Crisynomics At Work: Argentina Is Low Debt Superstar

[Joe]

The Argentine political establishment has made the "neo-liberal" into a boogeyman. So that anyone opposing the establishment policies can quickly be dismissed - "Oh, don't pay attention to him, he's a Neo-Liberal". They have been so successful in this subterfuge that when I took a poll of members who were Neo-Liberal, absolutely no one was willing to be identified as such.

They also made him into a straw-man. Neo-liberalism is Menem which means all those opposing the current political establishment are in favor of dolling out public money to their rich crony friends. And they are also in favor of destructive policies like fixed exchange rates (an inherently NON Neo-Liberal policy) or taking on large amounts of debt (also an inherently NON Neo-Liberal policy).

The Argentine political establishment's version of "Neo-Liberal" is unique. And it is unique because it is a pure construction of a straw man to thwart any attempt to direct the country to policies that have worked elsewhere - even in neighboring countries - like Chile.

This subterfuge has been so successful, it has condemned Argentina to follow in the footsteps of Venezuela and Cuba instead of countries like Chile, Columbia and Peru. These later countries are deemed to have recently pursued Neo-liberal policies, which despite their recent record of economic improvement, are quickly dismissed simply for being Neo-Liberal.

 

[Matiasba]

So, your example of neo-liberal economist that says that government debt is good is Domingo Cavallo? That is it? That is the best you can come up with? So Domingo Cavallo is now the 'brains behind" neo-liberalism worldwide? So, you are basing all your understanding of the theories behind liberalism worldwide on the actions of a Mr. nobody when he was responsible for the economics of a highly dysfunctional, schizophrenic and insignificant little crappy country in South America that no ones gives 2 shits about? That is your reference of what neo-liberalism is? Sorry, but I can't help myself.

no I just out the first neoliberal economist that came to my mind, that what a coincidence, was part of two neoliberalism governemnts tis country had.

So you tell me

reforma financiera that liberated the interest rate is neoliberal?
apertura economica is it neoliberal?
privatizations are them neoliberal?
reforma del estado, is it neoliberal?
economic stability without inflation is it neoliberal?
elimination of almost every form of protectionism is this neo liberal?

Please answer these questions, enlight me.


edit: you didnt answered if you consider Chile neoliberal. If you do so, why these two countries are, from a social point of view -dont forrget that economics are a social science-, are almost in the same level?
that too is a little crappy country, at least for arrogant-big cock country brazilians

 

[camberiu]

So you tell me

reforma financiera that liberated the interest rate is neoliberal?
apertura economica is it neoliberal?
privatizations are them neoliberal?
reforma del estado, is it neoliberal?
economic stability without inflation is it neoliberal?
elimination of almost every form of protectionism is this neo liberal?

Please answer these questions, enlight me.

Matias, how old are you? Is UBA drainig your intellect? What you are saying is like this:

A dog is a mammal
My mother is a mammal
Therefore my mother is a dog.

That is one of the most basic logical fallacies there are. Let me ask you a similar question in different format and you tell me if you can catch what is wrong with your logic.

Is the belief in one God Christian?
Is the belief on an immortal soul Christian?
Is the belief in the concept of sin Christian?
Is the belief in heaven and hell Christian?
Is the belief in the sanctity of matrimony Christian?

Then if you believe in all of the above, you MUST be Christian, right?
Do you see any problem at all with that logic? Can you think of any religious group where all of the above might be true and yet they are not even close to being Christians?

 

[camberiu]

edit: you didnt answered if you consider Chile neoliberal. If you do so, why these two countries are, from a social point of view -dont forrget that economics are a social science-, are almost in the same level?
that too is a little crappy country, at least for arrogant-big cock country brazilians

No, it is not. It is certainly a lot more liberal than Argentina, and they are benefiting greatly from it, but it is still a managed economy, just at much lesser degree than Argentina. Also, don't be so offended about Argentina being a crappy little country. I find Brazil to be a crappy big country, so we are even.

 

[Matiasba]

Matias, how old are you? Is UBA drainig your intellect? What you are saying is like this:

A dog is a mammal
My mother is a mammal
Therefore my mother is a dog.

That is one of the most basic logical fallacies there are. Let me ask you a similar question in different format and you tell me if you can catch what is wrong with your logic.

Is the belief in one God Christian?
Is the belief on an immortal soul Christian?
Is the belief in the concept of sin Christian?
Is the belief in heaven and hell Christian?
Is the belief in the sanctity of matrimony Christian?

Then if you believe in all of the above, you MUST be Christian, right?
Do you see any problem at all with that logic? Can you think of any religious group where all of the above might be true and yet they are not even close to being Christians?

