It’s not a matter of reinventing everything or absolutely erasing the past, but we must be clear that what we have done during the last half-century, give or take, cannot be continued. In this period, governments across the world decided to guarantee their citizens certain benefits: education, health, social security, which have implied a very significant increase in expenses. Before, it was enough to collect 12 or 15 percent of the GDP to cover the administrative, defense, and criminal justice expenses that represented the work of government. Later, it became necessary to increase tax collection to levels of 45 to 50 percent to be able to have education for all, health for all, social security for all. In Mexico we liked the idea of giving benefits to everyone, but not the one about collecting taxes, so we never corrected our tax regime, and we continue with extremely low levels, 11 percent of the GDP, but still wanting to spend like Switzerland. We never could do it, but we did spend much more than we had, thanks first to debt and later to oil. That’s what has ended. That’s why it’s not possible to keep doing the same as always. There is no longer enough resources. Less still, as the PRI proposed in its Economic Recovery Law, wants to multiply subsidies and moneys turned over to local government. If there’s not nough for what we’ve always done, there’s much less for novelties.The basic gist of the column was that Calderón should spend less and collect more in taxes. We'll see what Schettino thinks of the specifics, but it seems like that's what Calderón is calling for: less spending thanks to the disappeared agencies, and new taxes on lotteries, beer, and cigarettes.
Wednesday, September 9, 2009
Schettino on Calderón's Budget
Writing the day before Calderón announced his economic package for 2010, Macario Schettino had the following to say: