Country financial redesign: primary target versus nominal ta
Mar 4, 2024 9:59:14 GMT 1
Post by account_disabled on Mar 4, 2024 9:59:14 GMT 1
I will try to explain both mechanisms for those who are not familiar with them, although both are easy to understand. SpaccaNominal result , which can be positive (surplus) or negative (deficit), results from the mathematical operation of revenue minus expenses. This is what happens in families or companies, in which everything that is received (revenues) minus everything that is spent (expenses) is computed, with the final calculation of this simple operation being the existing nominal result . Primary result , which can also be positive (surplus) or negative (deficit), results from the calculation of revenue minus non-financial expenses. Thus, everything that is received (revenue) is computed minus everything that is spent expenses however — and this is the important detail — financial expenses, that is, interest and debt renegotiations, are not included in this account.
Two results are determined : the primary one and, only after that, the true nominal result is identified . Therefore, a primary surplus and a nominal deficit may occur as soon as financial operations are incorporated into the account. This has been the formula used by the Brazilian government. So far, one might think that these are just two ways of viewing the accounting result of private operations (households and companies EL Salvador Mobile Number List linked to the nominal result ) as opposed to that of the government ( primary result ). However, the primary difference lies in the adoption of the primary result parameter in the formulation of public policies. Although both methods are exposed by the government, the primary result system adopted by the government constitutes its goal, with the nominal result rarely being observed . An example: in August that is, the nominal (real) deficit in public accounts is much larger than it is propagating.
As a result, the government acts in an uncalibrated manner , because by setting the primary result as a target , it takes the important issue of public debt out of its sights , which will only appear when the cloudy nominal result is computed . Thus, public debt was left aside as a target to be controlled by the government. Here's the explanation: debt corresponds to both a postponed expense and an anticipated income . Postponed expenditure because the payment of what was obtained as a loan will be postponed, which at the same time corresponds to an anticipated income, because the borrowed money immediately entered the public coffers — although its payment will occur in the future. This reveals the intergenerational nature of the debt, as it compromises future generations, who will have to pay taxes to pay off a debt corresponding to money that entered the public coffers long before their birth, and has already been spent.
Two results are determined : the primary one and, only after that, the true nominal result is identified . Therefore, a primary surplus and a nominal deficit may occur as soon as financial operations are incorporated into the account. This has been the formula used by the Brazilian government. So far, one might think that these are just two ways of viewing the accounting result of private operations (households and companies EL Salvador Mobile Number List linked to the nominal result ) as opposed to that of the government ( primary result ). However, the primary difference lies in the adoption of the primary result parameter in the formulation of public policies. Although both methods are exposed by the government, the primary result system adopted by the government constitutes its goal, with the nominal result rarely being observed . An example: in August that is, the nominal (real) deficit in public accounts is much larger than it is propagating.
As a result, the government acts in an uncalibrated manner , because by setting the primary result as a target , it takes the important issue of public debt out of its sights , which will only appear when the cloudy nominal result is computed . Thus, public debt was left aside as a target to be controlled by the government. Here's the explanation: debt corresponds to both a postponed expense and an anticipated income . Postponed expenditure because the payment of what was obtained as a loan will be postponed, which at the same time corresponds to an anticipated income, because the borrowed money immediately entered the public coffers — although its payment will occur in the future. This reveals the intergenerational nature of the debt, as it compromises future generations, who will have to pay taxes to pay off a debt corresponding to money that entered the public coffers long before their birth, and has already been spent.