Look, I just mentioned some measures neoliberals governments took here and ask you in a well mannered way if you considered it neoliberals, since you dont consider neoliberal what I do. You ask me to mention a neoliberal economist "AT LEAST ONE" and when I did it you made fun of me.
I thought discussing with you could enrich me in some way. But looking how you (dont) respond and make fun of me or my ideas, or my way of thinking with a not well educated or respectful way make me think this it does not going to take me anywhere, and its a bad idea to keep talking to you.
As its common with people who has no arguments you make fun or pay attention in the forms but not in the content, you guide this exchange of opinions with a totally prejudice of UBA or whatever you think is opposite to your ideas.
I suggest you to calm down and take these conversations like a way to exchange opinions just to enrich your wisdom. Really, enjoy it a little more.
I feel sorry for you.

 

[TrevorCito]

Matisba, there is high debt and low debt. High levels are bad for any country, like 150% of GDP and very few counties have that but for you to say that debt its bad is like saying you shouldn't have a credit card or take a loan which is rubbish.

I want to correct another thing you said too that the international bank can manipulate you with interest rates.... Not correct. Billion dollar loans to Argentina have always been fixed interest and mainly through bonds so there had never been a way to use interest to manipulate Argentina.

A country taking on debt is no different to a person talking on debt, just that the numbers are bigger. I can be responsible and take on manageable debt, I can borrow too much, I can default, it's my choice. If I default, the banks wont trust me again for a long time.

Taking on manageable debt is good for so many reasons but I also think it's a good thing that nobody will lend to Argentina. Imagine the shit this country would be in if it still had access to international debt?

 

[Joe]

Typical exchange:

Expat: The K admin has a new policy that is going to put even more pressure on the peso.
K-supporter: These policies help the poor. You Neo-Liberals are only interested in helping the rich.
Expat: The inflation rate is going through the roof because of these crazy policies.
K-supporter: The inflation rate is overstated by the Neo-Liberal press.
Expat: All I know is that things cost more. And there are all these restrictions.
K-supporter: Neo-Liberals are always complaining and now they are resorting to black market activities. You're a Neo-Liberal and you are bad.
Expat: Stop call me that. I'm not even sure what it is. But why don't you adopt some of the growth policies that have worked in neighboring countries.
k-supporter: Those policies are Neo-Liberal and Neo-Liberal policies DON'T work in Argentina.

 

[Dublin2BuenosAires]

Neo liberal. The godwin of political debate in Argentina.

It's like listening to Fox News fans shouting 'socialist' in the US. In their hands these terms becomes redundant, all that's left is some lunatic with foam coming out of their mouth and an inability to be objective.

 

[ajoknoblauch]

Matisba, there is high debt and low debt. High levels are bad for any country, like 150% of GDP and very few counties have that but for you to say that debt its bad is like saying you shouldn't have a credit card or take a loan which is rubbish.

I want to correct another thing you said too that the international bank can manipulate you with interest rates.... Not correct. Billion dollar loans to Argentina have always been fixed interest and mainly through bonds so there had never been a way to use interest to manipulate Argentina.

A country taking on debt is no different to a person talking on debt, just that the numbers are bigger. I can be responsible and take on manageable debt, I can borrow too much, I can default, it's my choice. If I default, the banks wont trust me again for a long time.

Taking on manageable debt is good for so many reasons but I also think it's a good thing that nobody will lend to Argentina. Imagine the shit this country would be in if it still had access to international debt?

Keynes showed that a country taking on debt is different from an individual. Countries can repeatedly finance their activities on debt, but they have to recognize that they're doing so in a counter-cyclical manner. That can be done by easing the money supply, as the US Fed is doing now (though a larger public stimulus policy would have been better), but they need to recognize the limits of such policies (which Argentina's government refuses to do, resulting in uncontrollable inflation and other undesirable outcomes).

 

[AmigoArtistico]

Thanks for coming up with this, it is a pretty one.

So, Argentina is better than
- Singapore
- Korea
- Sweden
- Canada
- Switzerland
- Norway
- Hong Kong
- Germany

One thing these countries have in common is that they can raise debts very cheaply.... Even Repsol managed to raise debt at less than 3% recently.

Argentina equally outstanding fellow countries in the same area of the chart are
- Nigeria
- Belarus
- Indonesia
- Russia

One thing these countries have in common is that they do not belong to the first group. (OK, I may be cherry picking, a little)

From: http://blogs.ft.com/beyond-brics/2013/05/03/argentine-bonds-anyone-impsa-wants-investors-to-dig-in/#ixzz2UQUNMB1s

Argentine issuers haven’t sold debt internationally since May when borrowing costs surged to a two-year high following the government’s seizure of oil producer YPF SA from Spain’s Repsol SA. Empresa Distribuidora de Electricidad de Salta SA, a regional power company, was the last Argentine company to issue dollar debt when it sold $63 million of five-year bonds at 14.34 percent in May.