“It is not the circulation of money, it is the expense that matters,” said the economist who is very heard by President Javier Milei. He argued that the government’s package aims to unlock it.
“When I hear that government measures seek that money ‘circulates’, I can’t help smiling,” says the economist Juan Carlos de Pabloone of the men who most listens to President Javier Milei, referring to the recent Decree 353/25 and the four general resolutions issued by Arca that seek to “release” the savings that Argentines have outside the formal system.
“All money is in circulation”, Pablo states. “Neither the one we have in the pocket, nor the one who is deposited in a” circulate ‘bank account in the physical sense. Nor does it circulate if one passes it from one pocket to another. The question is not that, the key is the expense, which is a flow, not a stock”, He explains.
Dollars mattress image created with ia.png
Pablo points out that the true point of analysis is to understand that spending implies a decision: “When one takes money from the pocket and gives it to another in exchange for something – it is a good or a service – there the money effectively ‘circulates’. It is not magic, it is a transaction. But let’s not confuse: what matters is that there are people willing to spend, not that money moves from one place to another”.
In this sense, The economist emphasizes that the government measures package aims to unlock part of that expense: “Ark decree and resolutions can increase aggregate demand if there are people who, having regularized their fiscal situation, now feel louder to use their savings – blankets from the tax point of view – and, for example, they invest in consumption or capital goods.”
From Paul also warns that “the simplification that these measures bring is welcome. Living under suspicion, having to inform each movement, not only complicates everyday life, but also not proved to be effective to raise more or to reduce evasion. So, any step that allows us to get out of that bureaucratic tangle, is positive.”
Finally, the economist clarifies that the real debate is not about the “mattress”: “Enough of talking about the mattress, which is a geographical issue. Here the question is whether the dollars are white or black, from the tax and exchange point of view. That is what you have to look at.”
Source: Ambito
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