Carina's debt is Paulo Guedes' profit.

Today I'm going to tell Carina's story. She's a mother of two children, Djulia, who is fifteen, and Matheus, who is ten. She raises her children alone, since her husband separated from her and now lives with another family. Carina isn't afraid of work; she's done a lot of things, and lately she's been doing general cleaning services as a housekeeper in various homes. With the pandemic, work is scarcer, and she's getting by with the meager help of emergency aid. 

Carina insisted on buying a good refrigerator because she wanted that comfort, at least after going through so much hardship in life. She paid in installments, and what cost one thousand two hundred reais jumped to two thousand and something reais. When the crisis hit and services decreased, she stopped making payments. The months without payment increased her debt, and today Carina already owes more than eight thousand reais to the bank. Most of this debt is interest. Carina's debt is practically unpayable. 

This story is fictional, but it closely resembles the drama experienced by 66% of Brazilians. Even before the pandemic, we were already living through a record level of household debt, with a growing number of heavily indebted individuals among those already in debt. With the pandemic, the situation worsened, and the government needed to do something. And it did. What did the Minister of Economy, Paulo Guedes, decide to do? It seems he took advantage of the situation to enrich himself. 

An unprecedented operation by Banco do Brasil resulted in the sale of a loan portfolio to BTG Pactual, a bank created by Paulo Guedes, at a bargain price, according to an article by journalist Dacio Malta. The portfolio contained what economists call "toxic assets," which are unpayable debts like those I described for my character Carina. A distracted reader might think that an unpayable debt like Carina's is a bad thing, and that it was actually a good thing for Banco do Brasil to have sold these toxic assets. But that's not the case, dear reader.

If a bank can buy a debt like Carina's for supposedly one thousand reais, it can call Carina and propose renegotiating an eight thousand reais debt, reducing it to two thousand reais, payable in ten installments of two hundred. Carina will be happy because she'll get a discount. And the bank will profit 100% in a single transaction. Now calculate what the bank will gain by buying 130 million reais in debts that would actually cost three billion reais. It's not just a lucrative deal. It's robbery. Especially when the beneficiary is the bank of the federal government's Minister of Economy.

The hell that Carina is experiencing is paradise for Paulo Guedes, his bank BTG Pactual, and the entire financial system. Carina's debt is profit for Paulo Guedes and all the banks. Brazil practices extortionate interest rates like nowhere else on the planet. So much so that economist Mauricio Gutemberg compared the rates charged by banks and financial institutions to a loan sharking system. In other words, it's a crime with the complicity of the Central Bank, and now we know, with the personal enrichment of Bolsonaro's economic advisor, Paulo Guedes. 

It is the millions of Carinas, Eduardas, Sérgios, the millions of families currently in debt, who truly matter and make Brazil happen. Renegotiating these debts as a policy to revive the economy, and not as part of a strategy for personal enrichment, should be part of a project to resume growth. 

Instead of this highly suspicious operation between Banco do Brasil and BTG Pactual, the Minister of Economy should be working with the Central Bank to coordinate an effort involving all banks in refinancing the population's debts. Large companies and business owners receive this assistance all the time. The government has already spent billions to forgive the debt of companies and business owners with the Federal Revenue Service and Social Security, through the Tax Debt Refinancing Program (Refis). Why not do the same for individuals? 

The National Congress has already inflicted defeats on the government at other times. This was the case with the emergency aid, which Paulo Guedes didn't want and ended up having to swallow. It was also the case with FUNDEB (National Fund for Basic Education), which the government didn't want and ended up having to swallow. It's time to put forward, through Congress, the agenda of refinancing the population's debt, as a strategy to confront the impacts of the economic depression.