Don't Cry For Growth --- Argentina

[splaying]

Take a look at this video -- Don't Cry for Growth - Argentina -- in today's Financial Times Newspaper by going to www.ft.com -- videos are on the rights side of the page -- scroll down to them. John Authers has written for the Times for many years. Here is an interview with him and the Chief Economist for HSBC Bank, Stephen King. He is the author of the new book titled: When the Money Runs Out --- I think you will find it to be interesting. I would like to hear your comments. walter

 

[camberiu]

I think he could have talked more about the parallels between the populist policies implemented by Peron in the 1940s and the similar policies implemented in the developed world.

I think that the main point that he is trying to drive is that when governments engage into a lot of spending, eventually "the money runs out", be it in Argentina, Japan, Europe or Japan.

Of course the Keynesians disagree with that assessment, but I don't think you are looking for a debate on keynesianism vs. orthodox economics on this topic.

"[background=rgb(240, 240, 240)]You must save to invest, don’t use the printing press[/background]
[background=rgb(240, 240, 240)]Or a bust will surely follow, an economy depressed"[/background]
--Fear the Boom and Bust

 

[ajoknoblauch]

In the early years of Kirchnerism, stimulus was the right decision, by default. The problem is their conviction that it's a long-term option, rather than an occasional counter-cyclical necessity. They also were fortunate that, at the time they took over, there was nowhere to go but up.

 

[robwerwe]

So a lot of developed countries are in debt due to bailing out the banks, now some guy from a bank is calling for a cut in social spending.
Go figure.

 

[camberiu]

So a lot of developed countries are in debt due to bailing out the banks, now some guy from a bank is calling for a cut in social spending.
Go figure.

Bailing out banks is a component of their debt, but I'd argue that is not even close of being the main component of that debt. Not defending bank bail outs at all, but those are not the root cause of the overwhelming debt.

 

[robwerwe]

For all those who say that bailing out the banks hasn't got that much to do with our total debt. *UK

2007, debt 40% of GDP

2008 - bank bail out

2012 debt almost 90% of GDP

 

[Joe]

A lot of what Big Government has done recently in the developed world is transfer money from the poor and especially the middle class to the wealthiest.

First through bank bailouts and now through QE (QE has pumped up the stock market whilst doing squat for wages)

I'm not a fan of Big Government or the welfare state. But these transfers to the rich are truely obscene.

 

[camberiu]

First: I certainly did not say that the bail outs "[background=rgb(252, 252, 252)]hasn't got that much to do" with the debt. I said specifically that it was not the main component of it. Which really isn't. Take the UK, which is one of the most extreme examples: Total debt is 1.4 trillion pounds. Of this, about 500 billion pounds is due to the bail out. So 2/3 of that debt did not come from the bail outs. [/background]

[background=rgb(252, 252, 252)]Second: The UK is one of the more extreme examples in Europe. Take Belgium, for example. In 2007 their debt was already 84% of the GDP. France was already at 68% in 2007. Italy was at a whooping 104% of debt to GDP ratio in 2007. Greece was at 107%. And this before the financial meltdown and the bank bailouts.[/background][background=rgb(252, 252, 252)]Again, I am not defending the bail out. I think the banks should have failed and the bankers should have lost their socks. That being said, the debt problem in the developed nations comes from before the bail outs and the 2008 financial crisis. [/background]