Introduction
The governments of Andrés Manuel López Obrador and President Claudia Sheinbaum are facing a financial crunch, with insufficient public funds and an economy that has not grown—and is unlikely to grow—over the next two years. This issue isn’t exclusive to left-leaning or progressive parties; governments worldwide are grappling with limited financial resources.
Global Government Spending Trends
While some governments may be more disciplined and transparent than others, the reality is that all governments spend beyond their income. Some invest in expensive military assets like nuclear submarines, while others allocate funds for seemingly beneficial programs such as providing tablets to students—despite the lack of basic utilities like electricity and internet access.
Mexico’s Financial Situation
In Mexico, the government has spent 18.5 million millions of pesos this year and last, with over 4 million still in debt. This excessive spending has not resulted in any positive impact on the economic growth rate or overall well-being.
Case Study: Teacher Salaries
President Sheinbaum managed to offer a 9% salary increase for teachers, retroactive to January, which is above the inflation rate. However, when examining the situation closely, a pre-school and primary teacher earns 14,500 pesos per month. Consequently, this seemingly generous inflation-beating raise translates to a mere 30 pesos per day.
This situation highlights the broader issue of scarce resources, as the government’s expenditure on this salary increase amounts to 35,000 million pesos—a tiny fraction of the annual budget of 9.4 billion pesos.
Key Issues and Solutions
Excessive Spending and Debt Accumulation
The current situation necessitates a correction in government spending practices. The misconception that public funds belong to the government, rather than taxpayers, must be addressed. This mindset, described by Weber as “patrimonialism,” has led to the depletion of resources across various sectors, including critical areas like healthcare and education.
Infrastructure and Public Services
Hospitals are falling apart, schools lack essential maintenance, and the security situation remains dire. Despite President Sheinbaum’s strategic approach to tackling crime, insufficient detention facilities hinder the effective implementation of these plans.
Electoral Process and Legal Reforms
Upcoming elections for judges will take place without adequate funding. Moreover, recent amendments to laws requiring substantial financial investments have been implemented without the necessary resources. The core problem isn’t a lack of funds for the state but rather the demand for better resource allocation and economic growth.
Key Questions and Answers
- What is the main issue facing Mexico’s government? The government is struggling with insufficient public funds and an economy that has not grown, with excessive spending contributing to the debt accumulation.
- Why are teacher salaries seemingly low despite an increase? Although the 9% salary raise appears generous, when broken down daily, it only adds 30 pesos for pre-school and primary teachers, highlighting the broader issue of scarce resources.
- What are the consequences of inadequate government spending? Inadequate funding has led to deteriorating public infrastructure, unresolved security issues, and challenges in implementing electoral processes and legal reforms.
