Santo Domingo.- The fiscal and monetary policy implemented by the authorities has allowed Dominican Republic to surmount the modern world’s worse financial crisis ever, affirmed Leon bank president Carlos Guillermo Leon.
The banker said the adjustments and part of what’s being seen is the price that will have to be paid for the public sector’s injection of funds to maintain the economy’s growth. He affirmed however that the country isn’t in a situation that’s out of control and quite the contrary, it is highly controlled.
Leon said the Government can boast examples of control because the rates of exchange and interest are under control as well. “The administration, which we sometimes doubt, has given an example that it is able to curtail spending.”
“I believe that the people who are raising their voice to state their concern with the debt level are right to do so and a government does even better by drawing attention to the debt level which is worrisome,” he said regarding the country’s economic and financial stability.
“For that reason we see the difference, although the year in general has been good,” Leon added.
From: Dominican Republic, navarette
great job by the bureaucrats, BUT---- inflation is eroding people's income and confidence. Every thing has gone up in price: food, fuels, public transportation, everything. Only housing seems to remain the same. The poor get poorer, the rich get richer. That is the way I see it from the eyes of an American who has lived here for a year and half.
From: Dominican Republic, calle A.Portes
yes...the biggest problem that the DR faces is inflation and that has been obvious for some years now..I agree with that . I have not seen the break down of any index of consumer prices so it is hard to state what has risen the most .I do know that rents and fuel have jumped a lot and public transport a little but I have not noticed any substantial increase in the price of locally produced rice , chicken, sugar or beans .
Normally , inflation is caused by an increase in disposible income and is checked by increases in the interest rates .In the last year , Australia has been the most obvious country to attack their inflation by increasing interest rates .
In Santo Domingo and la Romana , the two areas I know best , there has been a most obvious increase in consumer spending but , from remarks made on this board , it would appear to be the opposite in Santiago and Puerta Plata , so that any action the central bank may make , such as raising interest rates, could cause problems .
From: United States
Richard-I agree with your point of view, however, that is the way it has always been in the DR and the natural trend for LAISSEZ-FAIRE capitalism, 80% of the weath go to 20% of the people. That is why such unequatable social and economic conditions create the most fertile ground for socialist and communist causes.
Different from the US which is highly regulated, less capitalistic and more of a social democracy which partakes in a redistribution of national income.
From: Dominican Republic, calle A.Portes
in relation to the rich getting richer and the poor getting poorer , this problem is caused ,in part , by the regressive tax system that we have in the DR , which impacts the hardest on the poor.It is also the same in the USA and all countries that have an emphasis on a flat rate of tax.
Also much of the problem of financial inequality is caused by the lack of proper education and skill training so that at present , much of the work force is not properly trained for the quickly changing economy and can not find work .
To reverse the trend of the rich getting rich and the poor getting poorer , there must be many measures put inplace that have a sound social basis ..
From: Dominican Republic, Puerto Plata
@guillermone: +1
1. "fiscal and monetary policy": grab all the cash you can and put it in CDs at the Central Bank, at astronomical interest rates. Result, in layman's terms: "no hay circulante".
2,"The adjustments and part of what’s being seen is the price that will have to be paid for the public sector’s injection of funds". Where does the public sector's funds come from? From the private sector: taxes, customs, levies etc etc. So, the price is actually being paid by Joe Public. Tighten your belt again, Joe, more to come...
The people responsible, supposedly in jail, have not contributed anything to "paying the price".
3.“The administration, (...) has given an example that it is able to curtail spending": No schnitt! Like cutting down the education budget. Not the officials' payroll.
So, Mr. Leon, from a banker's standpoint, you're probably right.
But 9,000,000 people out there might not agree.
Written by: juanb, 23 Nov 2010 1:33 PM
From: Dominican Republic
The paid government spokesperson (Little Ricky) has spoken.
But where are the jobs? Where is the money to fund our woefully inadequate education system if the economy is healthy? Why can't we find the money to pay our Police a living wage? Why do so many legislators get rich while in office? Why do we continue to allow rich criminals to go free?
We could probably save a lot of money if we stopped paying people to post on DT and elsewhere.
