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Macroeconomic Policy and Democracy

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Simon God, Associate Professor IP Unikamp. Senior Research Fellow at CEBRI and Chairman of the Board of IFFD

Rogerio StudartSenior Fellow at CEBRI and Former Director of the World Bank Group and IsDB

At its last meeting, the Monetary Policy Committee (Copom) of the Central Bank of Brazil (BC) decided to keep the base interest rate at 13.75% per annum. reported that the decision was based on projections that inflation should slow down — from 5.8% in 2022 to 4.8% in 2023 and 2.9% in 2024 — and move closer to the target. However, this signaled that it is monitoring a range of risks that may be associated with the relevant horizon (18 months) and assesses that a permanent increase in public spending, as well as uncertainty about its future trajectory, could dampen expectations, which could demand a further increase in interest rates.

In a recent event in which he commented on the decision, British Columbia’s director of monetary policy, Bruno Serra Fernandez, was asked about the amount of the tax exemption the monetary authority would accept. Fernandez did not answer, preferring to recount an incident that happened in England with the government of Liz Truss, who lasted only 44 days in power. For the director, the Truss government was punished for not adopting an economic policy that he believed would worsen the country’s financial situation. The punishment took the form of financial instability: the devaluation of the pound sterling, the fall in share prices and a sharp devaluation – by 23%, which became the epicenter of the crisis – British government debt securities (gilts) traded on the market. While Brazil’s president-elect is negotiating with Congress on the best way to align the fiscal year 2023 budget with the commitments made during his campaign, what happened in the UK actually calls for a deeper discussion.

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More like a disclaimer. We are not here defending the economic policies introduced by the former prime minister, based on the idea that tax cuts, especially for the richest, should boost growth. On the contrary, for reasons which one of the authors has already discussed in another articleIn view of the growing, “self-reinforcing” and immoral inequality of income and wealth that is observed in the world, regressive tax measures are undesirable and cause deterioration of the social fabric. In addition, there is ample evidence of the ineffectiveness of the so-called supply side to accelerate growth.

But back to the version that the Liz Truss government fell because it was punished by the market. Apparently, this is not the only interpretation of events that are already being investigated. AT recent article entitled “It wasn’t the markets that brought down the track. It was the Central Bank of England (BOE).”, economist Narayana Kocherlakota, professor at the University of Rochester and former president of the Minneapolis Fed, who has a deep knowledge of the subject, says that the crisis in England is associated with two huge failures of its central bank.

For Kocherlakota, the Bank of England was an ineffective regulator of the markets, simply watching, without doing anything, the rapid growth of speculative activities of British pension funds, which in the short term became indebted to buy long-term government debt securities. As their price began to fall, a mismatch in fund balances forced a massive sale of securities in the portfolio to meet margin requirements, which made the situation worse. The second and decisive failure of the Central Bank of England was to deal with this instability. Having made the necessary intervention in the market, buying securities and maintaining prices, he announced that his intervention would be for a limited period, fixing the day when it would end. The overlap of these two errors led to a major crisis with a political weakening of the cabinet, making a newly sworn government impossible. Having asked Stumbling into the press about the Bank of England’s role in the downfall of Liz Truss, its chairman, Andrew Bailey, defended himself. But the case is far from closed.

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As concerns are often raised in Brazil that fiscal imbalances could worsen inflationary expectations and lead to an unsustainable debt trajectory, and parallels are drawn with what happened in England, its basis needs to be discussed. International debates on macroeconomics have unfolded both in scientific circles and in the specialized press. There is far from being a consensus on the existence of a causal relationship between the growth of debt and the acceleration of inflation. Their uncritical acceptance in the country is due to the fact that they have become set of beliefs– without empirical support – which dominates the national economic debate and prevents substantive issues from being discussed.

The first, perhaps most important, of these beliefs is that the main obstacle to growth is the size of the state. The second is “expansionary economics,” that is, the belief that cutting government spending, in addition to being a guarantee of low and stable inflation, is the way out for renewed investment, growth, and the reduction of unemployment and inequality. It is also believed that in order to finally guarantee austerity measures, it is necessary to imprison “Leviathan”, an argument that served as the basis for the constitutional cap on spending.

