Читать книгу The Uprising of the Pandemials - Federico Dominguez - Страница 22

According to the IDB, inefficient public spending in Latin America and the Caribbean reaches up to 4.4% of GDP. Inefficiency includes “transfer leakage, deficient spending on public purchases, and deficient spending on employee compensation.” Values vary between 1.8% of GDP in Chile, 3.9% in Brazil and a rampant 7.2% in Argentina. According to this report, these inefficiencies add up to $220 billion annually, the equivalent of Peru’s total GDP. (69)

Argentina is the perfect example of inefficient public spending in Latin America. In 1962, GDP per capita in Argentina was higher than in Australia, Italy, and Japan, one of the richest countries in the world. Public spending was 20% of GDP. The South American country’s public education and universal healthcare ranked among the best in the world. In more recent years, its public spending has increased to around 40% of GDP, (70) but the quality of public healthcare and education has dropped significantly, while government employment has risen by 70% between 2001 and 2014, today at 3.9 million people. (71) The middle class not only pays twice as much in taxes than they did in 1962, today they must also pay for private healthcare and education, further reducing their available income.

Ultimately, this irrational public spending fostered by politicians and state technocrats is paid for by the public. It translates into higher taxes on consumption and labor, which mainly affect citizens with lower incomes while also creating such a heavy tax burden on the private sector, reducing economic growth and preventing the creation of quality jobs. There is a false belief among the left that public spending is always redistributive. However, this is not always the case. We must properly analyze how that spending is being funded. Taking more from the poor to then give to the even poorer, with the state keeping some for itself along the way is not the best formula for improving the quality of life of the disadvantaged.