war budget

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By Carlos Tautz*

If the private financial system in Brazil depends on massive injections of public resources, it is because it does not have the competence to establish itself

In the midst of a health calamity, Congress is appreciating the Proposal for a Constitutional Amendment that makes an ignominy official: PEC 10/2020 approved in the Chamber and being processed in the Senate allows the Central Bank of Brazil (BC) to become a business counter and use R$ 1,2 .19 trillion from public coffers. No, it is not to open ICU beds and buy automatic respirators for those infected with the coronavirus, nor to purchase personal protective equipment for heroic health workers, who are already largely infected with COVID-XNUMX.

Led in the Chamber by the neo-good people Câmara Rodrigo Maia (DEM) and in the Senate by the embarrassed Bolsonarist Davi Alcolumbre (DEM), the majority of Congress wants to allocate this mountain of money for all kinds of negotiations with banks and other financial agents. Namely: Bradesco, Itaú-Unibanco, Santander et caterva, and even the public banks Banco do Brasil and Caixa Econômica Federal, which since Michel Temer (2016) have been run as if they were private banks.

The transaction is murky, according to the Citizens' Debt Audit (ACD). The PEC “maintains the authorization for the Central Bank to act in the deregulated over-the-counter market as an independent agent assuming risks and losses from the banks without limit and without demanding any compensation from the country; maintains the use of public money for the purchase of bad bank portfolios, with a 100% charge to the National Treasury; maintains the transformation, into Public Debt securities, of trillions of reais in derivatives, bad debts and bad debt accumulated over years in the portfolios of profitable banks, which have already compensated for these losses through the provision deducted from their taxable income each year ”, evaluates the ACD. “There is no news of a similar operation by any Central Bank in the world!”, he completes.

The ACD assesses that the intention of Senator Antonio Anastasia's replacement (the same one who reported the 2016 impeachment process), after analyzing the Proposal that came from the Chamber, is to authorize the BC to operate in the "secondary market", where there is no regulation. If the PEC is approved, the Nation's resources will be wasted on “bad debts and rotten securities accumulated over years in the portfolios of profitable banks, which have even compensated for these losses through provisions deducted from their taxable income each year”.

Banks are thus trying to take advantage of the pandemic scenario with economic depression to make use of public money (had only a fraction of these resources been invested in zeroing out the shameful deficit of basic sanitation and completing the SUS as provided for in the 1988 Constitution, and hundreds of thousands of deaths that will result from this pandemic would certainly be saved). As you can see, deputies and senators support the banks.

These federal rascals surrounded the animal from seven sides. To avoid getting caught a posteriori proposed in PEC 10/2020 that, after the money has drained from the public coffers, accountability should be made not with a record of each individual transaction for the purchase of securities rotten by the negligence of private banking. Such provision, if any, will omit the names of those employees who, representing the BC, will have delivered the national money to the sharks of the financial market. Incidentally, employees who, after retiring or resigning, will probably take up a position in those institutions to which they transferred public money. Recently passed legislation grants immunity from them.

The worst – there is always a worst… – is that the assault on Brazil's reserves is supported by some of the pragmatic camp, self-proclaimed “leftists”, who replicate the arguments of the financial institutions. “There is a risk of a systemic crisis”, they parrot. Neoliberal Mimi. Many financiers rot their bonds in illegal transactions, deposit them in tax havens and even support the money from drug and arms trafficking. If they produce failed businesses, wipe out their portfolios and are terrified of admitting to their shareholders that they are going to record losses, that is, as they say, their problem.

Public resources must be used exclusively to guarantee the stability and security of the currency, aiming at economic development, full employment and radical income distribution, taking into account the needs of society as a whole (such as a robust SUS to face and overcome pandemics ). It's something along these lines that even the FED, the US central bank, does – and, it seems, that the pragmatic camp also wants to mimic the bullshit caused by these gaps.

In fact, the FED actually proposes measures similar to the War Budget. The difference between our case and theirs, in addition to the scale, is that the FED has exclusivity in issuing the dollar, the hegemonic money in the world, which finances its own debt by imposing its currency on the entire planet as a universal means of transactions . They do it because the US has a system of military bases spread across the planet and it gives good help to the system of guarantees. It is this financial and military binomial that makes it possible for the Fed to guarantee the purchase of any and all private debt on the US market, for any amount and without limit.

Zeroed the box? The FED runs the little machine. Does anyone disagree? We sent a drone and the NSA.

If Brazil's private financial system depends on massive injections of public resources, it is because it lacks the competence to establish itself. Darwinianly speaking, it would be much cheaper to nationalize it altogether. It's even less work, but certain economists in the pragmatic field have long since forgotten the desire for the impossible that makes revolutions possible. “Smells like communism”, you might think…

You should remember that in 1995 the then Tucano Minister of Finance, Pedro Malan, invented something similar to the War Budget. It was Proer, the Program to Stimulate the Restructuring and Strengthening of the National Financial System. Proer was planned to save the then Banco Nacional (from the coup leader of 64 Magalhães Pinto, former Governor of Minas Gerais) from bankruptcy. The BC intervened in the National Bank, injected a few billions of public money and, shortly afterwards, handed it over, cleaned up, to Unibanco, from the friendly Moreira Salles film family – by far the richest in Brazil.

Today, economists in the pragmatic field forget that Proer caused huge losses to the Treasury. Maybe they don't even remember who Malan was. Well, Malan, for your information, it is Chairman of the International Advisory Board of Itaú Unibanco since 2009.

*Carlos Tautz, doctoral student in history at the Fluminense Federal University (UFF), is editor of the Political Cortex.

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