For decades, the lack of a democratic culture generated a political class linked to vested interests far removed from society, which prevented the construction of a public finance system that harmoniously structured its three components: taxes, public spending and debt. During the decades of the 70’s and 80’s, government debt was the reason that motivated state agencies to continue financing infrastructure projects and excessive unproductive expenses with clear deficiencies in public management. In the following years in what has been incorrectly called neoliberalism (1988-2018), taxes were the central focus of efforts in the matter; In this way, the debt was managed correctly while profitable social programs grew, financed by a tax base well below international standards. The pending issue then as now, is the enormous size of the informal economy that reaches 60% while not contributing. As of the second alternation, with the current government (2018-2024), full emphasis has been placed on the budget, fundamentally on cutting it.
In the current conditions of the global economy slowing down with high levels of inflation, we observe how various nations implement strong economic policy measures to avoid severe damage to their economic and social structures with very high costs for their populations. On the contrary, in the case of Mexico we have lived through the tragedy for decades of how the political class has gone from one place to another without being able to fully solve the problem of the weakness of our public finances. Today it is clear that our taxes, government debt and public spending do not serve to mitigate the adverse effects of external shocks and less to contribute to economic development. The government debt grows and grows in relation to GDP, taxes are contributed by the minority of taxpayers and public spending has no impact on the country’s growth. In light of the convincing evidence and the lack of fiscal tools other than the collection of taxes, we will have to find political space for the economy to function, since millions of marginalized people require it, just as the productive plant needs the support that it does not have. .
Doctor of Economic Development and Law and Philosophy
AUCTORITAS
Professor at the Universidad Panamericana, Ibero and TEC. He has worked at the Bank of Mexico, the Ministry of Finance, the Presidency of the Republic and in Washington, DC. He is the author of books on economic history, financial regulation, monetary policy, economics, and ethics.