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By Dr. Oscar Natalichio
In relation to the Government that applies it
a) Provides a definitive solution to the housing problem by eliminating the housing deficit.
b) It generates, from the beginning, thousands of jobs at different levels and activities, stable, legal and lasting.
c) It considerably increases the income of the national accounts and makes possible the growth of the GDP.
d) It strongly activates the Internal Market, in particular because the inputs used are almost entirely of local origin.
e) It allows to gradually reduce the deficit of the national budget until its elimination and also allows to end the external debt by canceling it.
In relation to creditors
a) It allows them to recover 100% of the borrowed capital.
b) In that period, the capital at the beginning of the plan continues to generate interest, now agreed.
c) It allows them to recover 100% of the interests agreed on the capital at the beginning.
d) You receive interest on the recycled interest applied to the plan.
e) In a maximum period of 35 years, it recovers the capital with all its interests.
It is a Plan that makes it possible to pay up to the cancellation of the foreign debt with a strong growth of the social economy with a reduction in poverty and unemployment. The accompanying example is built on data from Argentina, but the Plan is valid for any country that only meets this single condition: The amounts of interest on the public debt, included in the national budget as expenditures, must be higher to the deficit that said budget manifests.
The feasibility of the plan:
What reason could creditors give for not accepting a plan that guarantees the return of the borrowed capital and interest?
What reason could governments use for not trying to implement a plan that generates immediate employment, develops the internal market, reduces poverty, solves the housing problem, improves collection, increases GDP and ends indebtedness?
What reason could international organizations like the IMF, the World Bank and others use to reject a plan that allows governments to overcome poverty and eliminate the deficit; What allows creditors to redeem the loan and what gives them participation in monitoring the entire operation so that it is possible, transparent and efficient?
Brief references about the author of the Plan:
National Public Accountant. Economist. Writer. Four published books (the two contestants deserved the SADE's highest prize: the? Sash of Honor?). Extensive experience in managing companies in serious crisis (more than 25 years). Advice for SMEs. Development of Work Cooperatives. Conferences on economic topics.
Professor at the Popular University Mothers of Plaza de Mayo. Member of the Héctor P. Agosti Association
With the amounts recycled to the growth of the economy, a UNIFIED NATIONAL HOUSING PLAN will be carried out with the objective of building 6,340,000 solid and comfortable units in 25 years, generating more than 500,000 new permanent jobs from the first year of work.
PLAN TO REACTIVATE THE NATIONAL ECONOMY WITH CANCELLATION OF PUBLIC DEBT USING ITS EFFECTS FOR THE DEVELOPMENT AND GROWTH OF THE COUNTRY
The beginning in 2001 of a new millennium constitutes a propitious opportunity to carry out transcendental changes that allow improving the quality of life of millions of human beings who today live with poverty, misery and extreme marginality.
This opportunity will allow international financial groups to contribute effectively to this much-needed change in order to consider that we are entering the third millennium with a strong quota of humanism.
This contribution means: canceling the debt of extreme poverty countries on the one hand and approving the recycling of interest payments in the rest of the countries, on the other hand. The condition to access recycling is that the amounts thus considered be used (after eliminating the deficit) in plans that serve the development of their peoples and the elimination or reduction of poverty.
The Plan presented in this work points to the second case, and its numbers correspond to a theoretical model that is very close to the Argentine reality, but the plan itself can be applied, without complications, in any country that meets this single condition:
The interests or services of its public debt, included as expenses (real commitments to pay) in the annual national budget, must be greater than the deficit that the same budget contains.
Is this Plan feasible?… WITHOUT DOUBTS.
Not only does it help to reactivate the economy, reduce poverty and generate stable work, but it also enables creditors to recover the capital with its reasonable interests included, interests that they begin to receive from the very beginning of the plan.
Is there any reason for the international financial organizations to oppose it?… NONE.
These organizations and the industrial countries should support this exit, enabling agreements and approving preferential rates on recycled amounts. At the same time, the national governments that promote the Plan will have to complement its effects, which cancels the public debt with the greatest effort on the part of those who buy the houses, who are the least wealthy. This complementation is achieved by taxing the richest sectors with a higher rate. In this way, the effort will be more equitable and the National States will receive additional income that should allow them to effectively respond to the unresolved problems of health, education, and old age.
