Bajo_cero2 said:
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.
A bit closer but still far from understanding. Most critiques to this government have nothing to do with overspending.
Well, the blogger you posted propose that innovative idea for debate not as a fact. It is not accepted as a fact.
There's nothing "innovative" in that statement. The blogger pretty much supports it throughout the article, particularly when he answers the "debate" question with "endeudarse era simplemente demasiado caro, por no decir imposible". The position is supported by commentators below.
Spain has a huge crisis and takes debt. ... So, any other politician would look for more credit.
I'm not sure that you read the article properly, where they explain that Argentina had no other choice in practical terms. The same happened with other defaulters in the past. You present nowadays Spain as a counterexample of a defaulting state that takes more credit, but Spain hasn't defaulted. Of course I didn't mean that they have zero possibility, but trying to place debt in the aftermath of a default is expensive and risky, so it's done exceptionally and in small amounts. It's not in the basket of reasonable policies.
If you mean that this government hasn't done enough to solve the default and be able to re-enter the markets, I concur with that, but I don't see any positive side to it. If the default was solved, we could make use of cheap credit available these days. E.g., for YPF, electricity and trains.
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.
In Spain and Greece, the private sector is deleveraging, not the state (you wrote one paragraph before that Spain was increasingly indebted). I wonder what you mean by it being a political decision.
Regarding spending in Argentina, it most probably spurred growth in the past few years, but at the cost of future growth. If immediate results were all that mattered, economics would be easy.
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.
The interest that the state pays for those loans makes an important portion of future income of the workers. That income will still be demanded by the workers with the current public system. The difference is not that the state has to pay more with a private system, except for the administration fees (which can be within reasonable low levels), but that it has to take some more responsibility for its expenditures, instead of passing the burden to a future government so easily. It is also a way to distribute power, thus preventing corruption, and to strengthen a financial system. The pension funds can't commit fraud a-la Madoff because there are controls on their portfolios. If they go bankrupt (any did?), the assets are still there for their clients to move to another manager.
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?
It was more profitable because prices fixed by the government were absurdly low. It was a government policy to exploit reserves cheaply, so that the population had cheap fuel and could spend more on other things that had an immediate impact. The unsurprising consequence is that oil companies did not replace depleted reserves. Now we will need to make an effort to build up those "savings", paying expensive imports in the meantime, if not high interest for public oil projects. My point was that, although the K governments didn't place more debt (because it was too expensive and risky), they "indebted" us in these other ways.
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.
I'd say to factor in subsidies and negative investment, meaning to look at the cost were spending through tariffs payed by customers, plus subsidies payed by the state, plus future investments payed by future customers and administrations. Most of the generation capacity that was added to the electricity network this decade is inefficient. Due to the problem explained above, it is increasingly being fed with expensive, low-quality imported fuel. We're using trucks to transport merchandise that could be moved, more efficiently, by train. Frequent problems in subways and trains make us lose time, sometimes getting people hurt, if not dead. Etc.
Well, what are you trying to argue? That Argentina didn´t grew?
No comments.
Did I say that? The person I was thinking of was comparing GDP growth in different countries, to evaluate if current policy was adding to or subtracting from the opportunity that the world is offering Argentina, which is impressive. So, GDP numbers made a difference to his argument, which was important for his voting decision, and I think others shared his views.
Regarding democracy, well, it is in crisis every where. Nobody has white shoes.
In France, the Netherlands, Germany, Japan, Australia, Canada, etc., people are not lied to as they are here, among other attempts against practical democracy. The democracy in the developed world and much of the emerging world is not in crisis.
Please, less dogmas and more facts. Who do it?
The US has a huuuuuuge debt and it is not paying it. It is rising.
Funny to read that I'm offering "dogmas" after all the government kool aid in your messages. Anyway... To answer to your question, if we mean paying for their dues, they're practically all doing it. If we mean decreasing debt, some are doing it now and most did in the past. Doing it now: Uruguay, Brazil, Colombia, Belgium, Sweden, Croatia, Thailand, Turkey, Philippines, etc., etc.
I read many times this sentences but I still can´t find any sense.
If you can't find any sense, it must be that it doesn't make sense, right?
Touché!
Those bank should fall and then the economy can heal. Why should you reward inefficiency?
And, all of a sudden, you're a libertarian.
It is money for free because it is taken as public debt.
I may shock you with this other innovative idea: Are you considering that a bank may owe the government, and later pay back? Perhaps through a Central Bank... I mean, it has happened before, or so I heard.
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?
Free financing sounds cool, it's good that we Argentinians were the first to think of this. The rest of the world is so stubbornly against inflation... But you still seem to think that bailout money is a gift.
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.
You may be right. To recap, the whole European banking system is a fraud and I am not seeing, as well as zillions of knowledgeable people who lack your insights, that it is a fact that it will collapse completely? Thanks for the tip.
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.
I was talking about misrepresenting a hard fact when CFK sayd that German banks are placing debt at zero interest to buy Spanish bonds, when they're actually yielding almost 5% and selling those other bonds. "Having a sharper point of view" means welcoming being lied in the face?
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...
OK, sorry to bother with my dogmas. Have fun.
