Brazilian regime seeks permanent austerity

It’s the worst possible scenario for millions of the poor in South America’s largest country and a neoliberal’s wet dream, and it seems inevitable.

From teleSUR English:

Unelected Brazilian President Michel Temer is a step closer to cementing his long-term austerity plan for the cash-strapped country as the lower house of Congress approved Monday a constitutional reform that would freeze public spending for the next two decades.

Critics argue that the aggressively neoliberal plan — known as PEC 241, the Portuguese acronym for Proposed Constitutional Amendment — dramatically undermines rights enshrined in the 1988 constitution, written in the early years of Brazil’s transition to democracy following the fall of the military dictatorship in 1985.

Progressive economists often warn that austerity deepens an economic downturn rather than reverses it, by depleting consumers of buying power. Public disinvestment, is, in effect, anti-Keynesian, and is akin to turning off the engine of a plane already in free-fall.

With a population of more than 200 million, Brazil’s income and wealth disparities are among the widest in the world, and the country is currently in the midst of its worst economic contraction since the Great Depression.  The PEC 241’s 20-year freeze on public spending will almost certainly produce an anemic economy because it will starve a demand economy of the very oxygen it needs — consumer demand — to thrive.

The controversial amendment passed with ease in the lower house by a 366 to 111 vote in favor, with two abstentions, after a marathon nine-hour session. The measure still needs a second vote in the lower house, where it is expected to pass the supermajority threshold in a vote scheduled for Oct. 24; if approved, it will be forwarded to the Senate for final approval.

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