AHC/PC/WI: Better Off Brazil Politically And Economically

It is different, first because Dilma will stay until 2018 and problably Lula (the guy who preceded she) will get elected again, Brazil is very know for his horrible populist leaders, second because Argentina elected Macri who reversed the keynesian tought instated by the Kirchner (Cristina was basically a Argentinian Dilma, both were terrorists in the past and both adopted similar policies), the government doesn't have any support from the economy and things only worsened after Guimarães Barbosa became the ministro da fazenda, we will not see Brazil back at the international scenario at the very elast until 2018 (but problably until 2026)

About keynesianism, imagine a sucession of keynesian governments, both printing a ton of money to pay the debt to the exterior while crushing the value of your currency, add also the fact that the brazilians are very irresponsible with the money and over 63% of the population are very indebted, we should have enacted heavy austerity measures years ago but our government still is burning money
Ok, now I see where you're coming from. Let's check:
Cristina Fernandez wasn't a terrorist. She expended the Argentine dictatorship executing mortages and getting her neighbour's homes for pennies.
So far, Macri crushed the currency value and laid off 12,000 people
Dilma enacted austerity measures at the start of her second term
Austerity doesn't work.
 
Austerity doesn't work.



What is austerity? Who gets the austerity?
I define austerity as the -government- spending actually less this year than last. For several years. The countries in Europe having money troubles constantly blathered on about 'austerity', but never spent less year on year. Is that austerity?
 
Admiral Beez said:
[xenophobic drivel]

I know, I know, we're done, but I need to take one more stab at this:

British colonization is no panacea. Each colonizer's methodology wasn't just pulled from the aether. The way they went about colonizing was informed by geography and the situation on the ground. Just look at the difference between the Northern and Southern members of the 13 Colonies. Their systems of governance were radically different because they had a different climate and different resources, which demanded different methods.

If the British and the Spanish switched their holdings, I'm sure our precious little racist would be mouthing off about lazy Protestants and Catholic superiority en español. Even if Britain never broke from the Pope but colonized the same places, I doubt Catholicism would do anything to change their mercantile nature, Weber be damned.
 
What is austerity? Who gets the austerity?
I define austerity as the -government- spending actually less this year than last. For several years. The countries in Europe having money troubles constantly blathered on about 'austerity', but never spent less year on year. Is that austerity?
Austerity is: "Public deficit is 6% of GDP, we'll cut it down to 3%".

In times of recession this further contracts GDP, causing government income to fall, which causes deficit to growth which, if followed by additional cuts to reach the desired target, causes the GDP to contract even further.

Some guys used to say that "confidence" would swoop in once austerity measures are enacted, offsetting the recessionary effects of austerity. But they were cherry picking their data and were proven wrong. Nowadays, there is no scientific support for austerity, even if large tracts of the public refuse to believe it.
 
Austerity is: "Public deficit is 6% of GDP, we'll cut it down to 3%".



So what happens if public deficit (I interpret as government spending more than comes in?) is reduced? Your post seems to say it okay for gov to spend more than it takes in and leave less for the economy.
 
So what happens if public deficit (I interpret as government spending more than comes in?) is reduced? Your post seems to say it okay for gov to spend more than it takes in and leave less for the economy.
Let's say part of the government expending is maintaining the railroads. So the State has a number of people paid every month to go to the railroads, remove the old railway sleepers and tracks and replace them with new ones.
To do this the government also purchase the tracks and sleepers from private companies, who manufacture them and ship them to wherever they are needed.
One day, the government decides it needs to cut spending. And among the cuts, it decides to postpone the maintenance of railroads. The workers who replace the tracks get laid off and while they apply to unemployment subsidies, they can't consume as much as they did. So the restaurants which sold them food for lunch sell less food. Maybe they fire a waitress, or if one resigns, they don't replace her. Production falls at the companies making the tracks and sleepers. Maybe they postpone hiring new people. Maybe they suspend workers, depending on how hard they are hit. In any case, the workers there notice the fall in production and, if the overall economic situation in the country is bad, they fear they'll get laid off. So they cut back their spending and save their disposable income instead of consuming.
As this happens, the State income gets reduced. If there is VAT in the country, the fall in consumption means less VAT gets collected. Private income is getting reduced, either because people are getting laid off or because people aren't expending (so, if one of the workers at the track factory decides to postpone the purchase of a new computer, the salesman at the computer store looses a sale and makes a little less money), so less money enters the State through income tax as well.
Even more, railroad maintenance is getting skipped, so trains may need to circulate slower than usual, which means delivery times get increased, which lowers the country's overall productivity.

