Sergey Glazyev: the Russian Ministry of Finance decided to cancel economic laws
From: On The Eve, 21.01.2016 11:10 MSK (13:10 ECx)
– “The proposals of the Minister of Finance to reduce the budget by 10% is an attempt to repeal economic laws. Comments about this Накануне.RU the adviser said the Russian President, economist Sergei Glazyev.
“If he wants to achieve stabilization and growth, is nonsense. Economic theory suggests that to achieve these goals, we need to stimulate demand, investment, to ensure the stability of the national currency. And budget at the same time must ensure the achievement of these goals. The Finance Ministry is trying to respond to falling incomes by simple sequestration of the budget – from helplessness, incompetence, unwillingness to work with the sources of income and the incomprehension of how modern economic growth, “expressed the opinion of the economist.
In his opinion, today it is necessary not to reduce costs to promote investment and spending on science, and “to increase five times”, if the task is “out of the crisis”.
“Not all problems should be resolved through the budget. It can reduce the cost of investment, if the development institutions compensate for these reductions and they would multiply. We could rely on multiple funding of public investment, if monetary authorities have implemented the concept of the trust money issue, which we discussed, under the agreed indicative business plans,” – said Glazyev.(…)“
– “(…) In his opinion, the budget sequester is a “last measure, when the state is helpless”. “De-offshorization only current capital could bring the budget at least one trillion of additional revenues. The Primakov government, caught in a more difficult situation than they are now extremely wary of the idea of budget cuts to stabilize the economic growth. Today there are no disadvantages of the proposals for sound economic policy and tax maneuver”, – said the academician.
The main reserve of growth, in his opinion, today is the transition to the refinancing development institutions through credit issue of the Central Bank. “The attempts to create them on a budget – not a serious idea. They were 10 times smaller than it should be. The experience of the BRICS countries shows that all development institutions are working through this mechanism – the Central Bank pass through him, connecting commercial banks, which are responsible for the repayment and successfully provide economic development. But of course, this must be balanced: we need strategic planning, the system of mutual responsibility of business and government where business takes obligations of production growth and modernization, and power – stable macroeconomic conditions and cheap credit resources“, – said Glazyev.
We will remind, the Russian government is actively discussing the issue of reducing Federal spending by 10%, which was announced at the Gaidar Forum. Meanwhile, the chamber of the opinion that this measure is unjustified, because the money’s in the budget, as well as opportunities for additional replenishment. In the state Duma also “saw” sabotage in spending cuts.“