If you and I ran our household like the government of Costa Rica, we would be living in a box under a bridge (provided the bridge is still standing… many bridges in Costa Rica are way past their life expectancy).

I live in Costa Rica and I am staying to watch the parade.  We have a government here that borrows 45% of its operating budget, has a $500 million US tax plan to just keep going, thrown back at it with an archaic court system challenge (based in Napoleonic  law, prove that you aren’t guilty), lost its head tax collector, because he and the wife didn’t pay their property taxes and under-estimated their investment values.  A government that lost the traffic camera cash cow due to another challenge.  A government that  had a protest on a highway because the local residents didn’t want to spend a few extra cents per day on tolls.  A government that  gave a lucrative consulting contract to the family of a minister and then had the contract recommended by senior politicians.  A government that can’t get people to pay sales taxes, property taxes, corporate taxes because most never have.  A government that is setting up a totally secret police and judicial system to review human trafficking –  but the results will not be available for print and anyone who reports will go to jail.  A government that tramples on the rights of homeowners who have paid taxes and for services for years and then tells them they don’t own the dirt.  A government that  tells part time residents that anyone who is a citizen can squat on their property and eventually get title, or, that powerful and connected citizens with convicted lawyers (abogados) can take over the lands of others because they want to build plastic hotels for high rollers who don’t come anymore.  A government that can’t get a consensus with other Central American countries to curb the gush of drugs that tsunamis through the country.  A government where  the husband of the President has a car accident and can only produce a long expired drivers license who then takes himself to a pay-for-care hospital and wouldn’t be caught dead in a CAJA (public health system) supported place.  A government that finds itself fighting with bus and taxi operators who are trying to offset the increases in gas costs.  A government that  tells expats that they need to pay more and then puts forward a nickel and dime stopgap budget taxing steak and kiwi fruit to try and bring in some money…  ANY money.

Sounds like your household? The bank would have closed your account and put you up for foreclosure long, long, long ago. The advantage of a country is that it can start to cannibalize itself, as the President is now doing,  saying she will take back any department/ministry surpluses (short term thinking versus long term planning) and start to sell the countries hard assets.. which translates into  land and buildings.  It’s  a slippery slope indeed. Kinda like robbing Peter to pay Paul?

The official line is of course “Pay no attention to the man behind the curtain” as soon, very soon, there will not be anywhere to run. Already the Moody Credit reporting agency has downgraded Costa Rica’s bonds and debentures lower, and there doesn’t seem to be much if any good news on the horizon. True, the tourist numbers are up for the year, as long as you include the expat trips for visa applications and the Nicaraguans who come just to work…  After they are taken out of the faulty mathematics, the numbers are down. And why should the tourists come? Petty and violent crime in Costa Rica is on the rise once again, and the police find themselves involved in many of the crimes, but at least they fired the Nazi cop who made headlines recently.

On the AMCosta Rica website this week it was clear the government is “painted into a corner and can’t find a window…”  The President also said a lot of her (Chinchilla) new plans required action by the legislature. She said action that was critical on some proposals the central government has submitted,  including one for issuing debt instruments (meaning borrowing more without the opposition parties being able to challenge the hocking of the family jewels).  The President admitted that the measures she is taking will not resolve the country’s financial problems. She said what was needed is a more progressive tax structure…”  in English, this means:   more taxes and user fees.

Oh, and by the way, even Mel Gibson is leaving Costa Rica, his place is up for sale, and even he hasn’t paid some of his taxes either.