Brazil is in a deep social crisis with 33 million people suffering from hunger and 61 million Brazilians facing food insecurity FAO data🇧🇷 And we cannot forget that our democracy is under threat. It is critical to overcome these two crises through an inclusive and sustainable growth recovery. There is an urgent need to structure projects – in infrastructure, logistics, agriculture and green reindustrialization – that could be the seeds for a new wave of public and private investment. Here are the challenges and questions to guide the debate. Possible financial problems can be perfectly resolved by the Central Bank, which is responsible for ensuring the proper functioning of the financial markets in the country.

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Beja County President. “PSD wants to have more political weight in the region in 2025”

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Beja County President.  "PSD wants to have more political weight in the region in 2025"

Gonçalo Valente, re-elected November 26 with 96% of the SDP activists in Beja, says the region “needs” to have social democrat-led city councils.

What made you re-run for president of the Beja constituency for the SDP?

I have never hidden the great love I have for my region, and as soon as possible I responded positively to the challenge of the SDP in the sense of helping the region in its weaknesses. This is exactly what I have been doing since 2019, with the activation of the JSD, several sections of the JSD district, the PSD section in Almodóvar, with the election of more representatives to the municipalities, with the restoration of many militants who were aloof from the participation policy. We also managed to reach a critical mass for a more active participation in the party. In short, I can say that the motive for my re-election was precisely the opportunity to continue the work that my team had already done and which was reflected in the percentage of votes that we were able to get in this election, 96%.

What is the highest priority for this mandate?

Unite people and ideals in the sense that we can create conditions for increasing political weight in the region from 2025. I believe that “the path is paved by walking”, and also that there is still much to be done in the area. At the moment we have many needs that need to be pointed out and it is vital that we continue to fight for them, among which I highlight the need for more continuing care units and the lack of health professionals. Our hospital is the only district hospital in the country that does not have an MRI machine. We have to improve the Beja airport and we need to electrify the railway. We need a motorway connection to Beja airport and we also need to benefit from the “triangulation” of Porto de Sines-Alqueva-Beja airport which is underused. Thus, it is a set of priorities that complement each other.

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“Just as I believe more in the sociology of the field than the secretary story, I also believe that in order to help people, we need to be closer to them.”

He says he wants to “leave the party where it deserves to be, run for election to win.” What is your strategy for this?

First of all, I must emphasize that I want to run for elections in order to win, exclusively for the region, and not power for the sake of power. PSD is the means by which we propose to improve the lives of the inhabitants of the Lower Alentejo. Therefore, we must always remember that a political party is the best tool we have at our disposal to better serve the people who are the true center of political action. My strategy involves a deep knowledge of the needs of the area, because only in this way can we arm ourselves with the most appropriate means to solve the problems and challenges that currently exist in the area, and there are quite a few of them. I intend, in line with what I have always done, to maintain a transparent and serious attitude so that people continue to trust us. Just as I believe more in field sociology than secretary storytelling, I also believe that in order to help people, we need to be closer to them. We have to experience their problems and really feel what people feel.

Do you think there will be conditions for the SDP to again lead the city council in the region in 2025?

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Of course yes! I am sure of it, and I also feel that the region has such a need. And from what I’m diagnosing, people now more than ever are aware of this shortcoming.

In Beja, the SDP-led coalition serves as a “balance point” in the PS-led executive with the same number of advisers as the CDU. How do you rate the performance of Nuno Palma Ferro?

Councilman Nuno Palma Ferro, with nobility and great responsibility, performed the function, as he rightly said, “the keeper of the balance.” He showed great accessibility and commitment to someone who loves his land. Without departing from social democratic ideals, he managed to give priority to what his municipality really interests – its development.

Did Luis Montenegro bring new enthusiasm to the party?

Luis Montenegro showed himself as a leader close to the structures and bases of the SDP, but, in fact, to the Portuguese. He was sharply opposed, reacting in a timely manner to the actions as well as to the inertia of the government, often putting pressure on him to take measures that he considered necessary for the good of the country.

