LOWERING INFLATION MEANS THAT THE PENSION SYSTEM MUST BE ORDERED

The 2024 Budget presents implausible numbers. Even so, its calculations show that, when inflation goes down, pension expenditure goes up, making it difficult to achieve fiscal balance. This dilemma will not be solved by manipulating mobility again, but by putting the pension system in order.    (more…)

THE FEDERAL REGIMEN MUST BE PUT IN ORDER

Milei proposed to review the co-participation regime. Several governors rejected the idea, including the threat of resignation if the proposal becomes a reality. The evidence shows that, in order to get out of Argentina’s decadence, the ordering of the federal regime must not be postponed. (more…)

DEVALUING BADLY IS WORSE THAN NOT DEVALUING AT ALL

Devaluation is a painful remedy with no guarantee of success. Accompanying it with improvised and opportunistic measures led to a jump in inflation and the loss of government authority. The objective of improving the real exchange rate was not achieved and the risks of further inflationary acceleration increased.  (more…)

THE PENSION SYSTEM POSES MORE CHALLENGES THAN THE LELIQ

The enormous accumulation of liabilities in the Central Bank is a major constraint to lower inflation. But even more restrictive is the fact that, if inflation is lowered, pension expenditure automatically will rise. This cannot be solved by manipulating pension indexing but through a comprehensive reorganization of the system. (more…)

HALF OF THE PEOPLE VOTED IN FAVOR OF DISRUPTIVE CHANGES

The PASO (primary election) results show that people want deep and innovative transformations. It is an unprecedented political context that constitutes an opportunity to get out of decadence. The risk is that, due to ignorance of how the federal regime operates, “more of the same” may end up prevailing.       

(more…)

70% OF POOR CHILDREN HAVE SEVERE DEFICITS IN LITERACY AND MATH

The educational decline deepens. The presidential candidates signed the Commitment to Literacy. To avoid repeating old failures, the commitment should be that the Nation concentrates on improving the economy and jobs, and the provinces concentrate on improving educational management.        (more…)

HALF OF THE DROP IN SPENDING IS IN PENSIONS LOSS OF REAL VALUE

The government appeals to the inflationary adjustment of public spending, led by the loss of the real value of pensions. The main risk is that the next government will be tempted to maintain this same kind of adjustment to reduce the fiscal deficit. What must be done is a comprehensive reorganization of the State.        (more…)

THE NATIONAL STATE INCREASES GEOGRAPHICAL INEQUALITIES

The national state takes resources from the most productive areas and allocates them to CABA, the richest jurisdiction in the country, and to the poorest provinces, using the terrible instrument of co-participation. The solution is a new agreement between the Nation and the provinces to redefine tax and functions jurisdictions.        (more…)

FISCAL ADJUSTMENT CAN BE AVOIDED ORGANIZING THE PUBLIC SECTOR

With the worsening of inflation, a strong fiscal adjustment appears to be inevitable, although very much resisted. The alternative to balancing sustainably public finances, and simultaneously improving public management, is to impulse a comprehensive reorganization of the whole public sector.        (more…)

BY ELIMINATING OVERLAPS, THE FISCAL DEFICIT CAN BE ELIMINATED

The incident between the firms’ registration office and the PRO is very instructive of the consequences of not concluding the transfer of services from the Nation to the CABA. More broadly, to eliminate the fiscal deficit, it is key that the Nation stops intervening in CABA and provincial functions.        (more…)