Why can it be said that the payment of debts takes half of the budget

Ecuador's public debt, which was 100 million dollars in 1976, reached $ 2 billion in 2007, even though 7 billion had been paid by that date. That is to say that the Ecuadorian debt took, therefore, 30% of the country's budget, in theory, that had been paid "several times". In 2007, shortly after being elected president, Rafael Correa created the Integral Public Credit Audit Committee (CAIC) with the attribution of determining what the country's real debt was. The report, made with ample documentary evidence, identified irregularities and illegalities in the titles collected.

Rafael Correa presented the report to the population, obtaining immense political strength to pressure the creditors of the irregular debts to accept receiving from 25 to 35% in the maximum. Agreement that was accepted by 95%. The effects were felt quickly, social expenditures rose by 3%, unemployment fell from 10% (in 2006) to 4% (in 2015), with average inflation of 3,3 .

All these advances were possible when the State and the Ecuadorian people took back the budget and destiny of their riches. In addition, a budget letter, 2008, was set out in the Constitution, which sets priorities for investment in social sectors (health and education, for example) by 25% and was approved by the population.

In Brazil, the situation of the part of the budget destined to the payment of debt and interest is also dramatic. Every year, almost half of the public budget executed, that is, the one that is paid by the Brazilian state is destined to the payment of the debt, also, partly, of obscure and indeterminate origin, to the payment of interest and the amortizations of the debt. It is important that depreciations are accounted for because they are current government expenditures and serve as 'makeup' for public accounts, since the exchange of old bonds by new ones appears as rollover (payment).

However, the loans are taken to pay interest, which generates new debts, which have generated more interest to be paid with new debts. The situation is aggravated by the exorbitant interest rates in Brazil and stimulated by hyper banking in the country, and this causes a significant part of the federal, state and municipal public budgets to be compromised.

Considering these variables, the Citizen Audit initiative reproduced in a graph the official data of the SIAFI (Integrated System of Financial Administration of the Federal Government) in the exercise of 2016. The disparity is grotesque. We can take as an example the 43,94% of the Brazilian budget spent on interest and amortizations compared to the 0,08% for industrialization or the 3,90% used for the cost of all education. In the table of the executed budget, made by the Chamber also with SIAFI data, it is also possible to see that of the 2 trillion and 572 billion executed in the budget, the "Special Charges" expenditure was allocated the total of 1 trillion and 459 billion in 2016. While all other 27 items of the federal budget, including Social Security, total the other half. *

Budget Citizen Audit 2016

"But what is put to the population is that the problem is social investments. Being that each year more resources are placed for the payment of the debt and there is no counterpart, "warns the Economist of the Audit Citizen of Debt, Rodrigo Ávila.

The subject is complex and extensive and can not be dealt with in a single article or in a few seconds of speech, but it is the right and duty of society to discuss it, despite efforts made to the contrary by the press .

It is important to point out that defaults and instability in the delicate problem of the Brazilian public debt are not defended, not least because among its creditors are not only bankers, as you might think, but they are also part of the citizens who also concentrate all the savings of society there. The point defended by the leaders who have the courage to speak about the subject is only that, in the first place, the subject can be discussed without ideological mystification and that this is done in an open, transparent and balanced way with the interests of the majority of the population .

It is this priceless expense, the Brazilian public debt that consumes half of the budget, which Ciro Gomes has been questioning in a lively way in presenting these numbers, even with perplexity: "Let our people die like flies in hospitals with all the indignity because this 'can' ... but the banker can not fail to have exorbitant profits as is having today !? "

*O of the Union in focus : parameters, fiscal results and execution, p 92-93.

Know more: All Rights Reserved.

Leave an answer

3 × 5 =