By FERNANDO NETTO SAFATLE*
It is in the Constitution: audit the debt to identify illegalities and illegitimacy in the debt, promoting actions to review the debt process
For more than three weeks now, the Lula government has been trying to decide where and how much to cut in each area of the ministries. To this day, no consensus has been reached. Now the decision is to also include the military in an attempt to minimize criticism, especially within the PT, so as not to convey the idea that it is the poor who are footing the bill. In fact, the Lula government was trapped by Faria Lima in a false dilemma: either stay and the beast eats, or run and the beast catches. It fell into the trap, and there was no way out. Either it cuts spending, especially in social areas, or it doesn't, causing financial disaster and chaos. The pressure from the media is enormous.
The mainstream media insistently harps on the same thing, orchestrated by a single conductor, as if there were no way out, it were a one-way street. The economists called to testify are all linked to banks, none of them dissenting, to give the impression that there is no disagreement on this matter. Thus, without any opposing opinion, they are cornering the government. Lula, the only one who expressed an opposing opinion, said he was astonished to learn that more than 550 billion reais are spent on subsidies for rural and industrial entrepreneurs, while the government is falling apart to cut 20 to 30 billion reais from the poor. This without any compensation.
public debt
For example, there is no guarantee of job retention. He was referring to the tax relief approved by the government. Unfortunately, this is just a whining and lamenting, without any practical action. It is the eternal illusion that these things can be resolved in-house, at an institutional level. Well, these are burning issues, a true class struggle. Now, there is a battle for resources also between classes, the cutting of expenses. There is no single solution here, on the contrary, there are several solutions. However, they are untouchable. For example, the discussion about public debt. Why was it not discussed as one of the alternatives to cutting expenses? Because it is outside the spending cap and the fiscal framework?
Can social spending be cut, except for debt service spending? That is untouchable! The country currently spends 1 trillion just on paying interest on its debt. That is 47% of the public budget. Meanwhile, the fiscal deficit reached 105 billion as of September of this year. In other words, the country has resources, it is not a shortage, but it just spends almost half of them on paying debt service. When Getúlio Vargas took office in 1930, the government was faced with a huge debt, summoned his minister Osvaldo Aranha and ordered an audit of the internal and external debt. It was discovered that the first debt contract was made in 1824, especially with English banks, and then a succession of them came.
This debt was inherited from Portugal and transferred to Brazil. Most of the expenses came from the debt system itself, with exorbitant interest rates, fraudulent contracts, non-existent debts, abusive clauses, corruption, etc. This audit was divided into six phases. The first, carried out in 1932, was the suspension of debt payments. The sixth, in the early 1940s, was a significant reduction of 60% of the debt. With this cut, it was possible to promote the industrialization process, such as Petrobras, Vale, the steel industry and the restructuring of the state apparatus. The big difference in the investments made during the Vargas era and unlike the JK era and the military regime.
It was because while Getúlio Vargas obtained resources from domestic sources, the others were from foreign sources. This abysmal external debt led Brazil to a stranglehold, causing economic stagnation in the 80s. The governments of Fernando Collor, Itamar Franco and FHC had to hand over natural resources to foreign capital to pay part of the debt. Getúlio Vargas was the only government to audit our public debt. We had other experiences, but unbelievably they were vetoed recently. Another attempt to audit the public debt was made during Dilma Rousseff's government. Believe it or not, Dilma Rousseff vetoed it, as incredible as it may seem.
The proposal was made by PSOL deputy Edmilson Rodrigues. The project was approved by the National Congress with the participation of civil society entities. The veto was published in Official Gazette which provides for the planning of federal accounts. The justification was that the audit was already carried out by the Central Bank and TCU. What a lame justification!
The real reason, of course, was not this. Worst of all, the 1988 Federal Constitution provides for its implementation through article 26 of the Transitional Provisions Act. It defines its objectives very clearly, such as: analyzing the country's debt process; identifying illegalities and illegitimacy in the debt; promoting actions to review the debt process.
In other words, we have been failing to comply with our Constitution for 30 years! In his second term, Lula announced that he had paid off the debt with the IMF. Maria Lúcia Fattorelli, who is part of the Citizen Debt Audit, debunks this myth by stating that the debt with the IMF was simply transferred to other creditors. While abroad it was paying 4%, here at the time it was paying 19%. The external debt was replaced by the internal debt.
If we were to audit the public debt today, we would certainly find the same situation that Getúlio Vargas found in the 1930s, around 60% of our debt nonexistent. And why doesn't he comply with constitutional legislation and audit the public debt?
It's right there in the Constitution! A plebiscite is called and the discussion is open to the population to decide, and this way, they gain their support. Now, there's no point in being perplexed and trying to resolve this internal dispute with negotiations at an institutional level. These are issues of dispute over resources between classes that if we leave it to be resolved at the negotiating table, we will always lose.
It is an illusion to think that things will be decided, pure and simple, like that. The change in the correlation of forces will only be changed if it takes place in the streets. Politicize this issue and call for a Plebiscite to gain support and call on Congress to decide whether to audit the public debt. The resources to cover the deficit must come from the audit of the public debt. After all, the Constitution requires it!
*Fernando Netto Safatle is an economist. He was Planning Secretary of Goiás, during the government of Henrique Santillo (1986-1990). Author, among other books, of The political economy of ethanol (Mall).
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