AndyD said:
Not much of an understanding of other people's ideas here. It's more comfortable to believe that they're simply tax evaders who dislike democracy, right?
Well, everybody evades, that´s a fact. So, you are right here. They are not criminals, just average Argentine who doesn´t want to accept the pragmatism of the government and prefer to expend over the budget even if it means that in 2 years it will produce a huge crisis again.
And that´s why there weren´t a rain of claims at Court like it happens with the corralito in 2001.
AndyD said:
Every default is followed by deleveraging. This is forced on the defaulter, not a chosen policy.
Well, the blogger you posted propose that innovative idea for debate not as a fact. It is not accepted as a fact. However, I disagree with the "blogger".
Look how does it normally works:
Spain has a huge crisis and takes debt. Every time, it is more expensive. At some point, they need to take credit just to pay the interest, not the debt. And then, the creditor put conditions: fire 1000 public employed, rise takes, privatize public companies, cut 20% the budget in health care, education, etc. So, there are always possibilities about to continue taking loans some time after the default. Argentina did for over 30 years.
I used Spain as an example. But it worked out in the same way with the FMI.
So, any other politician would look for more credit. So, the K were pragmatic? Yes, they did what they have to do. You have no idea how difficult is to have politicians like that. We didn t have them since the 19 century.
AndyD said:
Actually, government deleveraging in Argentina wasn't as strong as it would be expected, if we compare with other defaulting countries and consider our booming export possibilities.
Well, here we agree partially. It was a political decision deleveraging with growth, "social inclusion" and investment in education and science instead of deleveraging with recession just like it is happending in Greece and Spain now a days.
AndyD said:
This was despite several deliberate policies that worked for deleveraging, like nationalization of pension funds and depletion of energy and transport infrastructure. We are now accumulating a debt with future retirees and a need to recover fuel reserves, efficient surplus sources of energy and transport infrastructure, this debt not being accounted for in typical debt/GDP statistics.
Here we disagree.
Let´s see how does it work in reality. Pension funds suppose to invest the money of its clients to make it more profitable than public funds. What did they do? The borrow money to the State. So, instead of having a free way to finance they started to pay for that. And if the company frauds of go into bankruptcy, the State has to take responsibility. Sorry, sounds like a fraud.
So, now the State have the same funds for free instead of paying a high cost.
Regarding the energy, well, Repsol policy was to do not develop or invest in order to import because it was more profitable. So, who was depleting the energy resources?
If you can produce energy instead of importing it, then the imports/exports balance works better.
So, that´s why I disagree.
AndyD said:
Besides the accounting issue, that different kind of debt gets people hurt on trains, if not dead, makes us pay too much for energy and transport (if we include subsidies and factor in the negative investment), and creates concerns on future industrial investment, among other disadvantages.
Well, paying too much?
The subway ticket in NYC is 2 dollars. here 0.5.
Electricity: I pay 50 pesos. I used to pay 150 dollars in NYC.
Gas: Well, Repsol was charging like it was an imported good.
AndyD said:
People I know used GDP-growth stats, poverty ratios (linked to inflation stats) and inequality indexes (linked to home-income polls, which exhibit similar oddities since Moreno took control of INDEC) in their voting decisions. This issue goes further than lying about inflation, it is affecting the quality of our democracy.
Well, what are you trying to argue? That Argentina didn´t grew?
No comments.
Regarding democracy, well, it is in crisis every where. Nobody has white shoes.
AndyD said:
Countries pay their debts without these kinds of controls.
Please, less dogmas and more facts. Who do it?
The US has a huuuuuuge debt and it is not paying it. It is rising.
AndyD said:
The dollar corralito was an alternative to simply letting the price of the dollar rise some more, as that would have demanded controlling inflation by other means.
Simplifications some time sucks.
AndyD said:
The government didn't want to give up on easy loans from the Central Bank, and counts on the devaluation of the outstanding (peso) debt being already held by the Bank, this debt being one of the reasons for the markets expecting a somewhat higher dollar (not as high as the blue rate but, perhaps, e.g., $5.50/dollar). Instead of constraining itself a little, the government preferred these unorthodox controls, which mean that peso holders will pay for those expenses, besides other consequences such as decreasing investment, higher risk in everyday economic processes, lower activity in markets that use the dollar, time lost in unproductive chores, plummeting confidence on the peso for years to come, difficulties for workers who are not under a strong union, subsidies for imports when they are not closed or complicated at government will (which fuels corruption), etc. Peso holders who protest want to be able to save, and workers with peso-denominated salaries who lack bargaining power want their salaries to keep their value. Calling them tax evaders and anti-democratic is insulting.
I read many times this sentences but I still can´t find any sense.
AndyD said:
You seem to believe that those loans are gifts to the banks, or that Spaniards would prefer their banks to just fall.
Touché!
Those bank should fall and then the economy can heal. Why should you reward inefficiency?
It is money for free because it is taken as public debt.
AndyD said:
Unlike inflation, that capital flow has to be returned. But inflation is like a forceful gift, or an underground and uneven tax if you wish, collected by the Central Bank (who turns in that gift to the government) and by other debtors in pesos (which include private banks and the state).
It is the same, but with inflation is the State who get free financing while when you give this money to the banks, they just pay extra bonus like they did with Obama´s money. Remember?
Banks are going to fall any way and the facts shows that that money is not going to come back. And the State is going to pay for a debt that looks like a huge fraud.
Here I think, with all my respect, that you are naive.
AndyD said:
These invented narratives are frequent in official discourses and pro-government media, and there is a campaign to discredit opposition media, where these things can be denounced.
Well, after a history of 50 years of living what Spain and Greece are dealing with right now, perhaps Argentinians have a sharper point of view about how does it works.
There is a simple rule: if you play that game you loose always and the economy get destroyed, no matter what the dogmas says, it is a fact. Wait and see how Spain rise with those dogmas...
