The Wall Street Journal, 05/12/2016
Jubilant Brazilians took to the streets Thursday to celebrate Dilma Rousseff’s suspension from office for the next six months. Whether this means the end of her presidency will depend on the outcome of an impeachment trial, where she is accused of violating Brazil’s budget laws. But her political comeuppance is more evidence that a sad era of progressive Latin American politics is ending.
Ms. Rousseff’s legal troubles stem from allegations that she used bookkeeping tricks to disguise the size of Brazil’s budget deficit on the eve of her closely fought 2014 re-election. She denies this, but there’s no denying the parlous state of Brazil under her left-wing government. The economy shrank 3.8% last year, the jobless rate is above 10% and inflation is running north of 7%.
Now caretaker President Michel Temer will try to assure markets that he’s more competent than his predecessor. The conventional analysis of Brazil’s economy is that it is a victim of falling commodity prices, which is true. But Brazil’s economic woes are also a textbook case of the consequences of runaway spending and government bloat.