From: Dominican Republic
"in relation to the rich getting richer and the poor getting poorer , this problem is caused ,in part , by the regressive tax system that we have in the DR , which impacts the hardest on the poor. It is also the same in the USA and all countries that have an emphasis on a flat rate of tax."
Mr. Ricardolito,
Could you elaborate on this statement you made which I have copied above, particularly since I understood the USA to have a progressive income tax structure.
Thanks in advance.
Written by: Atabey, 23 Nov 2010 2:44 PM
From: United States, NYC
Juanb,
Correction, it's Doctor Ricardolito!! LOL Así que llámalo por su titulo correcto.
Written by: juanb, 23 Nov 2010 4:35 PM
From: Dominican Republic
Molondron:
Don't hold your breath waiting for a logical explanation. His job is to disseminate misinformation. He is not very good at it, but it pays his bills.
From: Dominican Republic, calle A.Portes
Molondron ..as my postings have been deleted by those who have such a limited education that they can not debate but simply erase ..or may be it is that they are simply ignorant , it is a little difficult to explain without having the posting deleted.
However all flat taxes such as we have here in the DR with ITBIS are regressive because they impact more on the porr people ..for example if you earn 10,000 pesos a month , then the 16 or 26 % tax that is paid on nearly everything a family buys every week is not such an imposition as it is on a person who earns only 4000 pesos . In the USA , there are flat sales taxes also on many items that are regressive. If a tax to be progressive then it will, for example, not apply to people earning less than 50,000 pesos a year .will be 10 % on incomes from 50 000 to 100,000 pesos , will be 15 % on income up to 150,000 pesos and so on until the rich may pay 50% on income over 500.000 .these are examples. cont
From: Dominican Republic, calle A.Portes
In some countries the tax rate on the rich goes to 60 % and this is normally called redistribution of income and is not favoured in the USA as it is thought , correctly to be socialistic.
There are other ways to make taxes progressive such as putting taxes on luxury items that the poor can not afford and by introducing property taxes on property over a certain level ...both these taxes are in place here in the DR ,,the only progressive taxes I think that we have here.
The problem with compliance with the tax laws is that a country needs very modern sophisticated computer systems that can catch all the companies and people who avoid tax ....and when they avoid tax , then the tax load falls on the poor who have no way of avoiding the direct taxes which are the sales taxes etc.
That is a simple explanation of progressive and regressive taxes ..I was raised in a country with a much more socialistic tqax system than here or the USA and feel it is more morally responsible.
From: Dominican Republic, calle A.Portes
The very strange thing is that I agreed with the initial posting from richard holding which said the rich were getting richer and the poor getting poorer for which he has plus 6 ...I was explaining that in this country that situation was inevitable as it is in the USA partially because of the t.ax system .
Unlike other writers here I am quite happy to elaborate on my statements and debate them ..I do not give pluses and minuses and if some one has a valid different point of view I am prepared to accept it even though I may not agree with it .
I hope that writers can appreciate the difference .
From: Dominican Republic, calle A.Portes
MOLONDRON I should have mentioned that most countries find that it is easier to raise their revenue from the regressive direct taxes that are hard to avoid ,,but if a country for example raised 200 billion dollars from direct taxes and then allocated spending of this revenue of say 90% to poor districts , then maybe it could be argued that the tax was progressive, but in real life this does not happen .
On the question of inflation ..inflation impacts mainly on the poor because the rich who have assets have the assets rising in value and can more easily afford the higher prices ..and that is why inflation must be considered the number 1 danger in the DR but it is difficult to fight ..that is another subject .
From: Dominican Republic, calle A.Portes
juanb ..I cannot be bothered to waste any time on remarks such as that which show that you are not capable of any debate on any subject ..I hope the next generation of Dominicans has more ability to debate a subject rather than simply write remarks more commonly found on street walls
Written by: DRmaker, 24 Nov 2010 1:38 AM
From: Canada
I am highly dissapointed that Gmiller 261 and Jim Harringtion have not yet posted on this article.
