Opinion – Vinicius Torres Freire: In the new year, the country decides whether it wants democracy and whether it goes to chronic poverty

The new year will be a long agony. Before it starts, the most important thing will be to know how it ends.

First, the country will decide whether it still wants democracy. The more or less authoritarian alternatives are already evident, such as an autocracy with traces of militarism, religion and Mafia politics, depending on the situation.

Second, the new government will decide whether it will even attempt the big change needed to avoid more years of poverty, perhaps chronic poverty, which must have serious political consequences. Since 2013 there are clear signs of revolt against the rotten and closed political system and the shallow socioeconomic changes of the 1988 regime.

It has been written that the “new government will decide” whether to attempt the big change. Once the voter has given a generic mandate to do “something”, it will be up to the new government to decide whether to propose the necessary shock, something that the majority of the electorate has no idea about.

Assuming the government is aware of the drama and technical capacity, what will be the political conditions to change? It is not just a matter of agreement in Congress. There are social illusions, myth back to the “good times” and strong resistance to change – the rich entrenched even against “reforms” (liberals). The social and political disarticulation is great. What forces can support such a large and immediate program of change?

Any sensible new government will have to make changes that create the basics of a functioning market economy, even to make possible new modes of state intervention.

This means carrying out a tax reform that ends the distortions that lead to the unproductive use of capital and labor. I mean commercial opening. It means additional changes that facilitate private investment.

The change also requires giving a credible signal that the government’s relative indebtedness (debt/GDP ratio) will stabilize. If the reader thinks that the government can continue to borrow without limit and pay whatever interest rate it wants, conveniently (without causing inflation to explode), please send letters to the newsroom with the argument.

The change implies containing inefficient expenses with civil servants. It implies more taxes on the rich, so that they pay to curb debt, rather than earning interest from it, and that some capacity for public investment is regained. It implies reallocating social spending (more on this, less on that). It implies getting money for emergencies (increased misery, an early childhood education plan, reform of the SUS). At first, there will be nothing left for “the social” – if that.

All of this has to be proposed right away and requires great agreement. Conversation, hesitation and procrastination will cause the government to lose momentum, the GDP to drag on, the dissatisfaction with more impoverishment boiling over: an ugly crisis.

A big and credible change plan, on the other hand, can give the economy a short-term boost. The country can grow a biennium at 3% a year just because of the change in expectations – judging by economists’ accounts, there are enough idle resources for that. With changes underway, it is possible to grow more in the medium term, apart from disasters in the outside world.

The big deal goes far beyond talk by political scientists about parliamentary coalitions or “trustworthy vices”; it goes beyond the illusions of the left and its primary redistributionism. Finally, it is necessary to co-opt fractions of the elite, this elite that is largely collaborationist, that does any business, such as pocketbookism, and that pretends to want “reforms”.

It will be agony.