How Socialism Ruined My Country

Is Bernie Sanders right? Are people living under socialism better off? Brazil is a good case study. Felipe Moura Brasil, a journalist and Veja magazine columnist, explains how his country has fared under socialism.
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Script:

Many American millennials seem to be drawn to socialism.

They came out in big numbers for Bernie Sanders in the 2016 presidential primaries. They rail against capitalism on their college campuses. They wear Che Guevara t-shirts to signal their socialist virtue.

I know a lot about socialism. I live in Rio de Janeiro and I work throughout Brazil as a journalist for a popular magazine.

In the early 2000s, Brazil’s economy was growing rapidly.

The government had enacted economic and monetary reforms and divested holdings in some state-run companies, giving the private sector more room to breathe.

Inflation—a chronic problem in Brazil—was dramatically reduced.

Foreign investors poured into the country, eager to catch a portion of our expanding economy.

The future seemed promising.

But today, our economy is in shambles, unemployment and debt are massive and powerful politicians are being investigated for involvement in the largest scandals of fraud and corruption in the country's history.

What happened?

In 2002, a socialist politician named Lula da Silva ran for the presidency. He was a socialist, but painted himself as a modern, cool kind of socialist. He would be the politician who would heal national divisions and unite everyone. He even had a nickname, “Lulinha paz e amor”, which means "Little Lula peace and love" in Portuguese.

But the old message about the need for income redistribution to decrease inequality was still there. The media, academic elite and celebrities assured Brazilians that by transferring the money from the rich to the poor, the poor could finally be richer.

But the only ones who really got rich were Lula and his corporate and political friends.

It only got worse under his successor, Dilma Rousseff.

The socialists increased government spending, deficits, and debt. They called it a stimulus.

They increased the minimum wage and the benefits of social programs. They called it social justice.

They increased the salaries and retirement benefits of the civil service. They called it investing in the future.

They handed out thousands of jobs in the government and state-owned companies as favors to their political allies. And they called it good governance.

It worked for a while. Socialism always works at the beginning.

But government spending just kept going up and then Lula’s socialist paradise fell apart, and the economy fell with it.

The outcome: from 2008 to 2015, government spending grew nearly four times as fast as tax revenue.

The economy shrank 3.8 percent in 2015, the worst result in 25 years.

That same year, a World Bank survey found Brazil’s economy to be one of the world’s worst. Out of 189 countries, we were the 16th hardest place to open a business, the 60th most difficult nation in which to register property, and the 12th most complex place to pay taxes.

Economically and morally, the almost 15 years of socialist policies have greatly harmed Brazil. We also remain among the world's leaders in murder and robbery, and we rank near the bottom of industrialized nations in terms of education and health care.

For the complete script, visit https://www.prageru.com/courses/foreign-affairs/how-socialism-ruined-my-country

Many American millennials
seem to be drawn to socialism.

They came out in big numbers for Bernie
Sanders in the 2016 presidential primaries.

They rail against capitalism
on their college campuses.

They wear Che Guevara T-shirts
to signal their socialist virtue.

I know a lot about socialism.

I live in Rio de Janeiro and I work throughout
Brazil as a journalist for a popular magazine.

In the early 2000s, Brazil’s economy
was growing rapidly.

The government had enacted economic
and monetary reforms and divested holdings

in some state-run companies, giving
the private sector more room to breathe.

Inflation - a chronic problem in Brazil -
was dramatically reduced.

Foreign investors poured into the country,
eager to catch a portion of our expanding economy.

The future seemed promising.

But today,
our economy is in shambles,

unemployment and debt are
massive and powerful politicians

are being investigated for involvement
in the largest scandals

of fraud and corruption
in the country's history.

What happened?

In 2002, a socialist politician named
Lula da Silva ran for the presidency.

He was a socialist, but painted himself
as a modern, cool kind of socialist.

He would be the politician who would
heal national divisions and unite everyone.

He even had a nickname,
“Lulinha paz e amor”,

which means "Little Lula peace and love"
in Portuguese.

But the old message about the need for income
redistribution to decrease inequality was still there.

The media, academic elite
and celebrities assured Brazilians that

by transferring the money from the rich to the poor,
the poor could finally be richer.

But the only ones who really got rich were
Lula and his corporate and political friends.

It only got worse under his successor,
Dilma Rousseff.

The socialists increased government
spending, deficits, and debt.

They called it a stimulus.

They increased the minimum wage
and the benefits of social programs.

They called it social justice.

They increased the salaries
and retirement benefits of the civil service.

They called it investing
in the future.

They handed out thousands of jobs
in the government and state-owned companies

as favors
to their political allies.

And they called it
good governance.

It worked for a while.

Socialism always works
at the beginning.

But government spending just kept going up
and then Lula’s socialist paradise fell apart,

and the economy fell with it.

The outcome: from 2008 to 2015,
government spending grew

nearly four times
as fast as tax revenue.

The economy shrank 3.8 percent in 2015,
the worst result in 25 years.

That same year, a World Bank survey found
Brazil’s economy to be one of the world’s worst.

Out of 189 countries, we were the 16th
hardest place to open a business,

the 60th most difficult nation
in which to register property,

and the 12th most complex
place to pay taxes.

Economically and morally, the almost 15 years
of Socialist policies have greatly harmed Brazil.

We also remain among the world's leaders
in murder and robbery,

and we rank near the bottom of industrialized
nations in terms of education and health care.

Americans take it for granted that
they can be born into the lower class

and reach the middle
or even upper class.

Many Brazilians take it for granted
that they can’t.

But finally some things
are starting to change.

There may be reason for hope.

Today, more and more Brazilians see that capitalism
and limited government are the only way forward.

Thankfully for Brazil, Lula has been charged
in several lawsuits for corruption,

involvement in a criminal organization,
influence peddling, money laundering,

and obstruction
of justice.

Rousseff was impeached in 2016
for falsifying the government’s finances,

and illegally using money from state-owned
banks to run the government.

This crisis prompted the new government
to freeze federal spending,

reduce the government’s role
in state-owned companies,

and to encourage some of the massive
federal workforce to resign.

No one knows whether these basic measures
will be enough to rescue Brazil economically.

Truthfully, the damage has been so extensive,
it may take decades for the country to recover.

But if we do, it won’t be socialism
that saves us.

American millennials,
take note.

I am Felipe Moura Brasil
for Prager University.

Hi, Everyone,
I am Felipe Moura Brasil,

a journalist
and columnist in Brazil.

PragerU videos have made a deep
impact on me and many Brazilians.

If you have been impacted by these videos
too, please consider making

a donation to PragerU.

Your support will help ensure
that PragerU can keep these videos free

and continue
to make a difference.

Please donate today.

Chao, from Brazil.