If all this happens during a boom cycle, the consequences might be offset by the growing economy: the laid off workers get a job elsewhere, the tracks factory might sell steel bars to someone else so their workers still get a new computer, other people might be willing to pay for more expensive dishes at the restaurant where the railroad workers used to eat, etc.

If this happens during a bust cycle, where the private sector is cutting expenses and thus creating a vicious circle, the State adds to the vicious circle instead of pushing the economy back into growth.
So during a recession you don't cut spending. You either:
Lower the interest rate, so loans for both production and consumption are cheaper
Increase spending by printing money, which causes inflation and might lead to stagflation if it doesn't create growth, which increases povery
Increase spending by issuing debt which can have nefarious long term effects if taken to a extreme: if the debt is in the country's currency, it can lead to inflation as the country prints money to pay it. If it's in a foreign currency, it can lead to a default.
Do nothing, which means you're still in recession
 
If you speak economically, Brazil would have been a developed country right now had Arab Oil Embargo never happened at all as the embargo due to the abundance of cheap petrodollars thereafter, fueled the government to borrow them at unsustainable levels especially after the second massive oil spike in 1979 as a result of Shah's overthrow in Iran and if two massive oil spike never happened at all, Latin American debt crisis won't happened as well, thus Brazil's economy can sustain moderate to high growth in the 1980s up to 2000s.

If you speak politically, I could say that earlier abolition of slavery, perhaps 1850, could have saved the Brazilian monarchy as abolition of slavery would create an immediate labor shortage and thus, Brazil would encourage more European settlers mainly from Germany, Ireland, and Italy to come earlier than in OTL and these settlers would provide a necessary support for the monarchy.
 
Don't be a country based mostly in slavery. Brazil, of course, imported the most slaves and was host not only to sugar colonialism but coffee and mining colonialism as well, the trifecta of economic monopolization and social stratification in the New World.

If we include the American South as a separate country, then a clear pattern of postcolonial economic development emerges. Those places that had less slavery and more industrialism and bourgeois population -- America's North, Canada, and the Southern Cone (including Southern Brasil) -- are by far better off than their neighbours.

Why? They didn't have neo-feudal landholding elites trying to prevent economic and political modernization. It is no mistake that the regions based in sugar colonialism or mineral extraction are poorer -- they tended towards economic monomania and the various problems engendered by conservative landholders.

Brasil didn't historically have a shortage of labor -- for one, the Portuguese labor diaspora went strong into the 20th century -- but the entrenched political and economic modalities, built into Brasil by the nature of its colonizations, crippled it going forward.

Personally, I think reforming the Empire is probably the best bet. That stability was, until the coup, incredibly rare for Latin America. Maintain stability, and economic reforms and perhaps open immigration to Asia will give Brasil more tools to diversify and industrialize its economy.

Of course, you do run into the problem of the Empire drawing support from the very landowners who held back Brasil's economy...
 
Let's say part of the government expending is maintaining the railroads. So the State has a number of people paid every month to go to the railroads, remove the old railway sleepers and tracks and replace them with new ones.



Okay, you and I are coming at this from opposite views. Your scenario has the gov operating a business directly, like Greece with their coal mines. Miners were marching in the streets demanding pay due-they were the ones getting austerity. The number of bureaucrats wasn't reduced (my idea of austerity), although many of them weren't getting paid on time either.
 
1) No colonization by anyone from the Iberian Peninsula, or any Catholic nation.
Sorry folks, my earlier post was a little over the top. By coincidence I'd had a similar discussion in person with my mates where the group debated why Canada, USA, Australia (and NZ) settled and originally run by the Brits were apparently more economically successful and politically/democratically stable than many countries in South America and in the Pacific settled by Spain and Portugal. However my post was unnecessarily provocative and simplistic, so apologies to all.

On a more positive note, I am certain Brazil's upcoming summer Olympics experience will be as successful as those in London and the three ex-Brit places I mention above, and will be a great experience and showcase for Brazil. The Olympics generally bring the best out of any successful country's political, economic and cultural scene, while providing good infrastructure investment, tourism promotion and sports facilities to benefit the host nation for years afterward.
 
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