El Ciudadano
Original article: Exministro Marcel: «La política económica está para reducir la incertidumbre y no para maximizar el dolor»
Former Minister Marcel: «Economic Policy Should Reduce Uncertainty, Not Maximize Pain»
«For me, the issue of how to confront a crisis is that economic policy should reduce uncertainty, cushion transient shocks, because that is much more efficient than maximizing pain,» stated former Finance Minister Mario Marcel during his opening speech for the academic year at the University of Talca.
The ex-state secretary emphasized that economic crises lead to social effects that are difficult to reverse, such as job losses, business closures, and increased student dropout rates, but that is why there is «macro policy: to soften the impact of shocks.»
«It probably won’t be able to prevent them, but it can help us adjust as necessary and not over-adjust, which is what often happens when more violent shocks occur,» Marcel suggested.
During his keynote lecture titled «Shocks, Economic Crises, and Policy Responses: Lessons from Recent Chilean Experience,» the economist reflected on the lessons learned from the crises faced in the country between 2019 and 2024, defending the importance of institutional stability and questioning strategies solely based on spending cuts.
In this line of thought, Marcel assessed the social outbreak, the pandemic, and the inflationary tensions that have marked recent years, asserting that the decisions made helped stabilize the economy, highlighting the crucial role of the Central Bank and the fiscal adjustments made in 2022 to contain inflation, which at one point exceeded 14%: «It was essential in order to quell the pressures on the economy,» he stated.
Kast’s Cuts
Marcel also discussed the current economic landscape and the measures promoted by Kast’s government in fiscal matters.
He pointed out that budget cuts must be analyzed alongside the tax reform initiated by the administration: «Spending cuts are part of a policy that also includes a tax reform that significantly reduces taxes.»
In this context, he questioned certain adjustment proposals associated with legally defined expenditures, such as the Guaranteed Universal Pension (PGU): «I hope the authorities can provide a better explanation, because if there is a law stating the PGU is a specific amount, then it’s difficult to understand how it could be reduced by 15%, as indicated by such instruction,» he commented.
The former president of the Central Bank also warned about the risks of starting from scratch with each change of administration: «We cannot reinvent the wheel every four years,» he stressed, emphasizing the importance of maintaining policies and initiatives that are already underway. «If every four years we start from zero, then the country will inevitably progress relatively little,» warned Marcel.
El Ciudadano
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