Bolsonaro and the sirens' song

It would be important for the nation for the government to stop looking for easy, populist solutions to solve complex problems.

15.10.202011h42 Allan Augusto Gallo Antonio

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According to Greek mythology, sirens are creatures half woman and half fish, capable of attracting and enchanting anyone who hears them. Their number varied widely and, according to legend, they lived on a beautiful island in the Mediterranean Sea. Also according to the mythological account, the seduction provoked by the sirens occurred primarily through their singing. The careless sailors who were attracted by the beautiful song approached and ended up being taken to the depths of the sea.

The allegory of the sirens seems to have a Greek origin, but the tragedy of the shipwreck can take on very Brazilian contours, when populist measures seem to sound just like the sirens' sweet song to the ears of the political class.

In the most recent case, the enchantment seems to have started when the President of the Republic, Jair Bolsonaro, announced, on September 28, the creation of Renda Cidadã, a program that should replace Bolsa Família and several other income transfer programs. The 2021 Budget rapporteur, who also reports the Proposed Amendment to the Constitution (PEC) of the Federative Pact and the so-called “Emergency PEC”, Senator Marcio Bittar (MDB-AC), said that the program will be included in the texts under debate in the Congress. All of this represented a very bad sign, perhaps one of the darkest signs of the Bolsonaro administration so far.

With the institution of emergency aid through Law 14,018 / 20, the President of the Republic began to enjoy the approval of about 40% of the population, according to an Ibope survey released on September 24. It is undeniable that the chief executive already had a loyal support base, but the exponential growth in approval seems to be a natural reflection of populist measures such as emergency aid.

Apparently, there does not seem to be a large ideological component in this growth in popularity; it is a very simple and pragmatic calculation. Any benefit given - even if the future cost is perverse - gives those who were assisted the feeling that they have benefited from government action. Thus, it is easy to conclude that, in the context of one of the worst health crises in the last 100 years, where the economy is weakened and social and psychological pressures only intensify the damaging effects of the general crisis, the creation of government aid or even a perpetual assistance program such as Renda Cidadã is an indispensable ingredient for reelection. Lula knew that, Bolsonaro also knows.

The government's liberal and austerity platform is increasingly disfigured. The destruction of this platform, and the consequent launching of the country on the cliff of insolvency, seems to be the fault not only of the Executive Branch, but also of the Legislative Branch, with its latent corporatism; and civil society, who slept in a splendid cradle thinking that the “party” bill would never arrive.

It is not new that the Brazilian State is in bankruptcy. Just to give you an idea, the Ministry of Economy itself estimates that the primary deficit in government accounts should add up to R $ 787.45 billion by the end of the year, and this unpayable account will be pushed to the taxpayer. Added to this appalling account is the public despair of the Minister of Economy, Paulo Guedes, trying in every way to fit a new type of tax, described by many as a “new CPMF”. After all, what kind of liberal repeatedly proposes the creation of a new tax?

What is certain is that not only the Minister of Economy is listening to the siren song, trying to find easy and populist solutions to resurrect the bankrupt mass that is the Brazilian State. Bolsonaro follows in the same vein when he proposes the creation of a program like Renda Cidadã.

Any liberal, faced with the proposal to create a cash transfer program, asks only two questions: How much does it cost? Who pays? Well, it seems that so far the government has not been able to say how much the program will cost. It is estimated that, individually, the amount of the aid will be around R $ 300. Taking this amount as a basis and being very conservative, it is reasonable to say that the total cost is above R $ 30 billion annually, since only Bolsa Família , currently, it costs R $ 28 billion per year.

It is not difficult to conclude that an expenditure of this size will not be supported by the State, which is almost bankrupt. It is here that, once again, the president listens again to the siren song, because, to fund the patriotic yellow-green enterprise, the government signaled the idea of ​​putting a limit on the payment of precatories and rolling over the excess debt.

For those unfamiliar with the terms, a court order is a kind of request for payment of a certain amount, which the government lost in a lawsuit. In simple terms, it is the amount to be paid in any process that the government has lost. Currently, in Brazil, there are R$ 55 billion to be paid annually in court orders.

Part of the government's proposal to finance the Citizen Income program is to pay only R $ 16 billion for the precatories and roll over the other R $ 39 billion for next year. At this point in the championship, I believe that it goes without saying that, if the government really chooses to act in such a way, there will be interest incurred under the unpaid amount. In addition to the highly questionable moral component present in the decision to stop paying someone's rights, the government will push the debt interest account to the taxpayer (including the beneficiary of the Citizen Income program).

In a globalized context in which we live, where there is a deep dependency relationship between nations and wealth-producing agents, it goes without saying that the market reacted very badly to the government's announcement. But it couldn't be different. After all, who would decide to invest in a country where pushing debts "with the belly" is a recurring practice?

It would be important for the nation for the government to stop looking for easy, populist solutions to solve complex problems. However, I think that, like most liberals, there is little hope for that to happen. Finally, I quote the late diplomat, economist and school liberal Roberto Campos: “Brazil never misses an opportunity to miss opportunities”.

Allan Augusto Gallo Antonio is a lawyer, now following his master's degree in Economics and Markets, He is also a researcher at the Mackenzie Center for Economic Freedom.

Source: Gazeta do Povo -