Crisynomics At Work: Argentina Is Low Debt Superstar

[camberiu]

As much as this site's Neo-Liberals and Perma-Tourists love to complain about the mismanagement of the Argentine economy, this chart by the WSJ (the Neo-Liberal HQ) shows Argentina is better than EVERYONE else! MatiasBA - High-Five me!

It is quite an achievement indeed and Argentina must be congratulated for it. Years of strict budget controls, careful planning and responsible fiscal policies have finally paid off for Argentina.
Instead of defaulting on its debt, confiscating people's pensions, and printing money to compensate for not accessing the international credit markets, Argentina took the high road and today it is reaping the benefits adopting such a judicious economic policy. This is of course what is behind the extremely low inflation, the huge influx of foreign reserves, and massive investment from multinationals eager to inject money into Argentina.

 

[trennod]

Debt is low because no one will lend. If the USA for eg came running with an open cheque book of USDs can you imagine the kind if sh*t the Ks would be getting Argentina in to?

Joe have you been snorting the pizza lately?

 

[TrevorCito]

Less debt does not mean sound economic policies as is patently clear in the case of Argentina.

As others have said, Argentina has low debt because the government cannot be trusted to repay its debts.

A positive sign will be when Argentina get a loan, and I don't mean from loan sharks like China.

Really though, the Argentine people deserve what they have, after all, they don't have the balls to do anything about it other than walk down the street beating their pots and pans.

How about some peaceful civil disobedience? Here's an idea, don't pay afip and rentas for one month and watch how the government stands to attention.

 

[Joe]

You're a bunch a Nervous Nellies. Look, I know the government is guilty of gross economic mismanagement (just like Greece, Ireland, Japan, USA, Spain, Portugal...)

However the low debt level is a big positive. Ask Greece or Spain what life is like with high debt levels!

And look at it this way, would you rather be $100K in debt with a great credit score or debt free with a lousy credit score. I'd definitely choose the latter.

Yogur Griego at his day job

 

[camberiu]

However the low debt level is a big positive. Ask Greece or Spain what life is like with high debt levels!

If they had a balanced budget, I'd agree with you. But they don't. So the government is simply transforming what would have been debt into inflation. The outcome is equally nefarious. I am all for defaulting on debt that simply cannot be repaid, AS LONG AS sane fiscal policies follow. That is not the case of Argentina, so I see no "big win" here. The Argentina population is being shafted just like the Greeks or the Spaniards, just in a different way, that is all.

 

[ghost]

And look at it this way, would you rather be $100K in debt with a great credit score or debt free with a lousy credit score. I'd definitely choose the latter.

I prefer to be 100K$ in debt with 20$ million in net worth. Debt doesn't mean anything. It's a tool.

 

[Joe]

Debt doesn't mean anything. It's a tool.

I think there are a lot of Greeks (and Irish, Spaniards, Portuguese, Cypriots...) that would profoundly disagree with you on this point.

Amid Europe's Debt Crisis, A Sharp Rise In Suicides

http://www.npr.org/2012/04/21/151061607/amid-europes-debt-crisis-a-sharp-rise-in-suicides

 

[camberiu]

Praising Argentina for having low debt is like praising a starving Somali child for not being obese. Their status is not due to choice, but circumstances. if Argentina had access to markets, you can bet that the Ks would have Argentina in debt up to its eyeballs.

 

[esllou]

I think it's also helped that some years ago, Argentina told its creditors from pre-2001 that it was unilaterally cancelling 80% of the debt.

Imagine me phoning HSBC and telling them that I was cancelling 80% of my mortgage with them. Oh and then calling them back ten minutes later and saying "oh, wow, just realised my debts are really low now, can I borrow some more?"

we're down the rabbit hole.....

 

[Matiasba]

The neo liberal model that today leads economics says that taking debt must be the rule. Thats how we have the majority of countries with big debts. The trick is that once you have the debt they (the international bank) can totally manipulate you with interests, so there you have easy money. Its basically a rentistic financial model, based on especulation, and clearly managed for very few people. Basically, they say that taking debt is good. That was the speech we heard in the 90s, an economic model based in taking lot of debt "so that makes the country grows". So, as I said before, we have that the 2008 interests of debt we took in the 90s was the equivalent of the total budget for education for 1 year.
This government believes that taking debt is no good. I think the same. The enormous mass of money destinated for social plans that are attacking poverty is the money we used to pay interests. Fact. Period.