OPINION: Magicians to handle public debt

f you spend more than you earn, you have to go into debt to pay it. The Ministry of Economy and Finance (MEF) has said that the Government intends to spend $766 million more in 2021 than it budgeted for in 2020. By magic, our government will be able to spend 3.3% more seamlessly. And the deficit? And the debt? We also want to drink from that cup. Interestingly, in the press release, the ministry indicated that “the limitations on the budget are real and the current room for maneuver is narrow, given that the size of the budget is influenced in a significant way by income.”Limitations, it reads, luckily! The spreadsheet supports everything: you put in the amount you need and – soon! – the economy and revenue grow. Apparently someone has an ace up their sleeve.

Fiscal deficits involve debt. More debt means more interest that, without cuts in expenses or increases in income, carries more debt. And we will definitely need magicians to avoid creating a snowball of unsustainable debt. But, as Keynes pointed out, what does it matter if, “in the long term, we are all dead.” LA PRENSA, Jul. 31