Brazil enacts extremely harsh austerity measures amidst a failing economy - Polidicks

[quote] Americans worried that Donald Trump will try to shred the nation’s social welfare programs can take some grim comfort by looking south: No matter what Republicans do, it will pale in comparison with the changes that are about to ravage Brazil. On Thursday, a new constitutional amendment goes into effect in Brazil that effectively freezes federal government spending for two decades. Since the spending cap can only increase by the rate of inflation in the previous year, that means that spending on government programs like education, health care, pensions, infrastructure, and defense will, in real terms, remain paused at 2016 levels until the year 2037. The cap doesn’t increase if the economy grows, or to accommodate population growth, or to allow more funds to care for Brazil’s aging population. Paulo Zahluth Bastos, an economics professor at the University of Campinas, [URL="https://www.theguardian.com/world/2016/dec/09/brazil-austerity-cuts-un-official"]estimates[/URL] that education spending per child will plunge by nearly a third and health expenditures per patient will decline almost 10 percent. The measure,[URL="http://www.dw.com/en/brazils-new-president-temer-unveils-austerity-measures/a-19280901"] introduced[/URL] by Brazilian President Michel Temer, includes a clause that says the earliest it can be revised is [URL="http://www.reuters.com/article/us-brazil-politics-idUSKBN12W4M4"]in 10 years[/URL]. If the government wants to overturn the amendment, it will require the three-fifths majority in Congress that was needed to pass it, a tall hurdle that Brazil’s fractious party system is rarely able to surmount. A number of analysts have compared the Brazilian amendment with other harsh austerity measures around the world — many of which were implemented by governments after the financial crisis in 2008 — and found that it appears to be without rival in terms of its severity. Laura Carvalho, an economics professor at the University of São Paulo, told me that while some countries do implement rules for limiting a growth in spending over time, none of them detach spending from growth in GDP entirely. That is, austerity plans don’t usually keep spending on things like hospitals frozen even when the economy starts growing again and generating more government revenue. [/quote] This is quite concerning when you dive into the details, and Brazil is in a pretty bad situation with an unemployment rate of around 12% and a GDP that's been in decline since about 2011 (was about 2.5 trillion, now 2.25.) There's violent protests as well apparently [URL]http://www.vox.com/world/2016/12/15/13957284/brazil-spending-cap-austerity[/URL] alt source (vox is pretty editorialized): [URL]http://www.dw.com/en/brazils-new-president-temer-unveils-austerity-measures/a-19280901[/URL]

u had a decent run [highlight](User was banned for this post ("Shit Posting, Again - Next is a perma" - UncleJimmema))[/highlight]

"No matter what the Republicans can do. It will pale in comparison..." Bitch you don't know, we haven't even defaulted yet.

austerity only works (and should only be considered) during times of a growing healthy economy, even the IMF of all groups has turned away from it. gonna end up like greece after troika forced their shit through.

Just kill me now please why do I have to live in this shithole

shit.

Projecting budget so far into future is absurd, world and economic conditions can change plenty during that time. The only way this makes sense to me is blocking changes in future when electorate swings left again, making them completely impotent and making Temer's half-year tenure effectively last much longer. Writing a certain budget into constitution is ridiculous. The way I can see it, this measure starts to be effective over five years or so, not next year. This does nothing to address more relevant problem of corruption and Brazil's low taxes on the wealthy. [quote]Brazil’s tax code is extraordinarily generous to corporations and the wealthy, and helps buttress its status as one of the world’s most unequal countries. Brazil’s highest income tax rate is just 27.5 percent — for comparison, US tax rates go up to about 40 percent, and in Scandinavia they can exceed 60 percent. But Brazil’s tax code is especially regressive because of loopholes like the 1995 personal tax exemption that allows people to be shielded from income taxes if they own a company under certain profit investment conditions. Much of Brazil’s elite set up companies for themselves and channel the money they make via their livelihood through them. The result is that most of the income of the very rich in Brazil is not subject to personal income tax. Carvalho estimates that if you closed tax breaks for corporations and the personal tax emption that the rich exploit, “that would cut the fiscal deficit projected for next year by half.” [/quote]

The poor are once again utterly, utterly fucked, every reform and change being done affects solely the poor and the middle-class, and not the rich, in fact it actually benefits them in quite a few ways, and i wouldn't be surprised if we ended up going back to the old days like in 1998 where children were dying of hunger by the hundreds DAILY across the country(something our previous government was for better or worse, extremely effective at improving), with unemployment skyrocketing(again, just like the last time we had austerity measures implemented). It's also worth mentioning that the reason we're in this crisis is because you can't govern Brazil without appeasing the elite(and the congress which is hilariously corrupt), our previous government basically threw money at them to keep them happy and still make some minor redistribution and social improvements, and they were still back-stabbed by them.

