Lindbergh rebuts Haddad, criticizes zero deficit and defends government spending

Federal deputy Lindbergh Farias (PT-RJ) refuted this Sunday (10) the statement made by the Minister of Finance, Fernando Haddad, that “deficit does not make growth”, after a clash between the minister and his girlfriend, deputy Gleisi Hoffmann (PT-PR). According to the PT member, the deficit appears at a time of “economic slowdown” and “does not generate growth”.

“In fact, deficits appear more frequently in times of economic slowdown. It is now unquestionable that fiscal stimuli in situations of low growth, such as we must face in 2024, do have a huge role in GDP growth. Zero deficit target in 2024 could lead to a contingency of 53 billion in PAC works. Are we going to cut My House My Life? Cut public investments?”, wrote Lindbergh on the X network.

Both Lindbergh and Gleisi Hoffman had been pushing in recent weeks for the government to change the goal of zero fiscal deficit to a deficit of at least 0.5% of GDP in the Budget Guidelines Law (LDO), but Haddad resisted and convinced Lula to maintain the objective of balancing the accounts.

During the PT conference, held on Saturday (9), Gleisi criticized Haddad’s insistence on a zero deficit and said that the government “cannot allow contingencies in the Budget, neither in investments nor in social programs”. However, the minister disagreed with the statement and cited recent failures that did not necessarily result in economic growth.

For Lindbergh, the goal that the Lula government should pursue is “the target of average growth of 4% per year”. He cited a post by economist Olivier Blanchard, former chief economist at the IMF, about the risk of “severe recessions and the rise of populist parties” if primary deficits are eliminated. “Blanchard is not left-wing, he is a liberal and today considered one of the greatest macroeconomists in the world. He talks about the political risk of trying to reverse deficits into surpluses abruptly and leading to an economic slowdown and the victory of far-right governments. Let’s not play with fire”, wrote the PT member.