{"id":795,"date":"2025-05-10T22:51:01","date_gmt":"2025-05-10T22:51:01","guid":{"rendered":"https:\/\/poderemercado.com.br\/?p=795"},"modified":"2025-05-10T22:51:01","modified_gmt":"2025-05-10T22:51:01","slug":"o-brasil-insiste-em-fracassar-o-ciclo-eterno-do-estatismo","status":"publish","type":"post","link":"https:\/\/poderemercado.com.br\/en\/o-brasil-insiste-em-fracassar-o-ciclo-eterno-do-estatismo\/","title":{"rendered":"Brazil insists on failing: the eternal cycle of statism"},"content":{"rendered":"

There is a pattern in Brazilian economic policy that repeats itself as tragedy \u2014 and then as parody. Getulio Vargas to Luiz In\u00e1cio Lula da Silva<\/strong>, passing through JK, Geisel, Sarney, FHC, Dilma and now Haddad, the State always returns to the center of the economy<\/strong>, as if it were the redeemer, engine and tutor of progress. And always with the same results: uncontrolled spending, persistent inflation, rising debt, productive stagnation and fiscal populism<\/strong>.<\/p>\n\n\n\n

Even after decades of failed attempts, Brazil insists: when all else fails, return to interventionism.<\/strong><\/p>\n\n\n\n

Read also:<\/strong> The Real Scam: How We Destroyed the Value of Our Own Currency<\/a><\/strong> and Billion-dollar subsidies, popular inflation: the (in)visible bill for \u201cstate aid\u201d.<\/a><\/strong><\/p>\n\n\n\n

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The return of the PAC: the old illusion of developmentalism<\/h2>\n\n\n\n

In 2024, the Lula government announced the resumption of the Growth Acceleration Program (PAC), with projects spread across the country and a focus on \u201clow-income populations\u201d. The justification? To stimulate the economy and improve infrastructure.<\/p>\n\n\n\n

According to the article G1<\/em>, the new PAC intends to resume halted works and start large state projects with a public budget.
Source: G1 \u2013 Lula prepares PAC projects with a focus on low income<\/a><\/p>\n\n\n\n

The rhetoric is the same as always: \u201cturn the economy around\u201d, \u201ccreate jobs\u201d, \u201cmake the State invest where the market doesn\u2019t want it\u201d. But the history is clear: Work is delayed, expenses are overrun, results are not forthcoming \u2014 and the bill falls on the taxpayer.<\/strong><\/p>\n\n\n\n

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Haddad and the veneer fiscalism<\/h2>\n\n\n\n

While the government promises fiscal responsibility, the practice follows the opposite path. Finance Minister Fernando Haddad has been meeting with rating agencies, promising reforms and adjustments \u2014 but the numbers do not support this speech.<\/p>\n\n\n\n

According to the Poder360<\/em>, Haddad reaffirmed that \u201cthere is no change of course in fiscal policy objectives\u201d<\/strong>, even in the face of worsening targets, increased spending and the absence of a surplus.
Source: Poder360 \u2013 Haddad reaffirms fiscal policy without changing course<\/a><\/p>\n\n\n\n

The problem is not the rhetoric \u2014 it is the contradiction between the promise of stability and the practice of state expansionism.<\/p>\n\n\n\n

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Repeating the mistakes of the past \u2014 with different names<\/h2>\n\n\n\n

THE West Magazine<\/em> sums it up nicely: Lula's government's economic agenda repeats the mistakes of previous packages<\/strong> \u2014 excessive state protagonism, superficial relief to consumption, absence of structural reforms and fiscal expansion.
Source: Revista Oeste \u2013 Lula government repeats mistakes from previous packages<\/a><\/p>\n\n\n\n

It's the same cycle:<\/p>\n\n\n\n

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  1. State promises to \u201cinvest to grow\u201d;<\/li>\n\n\n\n
  2. Creates programs, subsidies and incentives;<\/li>\n\n\n\n
  3. Debt rises, inflation returns, confidence falls;<\/li>\n\n\n\n
  4. And the market is accused of \u201cnot cooperating\u201d.<\/li>\n<\/ol>\n\n\n\n
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    The State as a fetish \u2014 not as a solution<\/h2>\n\n\n\n

    Brazil carries a statist tradition rooted in its political formation: the State as the center of everything, father and mother of the economy, great planner, great intervener. But in practice, It is the biggest obstacle to productivity, innovation and economic freedom.<\/strong><\/p>\n\n\n\n

    While countries move forward with reforms, privatizations, market freedom and decentralized innovation, Brazil continues to believe that the next state package is that \u201cthis time it will work\u201d.<\/strong><\/p>\n\n\n\n

    It doesn't work. It never did. It never will.<\/p>\n\n\n\n

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    Debt grows, productivity stagnates<\/h2>\n\n\n\n

    With a tax burden of over 33% of GDP, Brazil continues to collect a lot and spend poorly. Public debt exceeded 75% of GDP in 2024. And Brazilian worker productivity remains among the lowest in the world \u2014 according to data from FGV and the World Bank.<\/p>\n\n\n\n

    I.e: We spend like a rich country, we produce like a poor country and we pretend that the problem is \u201clack of public investment\u201d.<\/strong><\/p>\n\n\n\n

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    When the State becomes the problem itself<\/h2>\n\n\n\n

    The Brazilian State is present where it should not be \u2014 controlling prices, inventing rules, manipulating contracts \u2014 and absent where it should act: security, justice, contractual freedom.<\/p>\n\n\n\n

    By intervening directly in the economy, it generates distortions, creates dependency, sucks up productive resources and destroys the incentives that make the market work.<\/strong><\/p>\n\n\n\n

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    Why don't we learn?<\/h2>\n\n\n\n

    This question is the heart of this text. Why does Brazil insist on the same failed formulas? Why doesn\u2019t it learn from its mistakes? The answer is uncomfortable, but necessary:<\/p>\n\n\n\n

    Why statism It is not error \u2014 it is method.<\/strong><\/p>\n\n\n\n

    He does not fail \u2014 it serves interests.<\/strong> It serves those who live off public funds, those who depend on positions, those who build overpriced bridges, those who profit from consulting for programs that never get off the ground.<\/p>\n\n\n\n

    It is a closed system in itself, protected by ideology and sustained by economic ignorance.<\/strong><\/p>\n\n\n\n

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    Conclusion: the future hijacked by the past<\/h2>\n\n\n\n

    Brazil needs to break the cycle. The future will not come from more PAC, more subsidies, more programs, more ministries. The future will come when the country understands that the State is not the engine of the economy \u2014 it is the brake.<\/strong><\/p>\n\n\n\n

    And as long as we continue to resort to it as a magic solution to all problems, we will remain stuck in the past \u2014 in inflation, debt, stagnation and populism.<\/strong><\/p>\n\n\n\n

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    \ud83d\udce9 If you want to understand why Brazil insists on failing and how to break the cycle of statism,
    subscribe to the newsletter Economic Radar<\/strong>.
    Every week, critical and direct analyses of the errors that the official discourse tries to hide.<\/p>\n\n\n\n

    \ud83d\udd17 References<\/h3>\n\n\n\n