Re: Lula in the shadow of Chávez

Patrick Bond pbond at sn.apc.org
Tue Feb 25 20:14:45 PST 2003


Funny, that's EXACTLY the crap argument Nelson Mandela listened to in 1994 (I worked in his office then and there was no end to the stream of DeLongite visitors...)

A great cartoon on precisely this nonsense by Nick Thorkelson is in the next Dollars and Sense... not that it would ever get to Berkeley econ dept.

----- Original Message ----- From: "Ulhas Joglekar" <uvj at vsnl.com> To: "lbo-talk" <lbo-talk at lists.panix.com> Sent: Wednesday, February 26, 2003 2:13 AM Subject: Lula in the shadow of Chávez
> The Economic Times
> Unlike in Venezuela, there is a viable scenario in which both visions -
> macroeconomic orthodoxy and greater social justice - can be realised.
>
> Suppose Brazilian interest rates stabilise at a high but not astronomical
> 10%, the economy grows at 4% per year, and the government achieves a
> "primary surplus" - a surplus of taxes over programme spending -
equivalent
> to 4% of GDP. These are all feasible targets; if they are met, then
Brazil's
> government debt will be a stable 60% of GDP.
>
> Once investors see that Brazil's fiscal policy is sustainable, and they
see
> continued low interest rates in the industrial core, Brazil will look more
> attractive. Foreign direct investment will flow in, bringing more access
to
> world-class technology and further boosting economic growth.
>
> Soon, Brazil's government would find itself able to roll over its
short-term
> debt on more favourable terms, as interest rates drop below 10%. Reduced
> debt-service costs would mean that the debt/GDP ratio would start to fall,
> and government spending on infrastructure, education, healthcare, and
> redistribution could rise. Reduced government debt would also mean more
> money available for private investment, providing a further boost to
labour
> productivity.



More information about the lbo-talk mailing list