Brazil’s Political Impeachment

brazil PresidenWhat’s going on in Brazil—other than the Zika virus and off-schedule preparations for the Olympic games?

You might have read that the leader of South America’s largest country—President Dilma Rousseff—is facing impeachment hearings at a particularly awkward time for the country: right before a million Olympic visitors descend on the country.  But what are the actual charges against the leader of the Worker’s Party in Brazil?

The unstated charges are that the country’s economy has been declining, and three million Brazilians have lost their jobs in the last year alone.  The country is battling a new round of hyperinflation, and citizens are angry.

The stated charges are more subtle.  Rousseff is accused of using state-controlled banks to finance popular social programs, including Bolsa Familia, which gives cash to poor Brazilian families who send their children to school and ensure they get vaccinations.  The government was putting money in the banks to fund these programs—until it didn’t, and the banks started complaining that they were feeding the poor without being fed themselves.  These social payments, Rousseff’s accusers say, bought her the re-election in 2014.

How much are we talking about?  In 2013 and 2014, the Brazilian government racked up $25 billion in debts to the banks, which Rousseff allies refer to as credit.  Those debts are being paid off as you read this, but another $4 billion debt was recently uncovered, used to provide low-interest loans to family farmers.

There are legal questions about whether these activities were, strictly speaking, actually illegal, but that may not matter in a country that is facing down a depression, whose citizens are angry with their president.  The impeachment is likely to be a political judgment, with Brazil’s Senators acting as a jury deciding the political merits of the case.  Look for a new President acting as host to the Olympic visitors who are willing to brave the Zika virus.


About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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