The report noted that during that period the different governments increased the monetary issue by 34% on average per year.
“These data show that the national public sector covered with genuine income, over the last two decades, less than 90% of its expenses,” said IDESA, which “explains the excess indebtedness and monetary issue.
IDESA maintained that “Without ignoring that inflation is a multi-causal phenomenon, the chronic fiscal deficits forced to issue pesos above what people demand, which led to high inflation.”
“The current situation (with income that covers only 80% of spending and monetary issue and annual inflation in the order of 100%) is the extreme manifestation of a process that began as soon as convertibility exploded in 2002 and consistently deteriorated in the last 20 years,” reported the consultancy run by economist Jorge Colina.
The report stated that “the key to explain this process of decline is the bad organization of the State” and considered that it is explained by “the disorder in the pension system and the overlapping of taxes and expenses between the three levels of government promoted by the de-professionalization of the public employment”.
The phenomenon, as pointed out by IDESA, leads the State to automatically tend to “spend consistently above its income and to manage said spending very badly.”
“The problem of State failures is not only excessive spending but also the loss of economic and social productivity caused by bad public interventions. This ended up destroying the currency,” the consultant said.
Source: Ambito