Prophets from around the world and times announced the year 2000 as the end of the world. For hundreds of millions of human beings the prophecy seems to be fulfilled. However, you can avoid:
The third millennium can and must be entered with a renewed spirit, globalizing cooperation and solidarity to achieve access to a dignified life for the human beings that inhabit our only planet, with work and hope for the future.
1. THE PLAN CONSISTS OF:
Recycle the amounts allocated in the national budget to pay the public debt services.
For this, the following conditions must be met:
a) That there is no deficit in the national budget and
b) If there is a deficit, it is less than the amounts assigned, in the same budget, to the payment of debt services.
In this way, the recycled amounts are made up of: the amounts necessary to cover the deficit plus those assigned to apply to the development of the country's economy. If there are surpluses, these surpluses (amounts not recycled) will be applied to the purpose that they were originally assigned, that is, to the payment of interest or debt services. The aforementioned surpluses are produced because the amounts available exceed those necessary for the development of the Plan.
Continue applying, on the amount of the public debt at the beginning of the plan and for the course of the 25 years that it lasts, the corresponding interests, trying through agreements that they do not exceed 6% per year. Said interests will be recycled with the exception of the surpluses already mentioned.
On the recycled amounts, apply the following criteria: to the amounts assigned to pay the budget deficit, a rate of 4% per year is applied. A 2% annual rate is applied to the amounts allocated to the development of the Growth Plan. These criteria (and rates) must be achieved with the international financial institutions, since they make it possible to pay both the interest and the principal on the debt, and only interest on recycled interest will enjoy a preferential rate.
With the amounts allocated to the growth of the economy, a UNIFIED NATIONAL HOUSING PLAN will be carried out with the objective of building 6,430,000 solid and comfortable homes in 25 years.
2. THE OBJECTIVES OF THE PLAN:
1. Achieve industrial reactivation in a massive and immediate way.
2. Drastically reduce unemployment and precarious work.
3. Definitively solve the problem of the housing deficit in Argentina.
4. Cancel the legitimate public debt and its interests definitively.
5. Do not resort to international financing again. Do not go into debt.
6. Achieve a national budget without deficit.
7. Reach the surplus in the national budget.
8. Improve the situation of retirees, health, education, culture and sports.
9. Build infrastructure works that improve the quality of life of citizens.
10. Rescue the role of the State in Great National Enterprises with citizen participation.
3. THE DATA AND BASIC CONDITIONS OF THE INITIATION OF THE PLAN:
1. The National or Provincial State will provide the public lands necessary for the construction of the houses. If there are no public properties in the determined places, they will be expropriated, compensating the owner preferably with other lands (exchange) or monetarily.
2. The National State, the Provincials and the Municipalities, together with the forces of society, in honorary commissions created for this purpose, will determine the places where the housing complexes will be built and their fundamental characteristics.
3. A national commission, made up of professionals and outstanding students of recent years, dependent on the faculties of Architecture, Engineering, Law and Economic Sciences, will elaborate the housing projects and the construction techniques to be developed by the construction companies, as well as the standard of materials to be used. Said commission will take into account the regional characteristics, habits and customs of each area and, very especially, the availability of land, tending to develop unique houses built on land no less than 10 meters wide and 40 meters deep. The commission will be responsible for preparing bids and their awards and for controlling the progress of the work. Priority must be given to companies in the construction site, and if there are none, always to local labor.
4. To access the plan, you must meet only these requirements: A) HAVE A STABLE JOB OR BE RETIRED; b) DO NOT OWN A HOUSING.
5. The subscription will be made through the CUIL or CUIT number (Unique Labor or Tax Identification Code) and the fee (whose average is 200 pesos per month) will be withheld by the Employer or the corresponding Retirement Fund and the employer will deposit the retained together with the monthly affidavit, form 931, National Registry of Social Security, as item III below Social Works, defined as? Contributions for the Unified Housing Plan ?. The current item III will become item IV and so on, including the new one in its description.
