Highlights – IV

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Comments on recent events

1. The international discussion on the taxation of billionaire groups grows every day, especially in Europe, but with some repercussions in the United States. It is even proposed to put an end to tax havens. This is a rather radical proposal, which came to light due to the generalized fiscal crisis generated by the pandemic. This debate should reach Brazil in some way, even if marginally, mainly due to the tax reform projects that are currently running in the Chamber and Senate.

2. Oblivious to this issue, Paulo Guedes proposed a new fiscal anchor based on the relationship between GDP (Gross Domestic Product) and public debt. This agenda opens space for the discussion of a very pertinent theoretical issue, which involves the controversy over the abstract character of money, with important practical implications for fiscal and monetary policies. The new quantitative theories of money [MMT], based on the experience of 2008, argue that it is possible to increase the amount of money in circulation without causing inflation. This thesis has faced enormous resistance in Brazil, mainly in the currents that support Minister Paulo Guedes.

3. The Ministry of Health's lack of planning in relation to health and the coronavirus persists, and it is regrettable, undermining the control of an epidemic that has already killed more than 50 people in the country. Comparing Brazil with countries with a higher housing density such as Vietnam with 253, China with 136, India with 328 inhabitants per km², Brazil with only 23 inhabitants per km² presents a much higher number in terms of lethality and occurrence of the virus.

This means that planning is lacking. One of the most concrete indicators of this is the damming up of resources from the Ministry of Health. According to the press, around 60% – on average across states and municipalities, including the Union – of these resources are being dammed up, not being used at the required intensity.

4. The departure of the Minister of Education to assume a post at the World Bank, in the United States, is a consequence of the MEC management crisis. ENEM was almost annulled last year due to unlikely data. There were numerous attacks on public universities without foundation. Unique opportunities were missed, as in the case of the fund worth one billion reais from compensation resulting from the Lava-Jato operation. The money was waiting for a basic education project that was not presented. In the meantime, with the pandemic, the resources went to the Ministry of Health. Such examples abound in the case of the MEC; offered resources that could not be obtained due to lack of planning. Interesting and ironic is that both the Ministry of Health and the Ministry of Education are being managed by interim ministers. Precisely the two ministries with the highest budget allocation.

5. The Senate has scheduled for the next few days the vote, after two years of processing, on the Basic Sanitation Law. If approved, the new legislation will contribute to the development of urban Brazil with the promise of investments in the next 20 years in the order of R$700 billion. The current contracts of public sanitation and water companies with city halls may be extended as long as they prove to be efficient. Otherwise, they will be interrupted and submitted to the new sanitation law.

6. Despite the frequent confusions, the current political crisis, with the co-option of the centrão, tends to have as its outcome the permanence of Jair M. Bolsonaro in the presidency. The ball is with the TSE and the STF. The government wears itself out, however, with ramifications that lead to illegal practices that are harmful to public order, such as obstruction of justice, concealment of evidence, money laundering, cracks, etc. that are being revealed every day by the press and by police investigations. It is a wear and tear that leaves the Bolsonaro government a little crumbling.

7. The workers' union centrals presented to the National Congress, on the 21st of June, a proposal for the post-pandemic scenario. The project envisions a national employment system; the return of professional qualification led by trade unions with resources from the Ministry of Labor and Employment; the offer of credit to small entrepreneurs; and proposals for economic recovery in the broad sense. It is a comprehensive and comprehensive eight-page document. Unfortunately, it has the ill will of the government, which practically destroyed or prohibited the existence of free unions and union centrals endowed with their own resources.

*Benicio Viero Schmidt is a retired professor of sociology at UnB. Author, among other books, of The State and urban policy in Brazil (LP&M).

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