2023-04-30 00:03:09
Another day I spoke to him about the mess caused by the flood of economic data with which current events bombard us daily and how difficult it is to extract from them an accurate image of the real situation. Well, this week has been a magnificent example of this. We have had employment data, where we see that, in the first quarter, we have lost more than 100,000 jobs, as highlighted by the opposition or, if you prefer, the best quarter in the last 15 years, as the Government recalls. We have seen that growth has been a meager 0.5%, which makes the promise made on Thursday by Nadia Calviño to bring forward compliance with the stability rule regarding the deficit one year more difficult. The vice president insists that the growth of the Spanish economy is solid, but she forgets that we are one of the very few countries in the EU that have not yet recovered the pre-pandemic level, which eliminates us as an example. We have also known the inflation data. Here, and unlike with employment, we compare ourselves with an advantage with our partners, as long as we forget that, once the base effect has been reduced, inflation has risen again, complicating the relaxation of the monetary policies that have pushed the clouds to interest rates which, in turn and all together, have reduced the purchasing power of Spaniards by just over 5%. In short, are we going well or are we continuing downhill? I don’t know, what you decide. For this reason, because of how difficult it is to draw dispassionate conclusions from the torrent of data, I propose to you today an exercise that I consider very healthy. I propose that we withdraw a bit, get away from the rabid news and look at things with a bit more perspective. What do we see there? Well, if we go to the report published on January 9 by the BBVA research service, we will see two data that seem tremendous to me. Between 2008 and the present, GDP per capita has grown by only 3.1% accumulated. While, in the same period of time, social spending (computed as total spending, minus interest and public investment) will grow by 27.3%. Is that drift healthy? No, it’s setting us on a collision course toward disaster. What does this drift teach us? Well, first, that the accusations leveled at Mariano Rajoy of leading a criminal austericide and practicing ruthless adjustments were radically false. Quite the contrary, in his tenure things followed the previous trend and did not reverse it. For their part, the following have done exactly the same thing, only at a faster pace and in an even more unscrupulous way, since the amount of debt is more unbearable by the day and the continuous deficits reflect the cost of the most condescending populism. I am sure there are many (almost all) who will think that the problems we are currently facing justify any spending abuse, any deterioration in the deficit and any increase in debt. But there will be few who think that this enormous and persistent divergence between growth – timorous and moribund – and public spending – exuberant and splendid – is sustainable any longer. Remedy? Let’s continue with the aforementioned report: The first challenge is to increase the potential growth rate, for which it is necessary to increase productivity and the employment rate, which only exceeds those of Romania and Greece and, on occasions, Italy. The second challenge would be to improve the efficiency of public spending. There the program is extensive. In a non-exhaustive manner, it would be necessary to cite the constant evaluation of spending programs, the digitization of administration processes and the containment of pension spending. And, the third, designing a tax system that, in addition to collecting capacity, promotes investment, productivity, employment and helps in the decarbonization process of the entire economy. Likes? I love it. We are in the electoral period, which will last the rest of the year. Do you see the parties concerned with stopping this drift or rather focused on satisfying the voters, with all kinds of promises whose cost is neither calculated nor published? Those who support the tripartite government that governs us are in second place and those who aspire to succeed them should tiptoe over the issue and avoid making commitments that perhaps (better, very likely) they will not be able to fulfill.
#watched #afar