The article analyzes how public debt can affect investments and discusses proposals for suspending debt payment. According to the text, these proposals are usually made by candidates with little chance of winning, as they are bombastic measures that can win votes.
The text presents two ways the government can default on public debt. The first is forced renegotiation, exemplified by the Collor plan, when people's investments were transformed into compulsory deposits with withdrawal restricted to a specific deadline. The second is when inflation exceeds the interest rates on financial investments, as occurred under the Bolsonaro government, when the burden of public debt decreased through this mechanism.
The article observes that, in both cases, interest rates subsequently rose again and people who managed to maintain their investments recovered what they had lost. This data suggests that measures of this type tend to have temporary effects on the value of investments.
If the government were to adopt this measure, the outcome would be a drop in the value of financial investments and a general disorganization of the economy. The text concludes that the probability of this scenario is very low, although it does not present the complete reason for this statement.
