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What is good for the United States, this time, is not it good for Brazil?  Jose Paulo Cooper asks

What is good for the United States, this time, is not it good for Brazil? Jose Paulo Cooper asks

With a speech of 100 days in the US Congress 1st, President Joe Biden concluded his first major efforts to not only recover the economy from the losses caused by the Govt-19 epidemic, but also to rebuild the country’s infrastructure and promote welfare in the United States.

Their plans, if taken as a whole, are intended to allocate nearly $ 6 trillion in use over ten years. This amount equates to approximately 30% of US GDP, and financing will, in part, increase the tax burden on wealthy companies and taxpayers.

It is unknown at this time what he will do after leaving the post. For one, focusing on the so-called infrastructure of the employment program will cost 2 2.2 trillion in 10 years. Third, the 8 1.8 trillion family plan, defined by the White House as a human infrastructure project. However, those who think that the Republicans will do so have already begun to deceive themselves, with stubborn opposition, making Biden’s reform efforts impossible.

These plans, according to opinion polls, have the approval of at least two-thirds of Americans. If this is already a strong point undermining the opposition, it is good to remember that the Republicans elected in the last election are vastly different from the extremists who supported Donald Trump.

Most likely, at least 60% to 70% of what is expected in Biden plans will be approved. More opposition is expected to tax reforms aimed at boosting revenue by raising corporate tax rates and higher personal income – and the program pays a portion of the costs.

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By focusing on the green economy, physical infrastructure, development and digital content, and free global access to early childhood education and community university education, the proposed programs are aimed at strengthening the middle class, with Biden re-establishing the American trade union structure based on this goal. A working group was formed to formulate recommendations that would lead to renewal.

There is no doubt that the Biden project is a development test in which the government plays a key role in stimulating investment. Its elements formulate a plan that opposes liberalization, characterized by tax cuts, market regulation and state contraction that have dominated for the past 40 years. The hypothesis that Biden’s reform, if at least successful, would curb this long cycle and restrict the state’s presence in the economy has pushed Brazilian liberals to the brink of a tense collapse.

The highest bet on the failure of the Biden plan. According to them, the plans announced by the new US president not only exaggerate public spending, but also do not care about the settlement of public accounts. Not to mention that they could be the trigger for inflation outbursts, they threaten future productivity with the help of incompetent companies, and moreover, they reduce the space for other packages in the event of new crises.

Even our bald liberals are pulling their hair out in the face of the possibility of a new wave reaching Brazil. According to them, even if it ends up working in the US, it may be good for the US now, but this time it is not good for Brazil. Washington is a big change with the consensus period, unrestricted markets and the handcuffed state, for the Brazilian liberals, what is good there will be better here.

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There is no denying that there are differences. Importantly, the United States is the global issuer of currency, while Brazil does not even have a convertible currency. The difference is that in the United States or in a global domestic crisis, money goes to the US market, while it flies from places like Brazil. However, the presence of strong Brazilian reserves on the hard currency mitigates this shortcoming somewhat.

It is also true that the interest rate on US debt is below the growth rate of the economy, except for the recent epidemic. This is the ratio of debt / GDP in the United States to a trend toward shelter, despite persistent general deficits. In Brazil, which has been experiencing long-term growth, even with interest in historical decline, this accommodation has occurred, but in a less favorable and less stable condition.

In a crude version, the most popular fear of being able to import a copied Biden plan without adaptation is inflation. But while the argument that Brazil has a history of hyperinflation and a debt default weighs heavily, the continued idle in the economy weakens the point. It undermines the fact that debt is concentrated in the local currency.

By confirming the failure of the experience of the “expansion summary” promoted under the government of Michael Demer, persecuted by wind changes, Brazilian liberals are, paradoxically, pointing the way to the eventual use of a Biden program in Brazil. “Americans take precautions to increase tax revenue”, They highlight.

In a final plan to increase public spending, why not promote a kind of “precaution” in Brazil? The answer of the Brazilian liberals is that this path is blocked by the interests of the protected sectors. They do not see how to release $ 400 billion annually in tax expenditures – subsidies, subsidies, incentives – as much as 5.5% of GDP. Or, like the United States, increase the tax burden on the rich.

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If it is true that the space for increasing public debt in Brazil is narrow, then higher taxes should be levied on those who can contribute more. Turning in this direction is not impossible, but for that, the American script that brought Joe Biden to the presidency must be followed, according to local conditions. It is necessary to get the approval of the community. This approval is achieved by electing a reform president and Congress. Without it, nothing is done.

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