Wednesday, October 20

Let me give you a tip, Mr. Casado

In a recent brilliant interview in a media that declares himself a fan of Mr. Casado, the leader of the opposition in Spain has launched a categorical statement to the entire world: Spain is bankrupt. Everyone knows the technical and academic solvency of our illustrious politician, so all investors, internal and external, should be ready to take out our savings and go to one of the tax havens where distinguished politicians from that party have deposited, and they continue to do so, their modest capitals.

For this reason, and paraphrasing the Vice President of the Government, Yolanda Díaz, Mr. Casado should know some information. If Spain were bankrupt, obviously, that variable so used in the past, the risk premium, would be out of control, as it was when Zapatero and Rajoy ruled, but unfortunately for your intellect at the moment it stands at 64 bp. So, to this day, your desire for bankruptcy seems distant. As you should know, financial markets quickly sniff out those economies that may be at risk of default.

What undoubtedly happens to you, Mr. Casado, is that you confuse bankruptcy with over-indebtedness. Here again, your desires go further than your knowledge and intelligence. Spain, like the rest of the economies, has suffered a serious economic shock caused by the pandemic. And finally, despite its basic and failed economic ideology, the national and international financial authorities have chosen to increase spending without absurd rules for maintaining deficits and debt at levels that only serve to dismantle the meager welfare states, like Spanish. This situation, endorsed by the IMF, the OECD and central banks, has consisted of the issuance of massive debt, as well as massive transfers of public money to the private sector and the enlargement of the size of the public sector in those sectors that the previous crisis private debt left shivering, thanks to politicians like those in his party.

Therefore, yes Spain has a higher level of debt over GDP than a year ago, but so do the rest of the neighboring countries, such as Italy, France, Belgium or Japan, to give a few examples. Part of this debt has been bought by the ECB, as well as private corporate debt, so its absurd assertion has nothing to do with the economic reality posed by the ECB, whose debt purchase policy will continue until any trace dissipates of uncertainty about any member country. Hence the bet of the Funds Next Generation to alleviate the effects of the pandemic and its consequences on economic development.

The rest of the figures that you launch to justify such a falsehood have to do with the number of unemployed, they are not 5.4 million but 3.2 million, as well as doubting the country’s growth figures or your desperate attempt because the funds Europeans did not arrive in Spain in the best conditions for companies and families.

The worst scenario in many decades has not had the support of its political group in many of the measures that have served to safeguard employment and the income of companies and families. Neither the ICO credits nor the moratorium on embargoes due to COVID have deserved your vote in favor, I understand that because he did not want to increase public spending, given his allergy to public services.

But what is most striking when it comes to understanding its daring warning is that its alternative is a model like the one in Madrid where it is sought that high incomes, high assets or large companies hardly pay taxes, in order to be able to undermine the network of security for the unemployed, middle and low income, immigrants, women and youth. A bankrupt country without tax collection is a time bomb. It should not be forgotten that Spain has a tax burden between 5 and 6 percentage points lower than the EU average. The successive ministers of the PSOE who have always bought the Laffer curve with fervor have not been very brave here either, although some of the presidents later corrected them minimally, with some patches to show their slight leftist bias.

The reality, Mr. Casado, is that Spain is not going to go bankrupt, but some Autonomous Communities governed by your party are suffering significant bankruptcies in the exercise of the right to decent and equal education, health and social services, the result of the ideological contempt that The Welfare State produces him, especially after his extramarital friction with the extreme right of Vox.

But there is one fact that is going to hurt you even more, Mr. Casado. The world has awakened from a bad dream that reminded it of what excessive deficit, inflation and debt meant, as toxic elements to be eradicated. Countries with monetary sovereignty, such as the United Kingdom, have been able to use the resource of the creation of money by the Bank of England without limit, knowing that they will very probably not have to return it and the result has been that inflation has not shot up , which no one has explained yet. The principle of effective demand should be the one that guides the economic policy in the intelligent world and thus we would avoid the sterile debates about the risks of raising the minimum wage and its impact on employment. Perhaps because of this paradigm shift, the last Nobel Prize in Economics, David Card, has been able to demonstrate this falsehood to people like you, although I highly doubt that he understands such literature.

It only remains for me to recommend, Mr. Casado, that you be more prudent and do not expose yourself to making a fool of yourself, although we all know that you have a large part of the generalist and economic press that jellies you, although they know that everything you advertise is false . Perhaps for this reason, it has decided to intervene, de facto, the national and regional public television in Madrid to see if it can continue to evangelize with its ignorance until it reaches Moncloa at no cost.

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