Source: Diário da Franca - SP, 17/07/2009

The problem with certain measures in economics is that they can be defended, and implemented, without the negative aspects being weighed. Economic management is basically based on a set of rules and measures in three main areas: tax policy, credit policy and public spending policy. Economic growth depends on the rules being clear, stable and adequate to stimulate investments and the entrepreneurial spirit of society. When the government changes the rules all the time and fires in several directions with localized measures for the benefit of a few sectors, under the discourse of facing the crisis, the risk is always to end up producing casuistry through laws and rules without a conceptual basis and out of a whole that makes sense.

This is what has been happening with the reduction of taxes for vehicles, building materials, food, exports and others. Under certain conditions of crisis it is acceptable for the government to call for urgent measures to avoid specific chaos. The situation, however, becomes serious when casuistry and exceptional measures occur on a large scale and repeatedly, due to the negative effects that they can generate on the productive structure in the longer term. Due to the coming and going of the tax reduction of the Tax on Industrialized Products (IPI) for vehicles, the Lula government shows willingness to make the mistake of transforming extraordinary measures into something ordinary, impoverishing the structural logic of economic policy.

The reduction in the IPI on vehicles contributed to avoid a drop in sales and, consequently, stopped the fall in production, income and employment. But the flip side is that no economic measure has only short-term effects and measures of this nature have a strong component of fiscal injustice. Even accepting the argument that the automobile production chain is very large and, therefore, it is necessary to avoid falls in sales in the sector, favoring a sector or segment, without giving the same treatment to other equally important ones, is a discretionary practice that should be avoided as much as possible.
Another aspect of the issue comes from information from the authorities that the tax waiver with tax exemptions and reductions will be between R $ 15 billion and R $ 20 billion in the year. For a government that has exaggerated spending on public machinery, the loss of revenue will increase the deficit, cause the state debt to grow, and the problem could break out further in the form of more inflation and / or higher interest rates. There was no great opposition to official measures, but it is important to remember that economic policy measures have a financial, social and ethical consequence, and it is reasonable to expect that there is an intelligent and theoretically based discussion, so that society knows that any short-term harvest term may represent certain burdens on the future.