Friday, January 30, 2009


My daughter and I were talking the other day about how much Costa Rica has become like the U.S. This came out last night and it is amazing to see the similarities with Costa Rica and the U.S in these proposals. Makes sense huh, spend more money to get out of debt. Here again the weird thinking happening. I guess it comes from using monopoly money for too long!

Here is the Óscar Arias 29-point stimulus/rescue proposal
By the A.M. Costa Rica staff

Here is what President Óscar Arias proposed or included in his Thursday speech:

1. Authorize a 15-percent increase in non-contributive pensions, that is pensions that were not paid for by the recipient's work history. This is the fourth such increase during the Arias administration.

2. Provide weekend food for children and their families: Some 16,326 students in 37 cantons will receive vouchers exchangeable at local markets for about 70 percent of the nutritional needs for a family of four for the next three months. Arias will try to budget a similar program for 2009.

3. Provide an increase in the Avancemos program, a payment plan for school children, to include 150,000 youngsters, 28,000 more than now.

4. Write off debt for 2,100 families in the national housing program who have low incomes.

5. Increase borrowing limits by 335,000 colons ($605) so that each low-income family that seeks a housing loan will get about 5 million colons (about $9,070).

6. Lower the interest rate in state banks by 2 percent for housing loans up to 50 million colons (about $90,000).

7. Request the Authoridad Reguladora de Servicios Públicos to change its procedures so that decreases in the price of fuel are quickly reflected in the fares.

8. Seek passage of a law that would require employers to cut the hours of all their workers instead of firing some.

9. Promote work by Internet in the private sector with the hope that each workplace will save 100,000 colons ($180) a month in costs associated with employees being in the workplace.

10. Seek approval from the Asamblea Legislativa of a bill that would allow employers to have flexibility in work hours, such as in setting up a four-day work week. This plan has been in the hopper for years but is opposed by employee unions. Major companies, like Intel, strongly support the idea.

11. Provide scholarships for displaced workers with the Instituto Nacional de Aprendizaje so workers can learn a new trade.

12. Create a program to instill the business culture among young people under the sponsorship of the Ministerio de Trabajo.

13. Request the national student loan agency, Comisión Nacional de Préstamos para Educación, to put a moratorium on student loans and to give a six-month amnesty for borrowers who have lost their jobs.

14. Increase from three months to six months the period in which a discharged worker is covered by the Caja
Costarricense de Seguro Social, which includes the national medical plan.

15. Create an educational trust for the construction of schools. This appears to be a form of bond issue so that schools can be built now and payment made later. The price tag is 29 billion colons, about $52 million.

16. Construction of all the public works budgeted for the various ministries. This includes road work, housing, airports, health clinics and other public projects.

17. Seek the approval of an $850 million loan for highways, aid to municipalities and the metropolitan trains and public transport.

18. Seek approval of a $500 million loan to strengthen the Instituto Costarricense de Electricidad, the electrical generating and telecom company that used to be a government monopoly.

19. Seek approval of an $80 million loan to revitalize the Puerto de Limón and the adjacent community. This already has been announced.

20. Provide technical support to the municipalities to help them spend some 26 billion colons ($50 million) on infrastructure. This includes planning, engineering and assistance in letting contracts.

21. Strengthen the Banca para Desarrollo with an infusion of 222 billion colons ($400 million). The goal is to make financing available for small and medium businesses.

22. Promote the Plan Nacional de Alimentos so that food that is necessary for the residents of the country is produced by the nation's farmers.

23. Seek a reduction of 2 percent in the interest charged to small and medium business creditors by the state banks.

24. Seek a reduction of interest from 1 to 2.5 percent by cooperative lending institutions.

25. Issue a presidential decree to accelerate the depreciation schedule of capital goods held by businesses so that there is a reduction in their income tax, thanks to higher write offs.

26. Require the state to pay for goods and services within 30 days so that small and medium businesses do not have to wait for long periods for their payments.

27. Provide $117.5 million to state banks to increase their liquidity. This already has been approved.

28. Support a law that would allow state banks to lend in subordinate positions and establish the way such loans are figured for the banks' balance sheets. This is now not allowed, but private banks can do so.

29. Ask the Asamblea Legislativa to approve a $500 million loan from the Banco Interamericano de Desarrollo for the Banco Central de Costa Rica so that the bank can finance activities like exportation. The development bank already has approved the loan, but local approval is needed.

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