You are Ximena Arrieta-Valdés, Minister of Finance of the Republic of Costaria. The country is in recession, the central bank has almost no room left to cut, and this afternoon the Cabinet must decide how to spend a CO$30 billion rescue package. Three colleagues have asked for CO$48 billion between them. The first vote, on how the money is split, is at 15:30.
The situation
It is 15 September 2026. A fuel-price shock pushed inflation to 4.2% and then tipped Costaria into recession: output has fallen 2.8% in four quarters, the Treasury puts the output gap at −2.5%, and unemployment has risen from 5.5% to 8.7%. Inflation is back at 2.4% and consumer confidence is at a ten-year low. The central bank has cut its rate from 4.25% to 1.50%; its liaison in the room, deputy governor Bruno Lastra-Peña, reminds everyone how little room is left.
The package is about a tenth of a CO$290 billion economy, and most of it will be borrowed. Public debt is 62% of GDP, part of it in foreign currency, and government bonds yield 3.50%. The welfare system is already adding about CO$8 billion over two years without any vote. The Treasury's briefing lists six levers, each with a range for its multiplier (the output each CO$ generates in a deep recession), a typical delay and the groups who feel it first. Its draft puts CO$5 billion on each, and nobody at the table has argued for it.
Paula Senra-Ochoa, Minister of Infrastructure, wants at least CO$15 billion for roads, schools, energy retrofits and broadband that will outlast the recession. Óscar Villalba-Rey, Minister of Labour, wants CO$9 billion for benefits and CO$6 billion for retraining: the queue at his employment offices has doubled. Ignacio Prado-Lucena, Minister of the Economy and leader of the smaller coalition party, promised voters relief and wants CO$10 billion of income-tax cuts and CO$8 billion off VAT. Their requests add up to CO$48 billion.