So Brazil just put through a constitutional amendment which will cap public spending for the next 20 years!
Spending will fall inline with inflation.
Pretty drastic move - economy is in the shits, so radical moves are needed...but, 20 years!!!!
And we all know when stuff like this happens...health, education and welfare are hit hardest.
This Constitutional Amendment is not all bad, it will make that the public spending don't skyrocket as we've seen for years until now. People keep saying it will take money away from Education and Health, but it won't. This year's budget for those two are were cut by billions, in scale of 20% (if I'm not mistaken) of all budget and this measure wasn't even applied. It happened because spending and corruption was out of control, coupled with the commodities decline, ruined everything.
If we have 12% inflation this year, that means next year's budget for all public administration can have a increase of maximum 12%. It would awful if we had opportunity to increase health and education by, say 20%, but couldn't due to this CA (I'm not certain, but if Congress aproves it, the budget can be risen for these areas). That most certainly won't happen, the money is not there to do it, and even if it is, to make sure it gets done is a whole other problem.
The problem in my opinion is that this measure have to be coupled with other measures, like the debit serving and it's analysis urgently. Has to do with at the same time this gets approved, the new president gives judges and prosecutors 40% raise. At the legislative houses there are no costs cutting for the congressmen, nor shrinking of their aides. They don't address the super salaries of judges and politicians that earn 2 or 3 times the salary cap and things like that. This measure will solve nothing by it self.
Welfare in Brazil is another huge problem. Not only there thousands of cases of fake benefits, as there are very few investments in education, there's a huge increase in the so called "nor-nor" generation. Young people that Nor study, Nor work. They just collect benefits indefinitely.
And there's another huge caos with retirement and social security.
The Olympics and World Cup were absolutely shambolic for Brazil, they should've never have taken place here, I think I even said it before. Major Cities can't pay their workers, crime is spiking and poverty coming back with a vengeance.
Populism and corruption destroyed Brazil. Things are really bad, and I think they'll get worse, before it gets better.