The Brazilian public sector is no longer at risk of insolvency and there is no one who doubts the sustainability of public accounts in the short, medium or long term. The trajectory of net debt has fallen again and it is possible that it will be close to 30% of the Gross Domestic Product (GDP) at the end of the term of President Dilma Rousseff. There are unresolved issues, such as the rules of the social security system, that need to be improved so that they do not become a tax problem in the future; or the tax system, which penalizes production and investment. But these issues should not obscure the fact that the Brazilian fiscal framework is not a concern, especially when compared to the situation experienced by developed economies.

The point is that Brazilian fiscal policy can no longer be analyzed from the perspective of a public sector in financial crisis. At the beginning of the past decade, obtaining the primary surplus established as a goal was essential to demonstrate the government's ability to honor its commitments, which allowed investors and markets to calm down, with the consequent reduction in the cost of financing to Brazil. Fortunately, this is no longer the case. After a decade of fiscal adjustment, which coincided with the accumulation of a large reserve in international currencies, there is no longer any risk of default.

Brazilian fiscal policy can now be analyzed and implemented by the government in view of its effects on aggregate demand, as in any country with macroeconomic stability. And, in this way, it needs to be articulated with the monetary policy implemented by the Central Bank (BC). From this point of view, it can be said that Brazil left the emergency room and returned to live the normality of a market economy with democratic institutions.

The Brazilian Central Bank faces persistent inflation and adopted a strategy to bring inflation to the center of the target in 2012. The Focus report, with market forecasts, however, already estimates inflation of 5,2% for next year , indicating that the main analysts no longer believe it is possible to achieve the objective that the BC proposed.

At the same time, the external framework inspires great care, although the latest aid package to Greece, announced last week by European leaders, has reduced tensions and given reasoned hopes that the problems of that and other European countries can be resolved in a organized way. Most likely, however, these issues will drag on for quite some time.

In a complex scenario like the current one, it is up to the Brazilian government to act with prudence. In this sense, the best path to follow is to further coordinate fiscal and monetary policies and, thus, avoid a greater interest burden. There is fiscal space for this, without further sacrifice, as the federal revenue broke a record in the first half, with a real growth of 12,7% over the same period last year.

In the report for the assessment of income and expenses for the third two months, the government informs that it will raise R $ 3,87 billion this year more than it predicted last May. With this “extra” revenue, the government announced its intention to raise some mandatory expenses and the payment of outstanding credits remaining. The increase in mandatory spending will be on education, complementing the Union to Fundeb, which is very meritorious, and with social security benefits. But it is important to keep in mind that the “extra” revenue was due to the anticipation of the payment of portions of the so-called “Crisis Refills” by large companies. It is, therefore, a recipe that economists call “once for all” and cannot finance permanent spending.

It is very likely that the federal revenue will continue to grow significantly until the end of the year, not least because the signs of a slowdown in the economy are still tenuous, which can be easily seen by the large number of formal jobs being created. This “excess” of revenue should be spared, not with the aim of demonstrating the sustainability of Brazilian public accounts, but to help control aggregate demand and, in this way, inflation.