The economic debate in Brazil has been dominated by fiscal adjustment and its implications. The deterioration of public finances, high inflation and the slowing of economic activity in the last four years induced deep changes in an economic policy that had been adopted since the 2009 crisis.
Unlike the dominant view, however, the fiscal crisis does not stem only from mismanagement of public accounts in recent years. This is not a short term imbalance and it is not a discussion between income and expenditure and discussion that will allow renewed growth in the following year.
The crisis is deeper and requires a more severe and structural adjustment. Measures to increase revenue in order to enable a higher primary surplus this year are insufficient to overcome the serious challenges facing the country, and only postpone confronting the problems which become even more severe with time.