6. For the amounts thus collected, there will be two accounts in the Banco de la Nación Argentina: One,? Service Payments and Debt Capital? will have as owners (or recipient) the creditors of the public debt; 85% of the proceeds will be allocated there, and the remaining 15%, in another account destined to the? Project Support Fund ?, which will be administered by the University Commission and from where, among other issues, the promotion expenses will be considered. , execution and control of the plan, those referring to installment insurance so that the acquirer does not lose his subscription and payments if he loses his job, housing insurance, subsidies for very low-income people so that they can access housing, and Quota cannot be greater than 50% of a salary, nor 25% of the family group, and if it is, it is subsidized; and the infrastructure works necessary to consolidate the project, the rest.
7. The aforementioned 15% will contain three major items that limit its use: a) 5% destined to project expenses and to the deed of units; b) 6% destined to subsidies to complement quotas and c) 4% corresponding to developing the necessary infrastructure projects for each housing complex, infrastructure that will be built with current funds destined for Fonavi or similar.
8. The legislation must provide strong penalties for employers who make the withholdings and do not deposit it. Very executive sanctions to recover the amounts defrauded. They will have effective imprisonment and disqualification from exercising business activity. Construction companies that do not comply with the specifications and use materials of lower quality than specified or lower dosages will also be penalized, and the successful bidders who have forged their initial affidavit and have properties or income greater than those declared. Transparency and honesty in the procedures must be a condition without discussion.
9. A theoretical model of action is attached, developed in seven tables that accompany this work. In this theoretical model of action, the following starting data are used, which include:
a) Public Debt: In this work it is assumed to be 150 billion dollars. If it is less, improve the Plan and shorten deadlines. A report from the Argentine Ministry of Economy mentions that this is, as of September 2000, 138,794 million, which can place it, at the end of the year, close to 150 billion.
b) Public Debt Services: The rate calculated in this work is 6% per year. In reality the fees paid are higher than this. Therefore, they must comply with the agreement, although it must be renegotiated with the creditors, for this plan, the mentioned rate of 6% per year. A higher rate does not invalidate the Plan, it only delays its cancellation effects.
c) According to the enacted Fiscal Solvency Law, the deficit in public accounts should not exceed 4,500 million in the year 2,000. This work starts from that figure but also demands that this deficit decrease at the rate of 300 million per year, a not very large figure that can easily materialize, since the execution of the Plan itself will produce a strong and immediate reactivation of the economy granting the necessary funds for such reduction without resorting to cuts in other areas. This should not neglect the efforts that must be made to rationalize expenses and improve tax collection through reducing evasion and improving collection, especially income tax. (These are data from the 2000 budget, must be adjusted to the 2001)
d) It is based on the assumption of a global GDP of 300 billion dollars, and it is estimated that said GDP should grow at an average annual rate of 4%. The implementation of the Plan guarantees a large part of this growth.
e) It is estimated that the current population is 36.5 million people and that there is an average growth of 500 thousand inhabitants equivalent to a rate of 1.3% to 1.2% per year.
f) It is presumed that any of the other items included in the national budget for the year 2000 are repeated with similar behavior during the 25 years of execution of the Plan. For this reason, it must be considered that: any positive variation (favorable balances in the balance of payments, reduction of expenses, better tax collection, etc.) is not reflected and this would improve the Plan by shortening the debt cancellation time. Neither are possible negative variations that may occur and their inverse effect on the Plan considered.
10. The results of the Plan can be seen in the tables that accompany this work, but synthetically it generates:
a) Minimum annual additional income to the national budget of 900 million dollars.
b) Immediate creation of more than 500 thousand stable jobs.
c) Activity for more than 50 business associations where the product of national origin prevails almost exclusively.
d) Total cancellation of the public debt and its interests in a maximum term of 35 years
e) Definitive elimination of the housing deficit.
f) Completion of the Plan at 25 years with 6,430,000 new homes built.
By Dr. Oscar Natalichio
Prof. Univ. Mothers of Plaza de Mayo
Writer - Economist