The chief economist of the opposition PRD, Arturo Martinez Moya, read out a document at yesterday’s meeting of the Economic and Social Council that is studying the taxation increase proposal presented by the Medina administration where he accuses former President Leonel Fernandez of causing a fiscal crisis that is four times greater than the banking crisis of 2003 that cost the country RD$55 billion. He said that in the six taxation increases in the eight years of government led by President Fernandez (2004-2012), they collected more than RD$700 billion that was used to pay for the luxuries of government officials and to ensure the ruling party’s control over all the government branches, as reported in El Caribe. The way they did this was to accelerate wasteful spending during the elections to prevent the PRD and its candidate from winning. The PRD estimates the government’s cash deficit at RD$140 billion and the public sector deficit at RD$170 billion.
“Danilo Medina took possession thinking he could hide the truth, that was why he hesitated and did not present the state of the public finances. The economy is paralyzed, interest rates have dropped and the banks have liquidity, but there is no one taking on loans because businesspeople are cautious about the silence of Danilo, and as a consequence, trust is lost in public policies.”
Economist Luis Reyes, who is director of the Budget Department, said that the fiscal deficit that affects public finances would consolidate at RD$184 billion at year-end. He said this is the result of the lack of institutional strength that can set ceilings on spending and public debt, as reported in El Caribe.
News commentator Miguel Guerrero says that former President Leonel Fernandez, who inherited the banking crisis in 2003, at the time attributed it to bad economic management by former President Hipolito Mejia. But Guerrero says that the present fiscal deficit is the result of immoral and illegal use of public resources by the administration that had hypnotized the country with the illusion of an armored economy and stability at all costs. “The result is that the macroeconomic stability that the government still boasts about is a gross lie, a bubble about to explode”.
He comments that if the Baninter hole led to a trial and jail for those responsible, the least that could be expected for this deliberate bankruptcy of the economy is that whoever is responsible should be tried because the situation is the result of consistent violation of established rules for the use of public assets. “You cannot oblige the people to pay in four years more taxes, the cost of the wasteful spending with those who caused it not receiving fair punishment for their deeds. Another taxation increase would be unreasonable when government officials, legislators and friends of the echelons of power continue to enjoy the “barrels”, extra payrolls and other irritating privileges.”
The editor of El Dia, Rafael Molina Morillo congratulates Santo Domingo province legislator Ito Bisono for his suggestion to cut the “little barrel” of the senators and the “treasure chest” of the deputies. He makes the point that in the same way as hens pick corn kernel by kernel, the government can gradually reduce its wasteful spending to find the money to meet the fiscal deficit. “I agree with those that say that the government, before finding the needed revenues by increasing taxes and sacrifices to the people, needs to offer clear signs that it will submit public spending to strict austerity. Preach by example, as Hostos or whoever said…”
Also musing about the popular feeling against new taxes, Diario Libre editor Ines Aizpun also addresses the growing feeling against more taxation to pay for PLD government wasteful spending in her column today, Tuesday 9 October:
“Political patronage is expensive. When it explodes it does so in the face of those who have fed it. It ends up leaving them without money… and without excuses.
“Have we gotten to that point? It looks like it. With an opposition that can’t express the ill feeling, citizens have opted to use the Internet to call for meetings. One is proposing a protest on 15 October outside the Palace, as hundreds of Spaniards did outside their Parliament on 15 September. Another is calling for a peaceful strike on 6 and 7 November to force the effect of the long weekend on 5 October. Others defend a strike, also peaceful, for 16 and 17 October. “They danced at that party and we do not deserve to be the ones to have to cry!”, she writes.
“The problem for President Medina is that he cannot openly blame his predecessor: Yes, the deficit was engendered during Leonel’s term, but he validated that past by appointing half of the cabinet to his new cabinet. Can the same old team that has gotten us in this mess take us out of it? Are we going to pay for it all: loans, payrolls, over-evaluations, commissions, pensions, luxuries, villas, incompetence…?
“The citizens will convene each other through the Internet, orphans of perhaps the leadership to bring all together. The citizens would not back a violent strike, nor will they have ties to the militant opposition or those useless unions.
“These are the citizens that are fed up with the reiterated incapacity of a narcissistic and avaricious political class that only thinks of their salaries, their foundations and their gift bags.”
And popular Diario Libre comic strip character Boquechivo has dedicated the drawings capturing popular mood in October to the comparison of the abundance of government officials and taxpayers who have to fit the bills.
http://boquechivo.diariolibre.com/blog/
www.noticiassin.com/2012/10/la-columna-de-miguel-guerrero-que-paguen-los-responsables/