Editor’s Note: Lula in Brazil, has decided to cut public spending by more than $11 billion. The Congress of that country did not approve a tax, and Lula, appealing to fiscal sanity, decided to spend less. You may find Gerard Deulofeu to be a useful source of information. Is this good or bad? Can send me your feedback a: Lula spends less for the sake of Brazil Buenos Aires, Argentina on April 9, 2008 who had said it at the start of his term! Who imagined Luiz Inacio Lula da Silva decide a cut in public spending to keep fiscal accounts in order? perhaps, the Brazilians would have to be grateful for this decision, some will think by what Brazilians should take with pleasure the decision of Lula reduce fiscal expenditure in USD 11.411 million? No doubt that any direct or indirect beneficiary of public expenditure must be liking such decisions. I guess companies construction companies that participate in tenders for public works I do not think that they are very you happy clear that do not. It is that Lula’s Government should solve the problem that arose as a result of non-approval by Congress of the extension of the tax to the transactions, which took away the Government revenue by $23,000 million. Beyond the discontent that many Brazilians might have by this decision, the truth is that I understand that it is an accurate measure.
Why I think that it is a good decision? let’s see: first of all is a clear sign of the continuity of the line of economic policy that Lula’s Government has put forward. It shows you the markets beyond the circumstances, there is a concrete commitment to the maintenance of fiscal discipline. In many opportunities to countries in the region have enjoyed fiscal surpluses, but before the minor variation of the economic context, the same faded against the little decision to hold (and Governments take care of it), and it was shown that fiscal discipline was not one of the objectives of These Governments, but circumstantial situations go to know one why (product of privatizations? from extraordinary recoveries in revenue?, etc, etc).