NewsWhore
02-26-2009, 02:40 PM
Writing in today's Diario Libre, economist Alejandro Fernandez comments on the contradictions between what the government requires of the private sector and the leeway it allows itself. As example of how while the private sector has had to tighten its belt in contrast with the public sector, he points out that as of October 2008, the government spent 30% more on payroll than it did in October 2007. He also says that December 2008 was a record month for the government to contract public debt - almost RD$1 billion per day. He writes that this was the "consequence of having to balance the accounts for the year, even if our children will be the ones who pay."
He also makes the point that while the Department of Taxes (DGII) levies heavy penalties on taxpayers who are behind with their payments, the government is already 120 days late in publishing what it does with taxpayer money. He points out that many businesspeople are delaying taking on new business commitments. Even so, government ty****s think differently. "For them all is swell, the money is there (in new debts to be paid by future taxes) and the will that never is lacking."
He mentions the nationalization of the Shell Petroleum Refinery, the efforts to nationalize the energy sector, and the ongoing idea of building a train to connect the Port of Haina with Santiago. Examining economic indicators provided by the Central Bank, he points out that the private sector has reduced borrowing by RD$8.2 billion and has accumulated savings of RD$4.1 billion. However, during the first 47 days of the year the public sector has taken on RD$2.4 billion in new loans and used up RD$2.5 billion of its savings, or RD$4.9 billion in new debt compared to RD$10.3 billion in savings by the private sector.
He writes about the "divorce" between the Central Bank's monetary policy and the government's fiscal policy. He says the Central Bank might be having a hard time understanding why the recent measures haven't resulted in a decline in interest rates. He has the answer. "How are they going to drop if the government is using its liquidity through the governmental Banco de Reservas while it seeks more loans in the banking system?"
More... (http://www.dr1.com/index.html#7)
He also makes the point that while the Department of Taxes (DGII) levies heavy penalties on taxpayers who are behind with their payments, the government is already 120 days late in publishing what it does with taxpayer money. He points out that many businesspeople are delaying taking on new business commitments. Even so, government ty****s think differently. "For them all is swell, the money is there (in new debts to be paid by future taxes) and the will that never is lacking."
He mentions the nationalization of the Shell Petroleum Refinery, the efforts to nationalize the energy sector, and the ongoing idea of building a train to connect the Port of Haina with Santiago. Examining economic indicators provided by the Central Bank, he points out that the private sector has reduced borrowing by RD$8.2 billion and has accumulated savings of RD$4.1 billion. However, during the first 47 days of the year the public sector has taken on RD$2.4 billion in new loans and used up RD$2.5 billion of its savings, or RD$4.9 billion in new debt compared to RD$10.3 billion in savings by the private sector.
He writes about the "divorce" between the Central Bank's monetary policy and the government's fiscal policy. He says the Central Bank might be having a hard time understanding why the recent measures haven't resulted in a decline in interest rates. He has the answer. "How are they going to drop if the government is using its liquidity through the governmental Banco de Reservas while it seeks more loans in the banking system?"
More... (http://www.dr1.com/index.html#7)