From: Dominican Republic, calle A.Portes
It really displayes the total lack of intelligence of most writers here who ask for an explanation and then can not be bothered to read it or comment on what was written . I can not remember when there was any proper debate but just a series of childish comments that are at the best boring and at the worst insulting to the intelligence of any educated person /
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Normally , inflation is caused by an increase in disposible income and is checked by increases in the interest rates .In the last year , Australia has been the most obvious country to attack their inflation by increasing interest rates .
In Santo Domingo and la Romana , the two areas I know best , there has been a most obvious increase in consumer spending but , from remarks made on this board , it would appear to be the opposite in Santiago and Puerta Plata , so that any action the central bank may make , such as raising interest rates, could cause problems .
Different from the US which is highly regulated, less capitalistic and more of a social democracy which partakes in a redistribution of national income.
Also much of the problem of financial inequality is caused by the lack of proper education and skill training so that at present , much of the work force is not properly trained for the quickly changing economy and can not find work .
To reverse the trend of the rich getting rich and the poor getting poorer , there must be many measures put inplace that have a sound social basis ..
1. "fiscal and monetary policy": grab all the cash you can and put it in CDs at the Central Bank, at astronomical interest rates. Result, in layman's terms: "no hay circulante".
2,"The adjustments and part of what’s being seen is the price that will have to be paid for the public sector’s injection of funds". Where does the public sector's funds come from? From the private sector: taxes, customs, levies etc etc. So, the price is actually being paid by Joe Public. Tighten your belt again, Joe, more to come...
The people responsible, supposedly in jail, have not contributed anything to "paying the price".
3.“The administration, (...) has given an example that it is able to curtail spending": No schnitt! Like cutting down the education budget. Not the officials' payroll.
So, Mr. Leon, from a banker's standpoint, you're probably right.
But 9,000,000 people out there might not agree.
But where are the jobs? Where is the money to fund our woefully inadequate education system if the economy is healthy? Why can't we find the money to pay our Police a living wage? Why do so many legislators get rich while in office? Why do we continue to allow rich criminals to go free?
We could probably save a lot of money if we stopped paying people to post on DT and elsewhere.
Mr. Ricardolito,
Could you elaborate on this statement you made which I have copied above, particularly since I understood the USA to have a progressive income tax structure.
Thanks in advance.
Correction, it's Doctor Ricardolito!! LOL Así que llámalo por su titulo correcto.
Don't hold your breath waiting for a logical explanation. His job is to disseminate misinformation. He is not very good at it, but it pays his bills.
However all flat taxes such as we have here in the DR with ITBIS are regressive because they impact more on the porr people ..for example if you earn 10,000 pesos a month , then the 16 or 26 % tax that is paid on nearly everything a family buys every week is not such an imposition as it is on a person who earns only 4000 pesos . In the USA , there are flat sales taxes also on many items that are regressive. If a tax to be progressive then it will, for example, not apply to people earning less than 50,000 pesos a year .will be 10 % on incomes from 50 000 to 100,000 pesos , will be 15 % on income up to 150,000 pesos and so on until the rich may pay 50% on income over 500.000 .these are examples. cont
There are other ways to make taxes progressive such as putting taxes on luxury items that the poor can not afford and by introducing property taxes on property over a certain level ...both these taxes are in place here in the DR ,,the only progressive taxes I think that we have here.
The problem with compliance with the tax laws is that a country needs very modern sophisticated computer systems that can catch all the companies and people who avoid tax ....and when they avoid tax , then the tax load falls on the poor who have no way of avoiding the direct taxes which are the sales taxes etc.
That is a simple explanation of progressive and regressive taxes ..I was raised in a country with a much more socialistic tqax system than here or the USA and feel it is more morally responsible.
Unlike other writers here I am quite happy to elaborate on my statements and debate them ..I do not give pluses and minuses and if some one has a valid different point of view I am prepared to accept it even though I may not agree with it .
I hope that writers can appreciate the difference .
On the question of inflation ..inflation impacts mainly on the poor because the rich who have assets have the assets rising in value and can more easily afford the higher prices ..and that is why inflation must be considered the number 1 danger in the DR but it is difficult to fight ..that is another subject .