Lula’s Third-Term Heist: Squandering Hundreds of Billions While Venezuela Laughs Off $1.74 Billion in Brazilian Taxpayer Money
As of January 11, 2026, the Brazilian people have every right to be furious. President Luiz Inácio Lula da Silva’s third term has become a textbook case of fiscal irresponsibility, reckless spending, and ideological favoritism that treats public money as if it belonged to a private slush fund. While millions of Brazilians face skyrocketing food prices, crumbling public services, and salaries that buy less every month, the Planalto Palace continues to burn through hundreds of billions in hidden “off-target” expenditures, lavish international travel, and a shocking refusal to recover one of the largest foreign debts ever owed to Brazil: Venezuela’s staggering $1.74 billion default.
The Hidden Billions: Creative Accounting on Steroids
Lula’s administration has turned “off-target” spending into an art form. These are expenditures the government simply declares exempt from the fiscal rules it helped write—allowing it to spend wildly without the numbers appearing in the official deficit calculations. By the end of 2025, the total had reached nearly R$ 390 billion (approximately $70.5 billion), with more expected to be added in 2026.
Here is the detailed breakdown of the major items that have been conveniently excluded:
When Bolsonaro handed over the reins in January 2023, Brazil actually posted a primary fiscal surplus for 2022: about 1.3% of GDP, or roughly R$130 billion. That’s right—the central government ran a positive primary balance (revenues exceeding non-interest expenses) for the first time in years, rebounding from the massive 2020 deficit caused by pandemic aid.
This surplus was no accident. Bolsonaro’s Finance Minister Paulo Guedes pushed austerity measures, privatizations, and spending caps that helped stabilize the books post-COVID. Revenues surged from commodity booms (like high oil and soy prices), and tight controls on discretionary spending created breathing room. In 2021 and 2022 combined, Brazil achieved back-to-back surpluses, a rare feat that lowered the debt-to-GDP ratio slightly and gave markets some confidence.
– Precatórios (court-ordered debt payments) — R$ 92.4 billion paid in 2023 alone. These are mandatory judicial settlements, many inherited from previous administrations, but the current government chose to settle them outside the fiscal target instead of reforming the system to prevent endless ballooning.
– PEC da Transição— R$ 145 billion allocated at the very beginning of the term to expand social programs, especially the revamped Bolsa Família. While marketed as help for the poor, this massive injection bypassed fiscal limits, contributed to persistent inflation, and set the tone for the rest of the term: spend first, justify later.
– Rio Grande do Sul flood emergency relief — R$ 30 billion disbursed for reconstruction and aid after the catastrophic 2024 floods. No one disputes the need, but excluding the entire amount from fiscal accounting creates a dangerous precedent: any disaster becomes an automatic excuse to ignore budget rules.
– Brasil Soberano” export support package— R$ 30 billion in loans, subsidies, and tax breaks handed to companies hurt by 50% U.S. tariffs on Brazilian steel and aluminum. Of this, R$ 9.5 billion was explicitly kept off the books, turning a trade dispute into another opportunity for hidden corporate welfare.
This is not emergency governance. This is systematic evasion of fiscal responsibility, designed to buy short-term political popularity while postponing the inevitable reckoning—higher taxes, deeper cuts, or yet another inflationary spiral for ordinary citizens to endure.
The Jet-Set Presidency: 40+ Trips and Millions Wasted
While domestic problems pile up, Lula has spent more time abroad than almost any recent Brazilian president. Over forty international trips since January 2023, visiting dozens of countries on multiple continents. Lavish delegations, luxury accommodations, chartered aircraft, and massive security details accompany every journey.
Early estimates for the first year alone put lodging costs at over R$ 7 million. When you add flights, per diems, protocol expenses, and the cost of keeping the presidential apparatus running remotely, conservative calculations place the total bill for three years of globetrotting well above R$ 100 million—and likely much higher.
