Steve and all-- Just thinking out loud about the inevitable financial reforms in Brazil. Altho the reforms seem vital in the LT for the economy, my major concern is that they will reduce the amount of available money people will spend on, among other things, telephones. E.g., decreasing retirement benefits for civil service worker will give them less disposable income. Almost all of the reforms will have, IMO, a similar short-term effect. Increasing taxes will do the same, as will increasing interest rates--which I understand to be very high now.
Tho I welcomed the reforms, and agree with a very intelligent assessment by Darkgreen some time ago, that the financial crises facilitated these necessary reforms, I am now concerned that they may backfire, and that the need for devaluation of the real, as advocated by Jeffrey Sachs, may be better for the economy. Comments?
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