Words are like children: we create, but one day they leave home and fall into life. “Economy”, for example. Today it is a boring word: it refers to a tie, bank, spreadsheet. But she was raised in a home that was more cozy than Excel. This girl's parents are the thinkers of Ancient Greece. “Eco” comes from oikos, "home". The “nomia” means “rules”, “norms”. "Economy", then, is "house management", just as "ecology" is "knowledge about the house".
In order to manage a house decently, a family cannot spend much more than what comes in income. It does not happen to make monstrous debts. But just as there are those who live in apartments that are more expensive than their wages, there are countries that spend more than their income allows.
Until another day, in the early 2000s, the normal thing for a country was to owe 40%, 50% of what it produces in value over the course of a year (its GDP). After the 2008 crisis, the one whose waves only reverberated here since 2014, the ruler went up. In developed countries, it was close to 100% of GDP (or more – in the case of the USA and southern Europe). Here, it jumped from the 50% range to almost 80%.
To whom do countries owe so much? For themselves. Governments have something you don't have at home: money printers. When they turn on these machines, the money that leaves is counted as debt – and it is not good that this debt comes close to GDP, because then the money itself loses value, and the printers become useless: your country will start to use another country's money, and you, the ruler, lose control.
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To test this, go to Argentina with only reais in your pocket. It will be normal life. Their currency is so depleted that Argentines accept reais as if they were dollars – meanwhile, within Brazil, Argentine pesos are as well received as real estate bank notes.
The 2008 crisis was purely "economic". The global financial system was in a zone (as it was in 1929), and countries cleaned their homes with debt-based detergent. Such debts have continued to grow since then, and are at record levels across the planet. The forecast was that, soon, they would start to fall, with measures of “fiscal austerity” (jargon for “not spending more than you earn”).
But there came another problem. Now, “ecological”. Not ecological in the sense of the one who resolves himself by planting a tree and riding a bicycle, but in the original sense, roots, Greek for the word: “knowledge about the house”. The coronavirus made the house fall. And that calls for a new set of rules for the house – war rules this time, with all the countries in the world testing new limits on their indebtedness.
Brazil's is expected to exceed 90% of GDP, for the first time in history; that of developed countries, much more than that, returning to levels that have not been seen since World War II. Understand all this in depth here in the SUPER cover story of June. And, it’s worth remembering: if possible, stay in oikos until the dust settles.