faced with complaints, they foresee more injection of money

Those enrolled for the IFE double those approved to collect. And the unemployed ask for more subsidies while the tax collection can drop to 30%

How serious is the social situation as a result of the quarantine, the continuity of which has just been confirmed Alberto Fernández? An eloquent indicator is the number of people enrolled to receive aid of $ 10,000 versus the number of people who actually receive it. Anses The payment was approved: more than 11 million registered against a probable payroll of five million.

These days, people are complaining about not having been accepted, despite being in need and with zero income. Many allege that the rejection occurs due to formal situations, such as a young man who moved and rents had never made the change of address in his ID, and therefore for the system it appears that he continues to live with his parents, who have I enter a retirement.

Situations like this multiply by millions, and as the drama of the fall in income deepens for merchants, self-employed and informal workers, it will be more evident that the measures announced so far are not enough.

And it is not that the expansion of public spending decided by the president is less. At the moment, it is estimated that the cost of Emergency Family Income It will imply about $ 55,000 million per month, and it is already discounted that at least that payment will have to be prolonged for three months.

In addition, another $ 120,000 million in aid to the provinces was announced, by way of increased co-participation – with funds that will come from the contributions of the National Treasury – and credits at a subsidized rate, from the Provincial Development Trust Fund.

And before that, a package of measures such as the REPRO and the payment of a minimum wage for each SME worker in crisis situations. Economists estimated the cost of these measures at least two points of the Gross Domestic Product.

But as impressive as the number is, there are more and more signs that aid will need to be increased. There are provinces like Entre Ríos in which the authorities already make projections of falls in tax collection of 50% for April.

And in the private sector the worst has yet to be seen. A revealing survey by the Fundación Observatorio Pyme indicates that just 10% of companies continued their activity in a normal way, while 34% remained partially operational and a frightful 54% did not work directly. In other words, more than half had zero billing since the quarantine began.

A quarter of the companies said they were not in a position to pay salaries or obligations, not even with the help of the recent decree issued by the Government to partially assist wage costs.

In this framework, it is obvious that what is cut first is the payment of taxes. And even then there is a risk of definitive loss – due to the closure of the company – of some 200,000 jobs.

Broadly speaking, half of the 20 million Argentine workers do not receive a salary as a result of a contract in a situation of dependency, but rather depend on daily income. And some five million belong to the informal sector.

The forcefulness of the numbers suggests that the six million that were written down to collect the IFE and were rejected will make the pressure feel. To which the future unemployed will be added.

For now, social organizations have made a proposal to establish an unemployment insurance of $ 30,000 for all those who are without income or cannot pay rent. In other words, a relatively high subsidy, considering that until now the most expensive the government has offered was to pay the minimum of $ 16,875 for SMEs with less than 20 employees.

Urgent claims and low resources

This panorama leads to the inexorable question: how does a country like Argentina, without savings or external credit, finance the rescue of the quarantined economy?

The urgency that is demanded from the four sides of the Government contrasts markedly with the poor prospects of fiscal resources. In March there was a drop in real terms of 10% against the same month last year. But as economists pointed out, it is a month in which the full impact of the economic situation due to quarantine has not yet been reflected.

Forecasts for April indicate a historic drop, to the point that the Mediterranean Foundation estimates that tax resources will decrease by no less than 30% in the short term.

This situation led to economists like José Luis Espert do not hesitate to project a fiscal deficit of up to 10 GDP points.

“We are talking about almost 3 trillion pesos, how are you going to do to finance that?” Asks the former presidential candidate, who had a hard controversy with the deputy and banker Carlos Heller around the tax with which it is expected to tax the “richest 1% of the country”. Espert disparages the contribution of such a tax, because he believes the collection will be irrelevant and the measure will have a symbolic character.

Heller, based on the money paid in for the 2016 money laundering, estimated that more than $ 2 billion could be raised.

On the more orthodox sidewalk, far from asking for more income for the AFIP, they believe that the solution comes in the opposite direction: tax relief. By case, Nadin Argañaraz, director of the Argentine Institute of Fiscal Analysis (IARAF), proposes that an extension in the balance of social security taxes, as well as the VAT, Gross Income, security and hygiene rates and the Advance of Earnings.

He believes that this remedy will allow many companies to continue paying salaries, and that it will be less onerous for public coffers than having to attend a legion of unemployed.

“The granting of liquidity to companies is the way to guarantee the payment of salaries to all formal private workers. With this basic objective, the three levels of government should take concrete tax measures immediately, starting by postponing payments that are due in April, “said Argañaraz.

Empty box, full machine

At this point, almost nobody disputes that the “little machine” to emit must be at the center of the solution. And the printing press is already working full time. In March alone, there was an increase of $ 600 billion, about a third of the monetary base, and there are economists who project that the issuance required in April will be no less than $ 400 billion.

Projections suggest that a doubling of the amount of money will be reached in the short term.

Of course, there are warnings about the form and magnitude of this emission and about the most efficient way to inject it into the market. Some felt a tremor as they read the gloomy forecast of Domingo Cavallo.

“If statist, interventionist and isolationist tendencies prevail that even with the moderate tone that characterizes the president’s speech, they frequently appear in the official message and if in the search for scapegoats the most influential political leaders choose the business community, the end of this crisis may be hyperinflation, “said the ever-influential Cavallo, for whom the goal should be to find a way to restore credibility to the peso.

But for now, although it seems paradoxical, what is happening is an increase in the demand for pesos. With banks closed and the festival of bouncing checks, companies in need of liquidity went out to sell their dollars or withdraw their deposits in fixed terms. Only due to the non-renewal of fixed terms, some $ 120,000 million were added to circulation, and now the question is whether, once the payments have been made, those tickets will return to the system in the form of savings or if they will seek to go to the dollar.

For now, the government has in its favor the sudden change of opinion of the international establishment, which is now decidedly favorable to the issue. A recent article from Financial Times, the bible of liberal economists and the capital market, points out that, far from causing an inflationary crisis, in developed countries there could even be deflation.

“The magnitude of the current crisis means that even the most direct monetary financing, such as delivering cash to people, should remain an option. The debate should not focus on whether there can be monetary financing, but on keeping the process under control. through independent central banks, “states the FT editorial.

Of course, in Argentina the situation is quite different. And that’s why orthodox economists are already asking what the antidotes should be to prevent money issuance from leading to an inflationary escalation: cutting public spending.

When there is not much left to cut in the field of public works, that can only mean one thing: attacking the taboo of wages in public employment, a topic that is beginning to be mentioned in the consultants’ reports.

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