If You Had Your Druthers, How Do You Fix Argentina?

[camberiu]

One of the meanings of the inflation is PEOPLE WITH MONEY.

Money to the people.

Yep, that is exactly what it means.

Hear that? Is the sound of envy from all the people in Uruguay, Chile and Brazil. They are grinding their teeth with envy over the inflatio....I mean, over all the people with money here in Argentina.

 

[EdRooney]

I don't know if you can call a budget deficit equivalent to 6% of the GDP, "austerity". How big does the budget deficit needs to be before it is no longer considered "austere"?

I don't think theyre necessarily related. (often are, but not necessarily). Hypothetical situation: a rich country like the US could ostensibly reform its health care system and be running a surplus, and have adequate social spending to stimulate internal demand, providing a decent safety net. A better measure would be to look at how resources can be distributed most efficiently, and Argentina obviously has a long way to go there.

So yes, in my book cuts here in social spending would be austerity.

 

[camberiu]

A better measure would be to look at how resources can be distributed most efficiently, and Argentina obviously has a long way to go there.

I'd argue the same about most European countries.

 

[Matiasba]

Yep, that is exactly what it means.

Hear that? Is the sound of envy from all the people in Uruguay, Chile and Brazil. They are grinding their teeth with envy over the inflatio....I mean, over all the people with money here in Argentina.

you obviously didnt live here before the Ks, with a depressed economy, with not growth, with A LOT MORE OF POVERTY and of course, with no inflation.

 

[EdRooney]

I was just in Europe recently and they had on the news these teachers from the suburbs around Lisbon saying how their students weren't paying attention in class, and they weren't sure what the problem was until they realised it was because the kids were not eating at home because their parents were unemployed. Unemployment there is 16% and recent cutbacks have demolished food assistance programmes. And this is not even Greece where my relatives report they see people eating out of the garbage every day.

 

[Bajo_cero2]

What's so evil about cutting "wasteful" spending? Someone enlighten me.

And I never knew Cavallo "tried all that": He put the K's on trial for treason. Sent people blocking the roads to prison. Sent thieves to prison...didn't he have something to do with the economy?

You are confusing Gabriel Cavallo (the former federal judge) with Domingo Cavallo, an argentine economis with a master in Harvard who was the Minister of economy of Menem and De la Rúa. He was succesful on stoping hiper inflacion (1000% instead of the 25% nowadays we have) but his mesures produce a debt of 90 billion dollars (people wanted dollars and they took loans to give people what they wanted). When the Central Bank run off of dollars, the 2001 crisis hapends.
http://es.wikipedia....Domingo_Cavallo

 

[camberiu]

you obviously didnt live here before the Ks, with a depressed economy, with not growth, with A LOT MORE OF POVERTY and of course, with no inflation.

You obviously forget that I lived most of my youth under hyper-inflation. And the people had lots of money. It was not uncommon for me as a 11 year old kid to have 100 thousand Cruzeiros in my pocket. Do you know what I could buy with all that money? One piece of gum. Do you know what I could buy the following week? Not even that gum. It was awesome Matias. I felt really rich. Money to the people.

You obviously don't understand why there was no inflation, why convertibilidad could not possibly work, despite living with the consequences of a completely reckless monetary policy that had nothing to do with free markets.

 

[camberiu]

I was just in Europe recently and they had on the news these teachers from the suburbs around Lisbon saying how their students weren't paying attention in class, and they weren't sure what the problem was until they realised it was because the kids were not eating at home because their parents were unemployed. Unemployment there is 16% and recent cutbacks have demolished food assistance programmes. And this is not even Greece where my relatives report they see people eating out of the garbage every day.

And yet they are all running massive budget deficits. Seems to me more of a problem of allocation of funds, government priorities and corruption than an "austerity" issue. Greece, for example, devotes 2.5% of it GDP on military spending. No other European country spends this much on their military. Austerity? I don;t think so.

 

[Matiasba]

You obviously forget that I lived most of my youth under hyper-inflation. And the people had lots of money. It was not uncommon for me as a 11 year old kid to have 100 thousand Cruzeiros in my pocket. Do you know what I could buy with all that money? One piece of gum. Do you know what I could buy the following week? Not even that gum. It was awesome Matias. I felt really rich. Money to the people.

You obviously don't understand why there was no inflation, why convertibilidad could not possibly work, despite living with the consequences of a completely reckless monetary policy that had nothing to do with free markets.

I wasnt talking of hyperinflation, just of inflation. Every single moment of this country during the XXth century when it happend inclussion, great social stats, great gini, great unemployment numbers, almost no poverty, etc, was under inflation, and on the contrary, every moment when it ruled austerity, no social plans, ajustes, low retirement and pensions, and low inflation, those social numbers got wrong. It happened with the first peronismo, then with the stop and go cycles for 20 years, then the dictatorship and then with menemismo (being alfonsinismo and the hyperinflation a direct consequence of the dictatorship).

 

[Matiasba]

You are confusing Gabriel Cavallo (the former federal judge) with Domingo Cavallo, an argentine economis with a master in Harvard who was the Minister of economy of Menem and De la Rúa. He was succesful on stoping hiper inflacion (1000% instead of the 25% nowadays we have) but his mesures produce a debt of 90 billion dollars (people wanted dollars and they took loans to give people what they wanted). When the Central Bank run off of dollars, the 2001 crisis hapends.
http://es.wikipedia....Domingo_Cavallo

He also socialized, nationalized, statizated, the DOLLARS PRIVATE DEBTS that lots of argentine and foreign companies took, by force under the last dictatorship.