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salish sea

Moody's and CR Deficit -- predictions?

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Many Ticos readily share income and benefits/ As to numbers who knows exactly, however you can take the people you know and extrapolate those numbers to some extent. Also again can't remember where I read this information, but salaries for government employees are a fair amount higher then the general working public.

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Okay, SCORP, so does it surprise (or offend) you that ". . . salaries for government employees are a fair amount higher than the general working public"?

 

I'm not clear just what a "fair amount higher" means in actual colon terms, but when you consider the nature of public employees' jobs versus the "general working public", it shouldn't come as a great surprise that the public employees may be paid more.

 

Consider that the average wage of the "general working public" includes legions of very low paid agricultural workers, construction laborers, store clerks and the like. Few (I'll wager none) of the public employees cut sugar cane or pick coffee for a living. So the "general working public"'s average income is significantly reduced by the incomes of those low wage earners. By contrast, the engineers, physicians, nurses and technicians of all stripes who work in the public sector do earn higher wages, but their work requires more education, more experience, entails greater responsibility and has much more significant consequences. Think about the contrast between the work done by (say) the surgeon who opens up your chest and the campesino who picks your coffee. Which one deserves a greater income?

 

And again, just how many of these lavishly compensated public employees are you personally acquainted with?

 

Edited by David C. Murray

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Okay, (deep breath), but what do you think CR is actually going to do? My prediction -- Jim did ask -- is that La Presidenta Laura will kick the can down the road and leave it to the next president (Johnny Araya?) and his/her ministers to solve. At some point, Moody's and the World Bank will impose stringent (imo ridiculous) requirements, with a lot of government layoffs and reduced services, not to mention, a severely depressed economy the result. (Maybe the World Bank has learned something from their past mistakes? I fear not.) This scenario will not have a great effect on either wealthier Ticos or the bulk of extranjeros, but for the bulk of the people here, it will be another matter.

 

(And, no, these things *never* happen in the US. The housing bubble? Well, of course the mortgage bankers all paid! Derivatives that nobody understood, but made lots of money? Of course they all went to jail. Were people's homes ever repossessed illegally with no repercussions on the part of those who signed the illegal/flawed paperwork? Oh, that could never happen.....)

 

Think maybe I need to take my meds now.....

 

Gayle

Edited by salish sea

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Ok getting back on topic, I did a little research and found in 2009, the Costa Rica government spent $1,873,700,000 in salaries and $785,315,000 on pensions, the total expenses that year for the government was $5,613,477,000. Salaries and pensions amounted to 47% of the total.These two categories were by far the highest of all other categories of expenses. As far as the private sector salaries it really does not matter as it is not a government expense and are not paid from taxes. DONE

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There's no disputing your numbers, but where's the surprise? Would you not expect labor intensive/personnel intensive activities, whether in the public or in the private sector, to have substantial personnel costs?

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Where does the CR Government get the money to pay the "Auginaldo" each year to their public employees and CR Pensionados??

Edited by tibas9

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Where does the CR Government get the money to pay the "Auginaldo" each year to their public employees and CR Pensionados??

 

It appears they borrow each year to cover their deficit with the interest on the debt eating away more and more of the operating budget (See US)

Edited by jimvignola

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Here's a link to the article I referred to earlier stating that more than 1,000 public employees make 5 million colones (10,000 dollars) per month.

 

http://amcostaricaarchives.com/2013/04/central-government-readies-another-package-of-fiscal-reforms/

 

I don't think I ever said that there aren't a lot of people underpaid and/or living in abject poverty. It's the same in the U.S. and is deplorable. I merely mentioned that there (also) are a lot of people, both Ticos and expats, with a lot of money in this country. And there are a lot of people who don't pay the taxes they owe. The difference between here and the U.S. is that the IRS does a better job of policing and collecting past due taxes. Not great, but better.

 

This post started out as a comment on unpaid taxes in this country. It has nothing to do with what happens in the U.S. in this particular case. I do believe that if the government did a better job of keeping track of unpaid taxes and collecting them via garnishment of wages, the deficit would be reduced. Not greatly, but some.

 

Another big issue is the embezzlement/misappropriation of public funds. Cases are constantly being reported, and the embezzlers seem to run the gamut from clerks to ministers. When caught and convicted they are released or sentenced to do public service.

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At the risk of changing the subject, it seems to me that the problem lies not in public expenditures which, for the most part, eventually make their way back into the economy but rather on the revenue side. To be sure, a lot of folks in Costa Rica live at or near a subsistence level, but many others do not. The problem, as I see it, lies in the government's inability to collect sufficient tax revenues to support legitimate public spending.

 

While I have grave reservations about flat (regressive) taxes, given the government's inability to make an income tax work, my thought is that a "value-added tax" would make the most sense for Costa Rica. Because the actual assessment is made at each step in production and distribution (from harvest to consumption) and passed on from step to step, a VAT would be the most difficult tax to avoid.

 

Were it mine to do, I'd do away with all taxes in Costa Rica save for a VAT. No more income tax. No more property tax. No tax except the VAT.

 

As always, your mileage may vary . . .

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There's no disputing your numbers, but where's the surprise? Would you not expect labor intensive/personnel intensive activities, whether in the public or in the private sector, to have substantial personnel costs?

 

 

 

 

I guess you don't remember a few years ago when a review was done on the caja system and the finding were they were overstaffed, overpaid and inefficient. I would think this also applies to other government agencies as well

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Bill, you wrote, "I guess you don't remember a few years ago when a review was done on the caja system and the finding were they were overstaffed, overpaid and inefficient. I would think this also applies to other government agencies as well"

 

I do, indeed, recall reading that, and I hardly dispute it. Nor do I dispute that the same might apply to other government agencies, as well. I recall reading a couple of other news stories about the CAJA, too. One reflected that, in the main maternity hospital, routine prenatal ultrasound exams were being scheduled ten months out for lack of staff resources. That was several years ago. The other was that the pathology lab in one of the major hospitals was some 250,000 (yes, a quarter of a million) pap smear examinations behind for the lack of staff.

 

So, does the CAJA suffer from a lack of resources? Maldistribution of staff? Inefficiency? Likely, but in many instances, it could be said, too, about non-government organizations.

 

The fact is that all organizations, public and private, have certain inefficiencies built in, and the larger the entity the less efficient it is likely to be. Compare, for example, a Mom 'n' Pop pulpuria with a Walmart. What's your guess about how many wasted man-hours are clocked at the each?

 

Edited by David C. Murray

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Dave, I agree with you, but the subject was Costa Rica losing their credit rating with Moodys and overspending is one of the reasons why. But like many have said on this topic, collecting taxes is also a big part of this.

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Here is an article for your consideration:

 

Which Public Institutions Spend Most On Wages?

http://qcostarica.com/edition/which-public-institutions-spend-mos-on-wages/

 

According to the report by El Financiero, the MEP spends ¢991.7 billion colones annually on wages, while the CCSS ¢976.1 billion.

and: However, if ordered by public institution with its percentage of the annual budget consumed by salaries, the Poder Judicial tops the list with 88%, the MEP with 63% and CCSS with 40% of its spending on salaries.

 

So 60% of CAJA is not spent on salaries.

 

Dana

Edited by DanaJ

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