Looking at the region, what worries you the most?

Undoubtedly and in general terms, territorial discrimination! I’m talking about oblivion, for which the central government constantly votes for us. Sometimes it seems to me that Alentejo as a whole is part of another country, different from the one that so often lives only by three F’s: Fatima, Football and Fado. And what a sad fate we have that without stadiums and patrons we fall into oblivion so many times. From a practical point of view, my main concern is the exodus of people from rural areas, which is a direct consequence of the aging of the population and the decline in investment in the region.

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Carlos posted a photo of Bolsonaro’s legs with a mug

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Carlos posted a photo of Bolsonaro's legs with a mug

alderman Carlos Bolsonaro (Republicanos-RJ) posted today (4) on her Telegram channel a photo of the president’s leg Jair Bolsonaro (PL) com erysipelas, skin infection🇧🇷 According to the president’s son, the picture was taken “a few days ago.”

“My father developed an erysipelas on his leg. The photo was taken a few days ago. I was informed that at this stage he is already in the process of recovery and everything is going very well, ”the president’s son wrote. The publication did not allow user comments.

erysipelas is infection considered more common in people with circulatory problems or diabetes🇧🇷 The infection settles in the deepest part of the skin and is characterized by red and painful plaques. The condition mostly manifests itself in the legs – as in the case of Bolsonaro, according to his son.

The wanted adviser to the Palais Planalto did not comment on the publication of the president’s son. The federal government has not officially commented on the matter. The NGO Transparência Eleitoral Brasil even demanded greater clarity in the disclosure of Bolsonaro’s health..

December 4, 2022 – Message released by Councilor Carlos Bolsonaro on the condition of President Jair Bolsonaro’s leg, which has erysipelas.

Image: Reproduction / Telegram

After the elections, Bolsonaro remained silent and did not interfere in public affairs. Initially, the president’s associates claimed that this was due to erysipelas, but, as the observer notes UOL boy Alves, friends of the president are concerned about Bolsonaro’s behavior.

“He believed that there would be some change in the political scenario, in connection with demonstrations at the barracks and on the highways, but I think he realized that this was not possible,” expressed the opinion of a friend of the president who was with him last weekendat the graduation of cadets in Amana (Military Academy Agulhas Negras) in Rio, and who maintains frequent telephone contacts.

During the meeting, Vice President and Senator-elect Hamilton Murao urged Bolsonaro talk to your people, but the President left without speaking to supporters. According to the report, the closeness of Lula’s (PT) diplomacy as president-elect worsened Bolsonaro’s condition. UOL.

According to people close to him, the anticipation of Lula’s diplomacy, scheduled for December 12, made Bolsonaro feel even more depressed. “As the change of government approaches, he notes that the situation is irreversible,” said the politician, who was recently with the president.

The president’s isolation is also reflected in the virtual environment. As the WOL showsin November, Bolsonaro posted three times on Instagram and four times on Twitter and Facebook, in addition to abandoning the traditional Thursday life.

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The Venezuelan opposition demands from Maduro the date for the resumption of political dialogue – 04.12.2022

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Germany sentenced Russian to life imprisonment for political murder by order of Moscow - 12/15/2021

CARACAS (Reuters) – The Venezuelan opposition has asked President Nicolás Maduro’s government to set a date for the resumption of political talks in Mexico that could ease the country’s long economic and political crisis.

Delegates from the government and the opposition met in Mexico City on November 26 after more than a year’s break and signed a “social agreement” but did not announce a date when they would meet again. The opposition said it would meet with the ruling party in December.

The government is “setting new conditions to move forward on the political issue,” the opposition said in a Twitter statement released Saturday afternoon, but did not provide details of the new official requirements.

The head of the opposition delegation, Gerardo Blyde, said this week that the talks will enter a difficult phase, including political and human rights issues.

The Venezuelan Communications Ministry did not immediately respond to a request for comment.

“We demand that Nicolás Maduro not delay the commitment made in Mexico and proceed immediately to set a date, during December, to continue negotiations on a political and free agenda, as agreed,” the opposition said.

(Reporting by Vivian Secker)

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