[QUOTE=Vlevs;51546675]Projecting budget so far into future is absurd, world and economic conditions can change plenty during that time. The only way this makes sense to me is blocking changes in future when electorate swings left again, making them completely impotent and making Temer's half-year tenure effectively last much longer. Writing a certain budget into constitution is ridiculous. The way I can see it, this measure starts to be effective over five years or so, not next year. This does nothing to address more relevant problem of corruption and Brazil's low taxes on the wealthy.[/QUOTE] IIRC they can overturn it with a 2/3rds vote but uh good luck with that.

what a rediculous notion. theyve basically relegated the country to poverty and collapse for the next 20 years by effectively kneecapping the governments ability to remain flexible

[QUOTE=Wizards Court;51547007]The poor are once again utterly, utterly fucked, every reform and change being done affects solely the poor and the middle-class, and not the rich, in fact it actually benefits them in quite a few ways, and i wouldn't be surprised if we ended up going back to the old days like in 1998 where children were dying of hunger by the hundreds DAILY across the country(something our previous government was for better or worse, extremely effective at improving), with unemployment skyrocketing(again, just like the last time we had austerity measures implemented). It's also worth mentioning that the reason we're in this crisis is because you can't govern Brazil without appeasing the elite(and the congress which is hilariously corrupt), our previous government basically threw money at them to keep them happy and still make some minor redistribution and social improvements, and they were still back-stabbed by them.[/QUOTE] I'm kinda surprised there hasn't been (more) rioting over this kind of shit, especially in a country where poverty is such a widespread issue to the extent you have favelas and shit.

[QUOTE=GordonZombie;51549455]I'm kinda surprised there hasn't been (more) rioting over this kind of shit, especially in a country where poverty is such a widespread issue to the extent you have favelas and shit.[/QUOTE] Actually the riots are getting worse, but there isn't a significant participation from the brazilian poor in the protests, our poor are awfully passive when it comes to these things(as well as incredibly uninformed, which is by design, since our media is owned by a few extremely rich families who benefit greatly from that), it doesn't help that our dictatorship from 64-85 and said media did an amazing job at keeping it that way, things are changing slowly with the newest generations and the internet though, unfortunately we still have a sizable segment of our middle-class which are EXTREMELY reactionary(basically part of the "traditional" middle-class which mostly originated from the dictatorship and before, not the new one created under the previous left-wing governments), combined with the fact that the average brazilian is quite conservative socially which led to the right-wing(especially christian hard-right which manage to be worse than the american one by far) gaining a lot of power in the congress and the left-wing losing half of it's seats, however this same segment is actually very supportive of left-wing economical policies(kinda hard not to, when 61% of the population is poor or worse), the only ones who are against it are unsurprisingly, the old middle-class(and the a fair share of the rich) which have a fuck you got mine attitude regarding that, so our current president isn't legitimate in any way, and it's doing literally the opposite of what most people want and what it was elected to do. Also, there is a very real chance we'll have a SECOND impeachment, cause there is growing insatisfaction against the current president, plus the fact our elite want to basically destroy as much of the brazilian welfare state and worker's rights as possible, so if he is impeached in 2017 or 2018, there will be indirect elections, which will result in our incredibly corrupt and reactionary congress electing someone horrible for the position to achieve that, but who knows if they'll succeed though, there is currently an arms-wrestling between the powers of the legislative(who are shitting themselves because pretty much everyone is corrupt and the lava-jato investigation is getting closer), the judiciary(which are probably involved too and want to keep their MASSIVE salaries and other benefits too which is actually against the law, since many of them earn more than the president which is illegal) and our public ministry(which is responsible for the lava jato investigation and has enormous support from the population at large and is currently having delusions of grandeur and trying to increase their power and reach at any cost), seriously you could write a series or a few movies with that shit, no wonder netflix is going to make a series based on it. :v: unfortunately they hired a quite reactionary dude which will probably glorify the investigators(which are breaking the law left and right and stepping all over the constitution, but never mind that). :suicide: TL;DR everything is fucked up, and it will probably get a lot worse before it gets better.

yep because shrinking your GDP even further by cutting government spending is gonna turn the economy around

[QUOTE=cis.joshb;51550581]yep because shrinking your GDP even further by cutting government spending is gonna turn the economy around[/QUOTE] Though, increasing spending like many countries do during crises isn't a terribly good option either right now from what I know, because their debt is already pretty high and they don't have access to cheap debt. (they added so much in just a couple of years that their credit rating is terrible) They've basically just stumbled into a horrible situation that should have been prevented in the first place, and they probably will have to suffer it out unfortunately. They probably should have done something like this a bit more delicately though, because it will be quite wantonly destructive with effects such as brain drain. Also an opening for guys like Jair Bolsonaro to run for president who is... I don't even know where to start, I'd just tell you to look him up and find out for yourself.

AUSTERITY. IS. BULLSHIT. It's a smack in the face of mainstream economic practice, its frequently denounced by prominent economists and there's endless examples of it failing hard when put into practice.

[QUOTE=CrumbleShake;51551591]AUSTERITY. IS. BULLSHIT. It's a smack in the face of mainstream economic practice, its frequently denounced by prominent economists and there's endless examples of it failing hard when put into practice.[/QUOTE] While it's caused suffering here it appears to have somewhat worked for us. But certainly I would have preferred much different policies and an actual focus on the consequences of those policies - such as the fact we're facing a housing crisis.

Can't decide if Brazil or Venezuela has it worst. Probably the latter.

[QUOTE=Maksie99;51555900]Can't decide if Brazil or Venezuela has it worst. Probably the latter.[/QUOTE] Latter by far. They have some similar reasons for getting here but Venezuela is hurting much more.