend to continue rising, mainly due to fuels and the effects of the devalued exchange rate (caused by the combo that adds speculation, Bolsonaro, international energy crisis, Brazilian political scene, lack of economic policy…).

And unemployment will last, probably increase, as a result of increases in the basic interest rate and the consequent slowdown in the economy, which is already frozen. This, not to mention the flagrant and urgent energy crisis, let us say, of an economy that does not grow. Our hole seems to have no end.

*Weslley Cantelmo is an economist, with a master’s degree in geography and a doctoral candidate in economics at Cedeplar (UFMG).

**This is an opinion piece and the author’s view does not necessarily express the editorial line of the newspaper

Source: BoF Minas Gerais

Edition: Larissa Costa

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