The deficit is not an accident. It is the inevitable result of a system that despises private property and elevates public spending to the level of virtue.
The Ministry of Economy and Finance has just confirmed what anyone with common sense already suspected: the result of the Global Public Sector was a deficit of 4.4% of GDP in the moving year ending in July 2026 (excluding the accounting effect of the Social Security Trust II). Revenues from the Central Government-BPS improved slightly thanks to the collection from the DGI and reached 27.9% of GDP. Primary expenditures remained at 28.7%. Interest rose to 2.4% of GDP. And the result of public enterprises worsened to -0.1% of GDP, dragged down by the accumulation of crude oil and derivatives stocks from Ancap.
Ludwig von Mises explained it clearly almost a century ago: when the State becomes a businessman, rational economic calculation disappears. There are no genuine market prices, there is no residual owner who bears the losses with their own assets, and therefore, there is no real incentive for efficiency. Ancap is no exception. It is the rule. It accumulates inventories, loses money, and the cost is socialized. Exactly what Hoppe describes as the logic of public property: those who do not own do not care, those who do not lose do not calculate, and those who spend other people's money always spend more.
The increase in revenue is not an achievement. It is, at best, the reflection of an economy that has not yet completely stopped and, at worst, the product of a tax pressure that extracts resources from the productive private sector to finance a state apparatus that keeps growing. Mises insisted that every deficit is, ultimately, a form of deferred tax. It is paid today with debt or tomorrow with inflation. In both cases, the saver, the worker, and the entrepreneur end up financing the party.
Hoppe takes the analysis a step further. In democracy, the time horizon of rulers shortens. They are not owners of social capital; they are mere temporary administrators with incentives to maximize present spending and push costs into the future. The result is predictable: chronic deficits, growing debt, and interest that begins to consume an ever-increasing portion of the budget. The 2.4% of GDP that Uruguay currently allocates to interest is not a natural phenomenon. It is the price of decades of political promises financed with money that had not yet been generated.
Meanwhile, the official discourse continues to talk about “sustainability” and “care.” The fiscal reality shows otherwise: the State spends more than it produces, public enterprises accumulate losses disguised as stocks, and the private sector bears the bill. There is no magic. There is only economic calculation, or its absence.
The figure of 4.4% deficit is not an abstract number. It is the accounting expression of a political principle: the preference for the State's present consumption over private savings and investment. As long as that principle is not reversed, fiscal debacles will continue to repeat. And the one who will end up paying for them, as always, will be the one who works, produces, and saves.
