How does that little saying go? “If it looks like a duck, quacks like a duck and walks like a duck, it is probably the dollar disguised as a colon.” Can anyone recall such a dollarized economy and indeed a society so dependent on a foreign currency and yet remains in deep denial all in the name of some puritanical nationalistic pride to “Control our own economic destiny?”
I want to make sure that I understand this correctly.
Costa Rica borrows in USD, its interest rates are in USD, it must pay back the massive foreign debt in USD, it collects taxes and duties in USD, automobiles are sold in USD, hotels rooms + food + yoga are in USD, even prostitutes charge in greenbacks, homes are bought and sold in USD and even rents are calculated in USD.
So where does the colon come in except at the toll booths, grocery stores and restaurants who adjust their prices in accordance with the colon to dollar exchange rate. (Inflation is so bad that you need to order dessert with your entrée or the price might go up while you wait.)
Does our government announce the deficit, imports and exports in colons? Not at all.
By all rights, the retail price of gasoline should be going down. However, it is imported and purchased in dollars, in which case we pay more at the pumps with our hard earned colons to offset RECOPE not refining and the USD becoming so much stronger than the national currency. The government is quite pleased with all this turkey dance. After all it receives a 30% sales tax on the pump sale and a sales tax on the importation of gasoline and/or diesel.
Similar is electricity. All most all purchasing costs are in dollars while sales are in colons; adjusted of course so the increased price to the consumer which kicks out more tax money to the funny government who spends it.
Life is more expensive for both dollar earners and colon earners alike. Just when you are “pleased as punch” that your currency increased in value, everything from gas to chicken goes up in price accordingly. (I never seem to see prices come down?)
Wave the red, white and blue flag, like it or not Sir Paul McCartney is being paid in dollars, will pay his crew in dollars, tickets are sold in dollars and they will pay departure taxes also in dollars.
Will there ever be a time when the two currencies are balanced, when we know what the cost of doing business will be and that the importer will get the same shake as the exporter? A simple question, how can we or will we ever payback all of our loans? Consider that 40% of the government budget is (a) in dollars and (b) needs to get paid back somehow.
We are a de facto dollar economy and should start now to officially adopt that currency.
If one didn’t live here and read this article, one may believe that there would be no reason for a tourist to use colones in Costa Rica. While this may be true in the tourist traps and gringo-dominated areas dubbed “gringolandia” by the local people, I have not found it to be true. Of course, any non-self-sustaining small country does substantial international trade in dollars or euros, as these are the currencies of international trade. While other countries have adopted the dollar, adoption of another country’s currency is a foolhardy proposition that places too much trust in the country that controls the value of the currency. If the Republican party in the US gets control again, they could easily destroy the world economy. Those not following the US political climate may be surprised to know that the country is more economically and politically polarized than it has been at any other time in the past century, with a wealthy few controlling the political and economic climate. The Republican-led House of Representatives has just proposed a budget
that will take benefits from the poor while spending more on the
military and giving tax breaks to the wealthy. The Wal-Mart heirs alone have more wealth than the bottom 40% of the US population. The ultra-wealthy are buying up politicians like they’re trinkets, saturating television with dishonest campaigns against politicians who do not support their agenda. This corrupt system has already crashed the US (and by extension the world) economy once in the past decade, allowing the wealthy to buy up everything at bargain prices while inflicting misery on the masses, and proving that the US economy is not “too big to fail.”