Fiscal Crisis: Children and Stepchildren

As in old fashioned patriarchal homes, if there must be suffering, the first to suffer are the stepchildren, and only afterwards, if necessary, the legitimate children.

Friday, April 15, 2016


The announcement by the Solis administration that it has a plan B in case it does not manage to get legislative approval for the proposed tax increases designed to address the serious and growing fiscal deficit, highlights the existence in Costa Rica of first class citizens and second class citizens.

The government's plan A if the new taxes are not approved consists of "... violent adjustment measures at a high cost to families and the most vulnerable productive activities" which would mean "... cutting budget transfers, mostly to social programs, and curbing purchases of goods and services such as stationary, vehicles or consultancies". This means that it would directly affect the income of families whose income comes from the private sector, provider of goods and services to the state, and those who because of their socio-economic vulnerability, depend on welfare programs. Within the great Costa Rican family, these are the sectors that have been selected as those who will have to be the first to suffer. They are the "stepchildren", or second class citizens.

Only if plan A does not work, will the government resort to a Plan B, consisting of "... a freeze on public sector wage increases." This measure, whose practical realization would depend on the consent of the all-powerful state unions, also has severe legal restrictions, and would only contribute to a mere 1.5% reduction in expenditure. Then, and only then, will this improbable plan B be tried, in which the "children", the first class citizens , will share the burden of the crisis which today hangs like the sword of Damocles over the economy of Costa Rica.

It should also be noted that it is these very same wage privileges that are held by many of these "children", that are one of the main causes of the fiscal deficit.

In this era when social justice is a concept agreed on by all philosophies and political trends in Costa Rica, a country that boasts that it practices it, there should not be "children and stepchildren", and the cost of overcoming the crisis should be assumed by all citizens alike.

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