President Petro has just announced his idea of the week. Remove the tax rule. He says he is stopping the Government from spending more and saving the economy.
What’s stopping you from spending more isn’t that rule. It is well documented that what is blocking the implementation of the housing, infrastructure and royalties budget is the incompetence of its teams, doubts regarding the My House Now policy, 4G and 5G roads, and oil royalties. As of October, only a small fraction of the investment in housing and infrastructure has been executed. In royalties there are more than 15 billion to be executed.
But even more strange is that President Petro does not stop announcing expenses: 1) he froze tolls, and that will require the Treasury to pay a gap of 500,000 million; b) it froze the SOAT and that created another gap of half a billion; c) the health capitation payment unit did not increase enough, and that created a gap in the EPS of 5 billion, which Minister Jaramillo asks the Treasury to cover; d) decided not to raise gasoline and diesel prices faster, and opened a hole of 20 billion in Ecopetrol and the Treasury; e) announced that the public university will be free, and Minister Bonilla must cover another gap of 1.7 billion; f) decided to maintain Duque’s short-sighted electricity tariff option, and did not distribute subsidies to the electrification companies, which opened a gap of five billion.
That is the truth: President Petro does not stop spending billions and billions every week. It is not understandable then that he comes out with the laughable announcement that they will not let him spend more. What if they left it. He would give away tomatoes in the market squares, salt and sausage in stores, and water and electricity in homes.
That is precisely why fiscal rules were invented. To defend the public budget and the finance minister from excessively generous and irresponsible leaders, who are giving away other people’s money left and right.
The president seems not to know how much a peso is worth and how difficult it is to produce it. Has he balanced a budget? Has it produced a good or service? Has it generated profits in a company?
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President Petro, in addition, beats those who do produce the pesos, pay the taxes and give so that the State and the leaders appear generous: the businessmen. He calls them slavers and exploiters.
The president must know that when businessmen do not produce and do not make profits, taxes disappear. In this circumstance, Minister Bonilla has no choice but to issue debt bonds. Taxes and debt are the only sources to pay for the president’s immense and generous heart.
Well, buyers of public debt bonds only believe the fiscal rule. They know that it is the only instrument accepted and seen by everyone, which orders the relationship between income and expenses of the Government.
Without the fiscal rule, the fertility of weekly gifts and perks would ruin the Government. In fact, as we are going, the year 2024 looks very complicated for Minister Bonilla’s accounts, not to mention what 2025 will be like. The tax reforms of Ministers Restrepo and Ocampo, nor the rise in prices, will not be enough for him. of the oil. He’s not going to get anything. As at the time it was not enough for Rojas Pinilla, the last irresponsible populist we had. The fiscal rule is the way to defend ourselves against irresponsible populists.
Dear congressmen, the time has come to verify if you have a backbone, or if in its place there is a piece of rubber that is used for bowing, kneeling, and serving as a mat for the executive. If they allow a health reform to advance that would open an additional gap of 12 billion a year, and contemplate destroying the fiscal rule, buyers of Government bonds will disappear.
The price of public debt will plummet to the ground as happened in 2022, and the interest rate that Minister Bonilla would have to offer to buy bonds from him will increase like that of Argentina, Nicaragua, Cuba or Venezuela. You will say in which country you want 50 million Colombians to live. The irresponsible country that the president wants to create, or the responsible one that we have inhabited for a century.
Minister Bonilla, a day in your life must be hell, adding up bills and accounts payable by the president and his cabinet. His greatest ally is the fiscal rule. You know it. It is the retaining wall of the budget dam. Without that wall, we would be inundated with debt and taxes. Do not admit that, due to a series of absurdities, they put an end to Colombia’s centuries-old tradition of fiscal responsibility.
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