The official line is that these trips bring investments and strengthen Brazil’s global position. Yet the promised economic windfall remains mostly promises on paper, while inflation stays stubbornly high, unemployment refuses to fall meaningfully, and the average worker feels none of the supposed benefits. Meanwhile, the president is absent for weeks at a time, delaying urgent domestic decisions and fueling public frustration: polls have repeatedly shown most Brazilians want focus on Brazil first, not endless summits and photo opportunities.
Venezuela’s $1.74 Billion Debt: The Ultimate Insult
Yes, we can say that Lula’s approach has effectively resulted in a $1.74 billion gift (or more precisely, an unrecovered loss) of Brazilian taxpayer money to Nicolás Maduro’s regime, and the facts back it up with damning clarity.
This staggering amount—around R$10 billion at recent exchange rates—stems from loans and financing provided by Brazil’s National Development Bank (BNDES) during Lula’s earlier presidencies (2003–2010) and Dilma Rousseff’s term. The money funded major infrastructure projects in Venezuela, such as the expansion of the Caracas Metro, power plants, refineries, and other works often tied to politically connected Brazilian contractors. It was all part of a grand “South-South solidarity” vision, where ideological alignment with Hugo Chávez and later Maduro trumped sound financial judgment.
When Venezuela’s economy imploded—thanks to mismanagement, hyperinflation, collapsing oil production, and U.S. sanctions—the regime began defaulting on these payments starting around 2018. The unpaid installments, plus accrued interest, ballooned into the **$1.74 billion** figure cited in multiple reports as of early 2026 (some sources even peg it higher at around **$1.856 billion** by late 2025, including compensations already paid by Brazil’s Export Guarantee Fund).
Here’s why this looks like a straight-up gift under Lula’s watch:
– The debt is public money BNDES funds come from taxpayers and national resources. When Venezuela stopped paying, the Brazilian government (via the Export Guarantee Fund) stepped in to cover much of the losses for the contractors involved—meaning Brazilian citizens absorbed the hit.
– Lula’s reluctance to press hard: Since returning to power in 2023, Lula has prioritized diplomatic coziness with Maduro over aggressive recovery. He downplayed the 2024 Venezuelan election irregularities, called for lifting sanctions, and pursued “friendly” channels for repayment that have yielded zero results. Diplomatic efforts stalled, with Venezuela simply ignoring demands. This ideological loyalty—rooted in PT’s historical ties to Chavismo—has meant no real pressure, no international arbitration push, and no public shaming that might force concessions.
– The burden falls squarely on Brazilians: That $1.74 billion (plus interest) could have funded hospitals, schools, roads, or debt relief for struggling families in Brazil. Instead, it’s vanished into Maduro’s black hole, while Lula’s administration hides behind “inherited problems” and focuses on its own spending excesses.
Recent events only sharpen the outrage: With Maduro’s dramatic capture by U.S. forces in early January 2026, Venezuela’s massive $150–170 billion total external debt (including defaults since 2017) is now in the spotlight for potential restructuring. Bond prices have surged on hopes of recovery, and creditors worldwide are circling. Yet Brazil—thanks to years of soft-pedaling under Lula—risks being sidelined or getting pennies on the dollar, if anything at all.
In short: Yes, this is taxpayer money effectively gifted through inaction, poor foresight, and misplaced priorities. Lula’s first two terms helped create the debt; his third term has let it rot uncollected while preaching regional solidarity. Brazilian families paid for it twice—once when the loans were made, and again when they weren’t repaid. It’s not diplomacy; it’s a fiscal disgrace.
Three years into Lula’s third term, the evidence is overwhelming. Hundreds of billions hidden through accounting tricks. Tens of millions burned on questionable international travel. A colossal $1.74 billion debt from Venezuela treated as if it never existed. All while the Brazilian taxpayer—already squeezed by inflation, high interest rates, and stagnant wages—pays the price.
This is not leadership. This is abuse of public trust on an industrial scale. The Brazilian people deserve a government that respects every real they contribute, not one that treats the treasury as a tool for personal legacy, political alliances, and short-term populist wins.
