Can't wait for the day when we get back to someone saying, "me hago cargo".
Is the Milei "Transformation" Failing Already?
- Thread starter Musicman
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I may be too old to see that day, either here or in the USA.
Bajo_cero2
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Well, he received a country with 25% inflation and gave it back with 50% plus over 59 billion usd in debt extra.
Gracias a dios que cada dia hay menos que piensa como usted.
retiredbanker
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I'm glad I'm not paying you by the hour as you still haven't replied to my original post
Don't want to be advocate of anyone, but I would still point out, that out of all mandates in last 20 years, Alberto had some excuses. Draught, covid and war/inflation in few years, one after another. Most countries in Europe had 3-4x inflation, it would hit Argentina no matter the policies. Christina and Macri had best economic environment outside, and nothing was achieved...
So even if Milei ideology isn't close to me, I have to acknowledge extremely bad situation he inherited. We will see if he can come up with something better, otherwise I just hope he won't make matters much worse. I will count that as success already.
You shouldn't even respond to him, because the situation was so extremely complex, that to try to sum it up with two numbers as he's trying to do, either because he's baiting us, or because he's so clueless that he really believes what he's saying, is disingenuous, and ridiculous.
Just to name a few things he doesn't say:
- Cristina left the Banco Central with no money (not as bad as Alberto, who left it with negative 10,000 million USD)
- Cristina left a deficit fiscal of almost 6% of GDP (PBI). That's 36,000 millions USD that Macri had to find to pay all the bills for his first year (not including money for debt payments), as well as for subsequent years if he didn't make cuts (ajuste) to reduce the deficit fiscal
- Cristina did not leave the country USD debt free. She left debts all over the place which added together came to quite a sum (I could dig out the numbers, but I won't, but, for example, there were billions owed to the "buitres" or "vultures" that she left it to Macri to settle with and pay; a multibillion debt to the Paris Club ("brilliantly" negotiated by Kicillof) which Argentina is still paying; a multibillion debt over the privatization of YPF (and we can now add another US16 billion, again certainly in large part thanks to Kicillof), and various other debts that had to be settled in international courts, and other money to pay to other holdouts.
- Cristina left an Andean sized mountain of peso denominated debt (which for some reason, nobody talked about as important until the last year or two)
- As with Alberto did, following in the kirchnerista tradition, Cristina left the prices of everything artificially low by threats or arm twisting or direct government control. My average electric bill from 2011 to 2015 was about 3 dollars. My gas bill was 1 to 2 dollars, even in winter, heating my house with gas. Unsurprisingly, I suffered at least 10 significant power outages in those 4 years, so many that the government ordered Edesur to give me free electricity for 18 month.
- But it wasn't just gas, electricity and water. It was food, healthcare, everything, just like this time. And just like with Milei (although not in such a bold manner), as Macri tried to put things in order, all these timebombs of repressed inflation exploded, leading to the higher inflation that any logical person could see was inevitable.
- Macri made the mistake of thinking he could fix things with what they called "gradualismo." That was a mistake. (Milei is not making that same mistake.) He spent too much money, so much so that he had to take a loan, and he took it from the only place that a country in Argentina's condition could take it, the IMF. He should have been much less ambitious and borrowed less and cut more, but he didn't. (Again, Milei seems like he will not repeat that mistake.)
- Macri did, however, in four years, get the deficit down from almost 6% of PBI down to 0.5% of PBI, an admirable achievement that Alberto rapidly reversed, and much more.
He used to try to rebut comments like this point by point. If he does so, get your popcorn ready, sit back and get ready to have some laughs.
*when I use the word billion, I use the US meaning. 1 billion = 1000 million
It's not the hand you're dealt, but how you play it. And Alberto couldn't have played it worse, straight down the line.
Just a couple things:
- Alberto had the year with the largest harvest and greatest income in Argentina's history
- Cristina (and Nestor) had the luck of nearly always having extremely high prices for soybeans; Macri did not have such luck
- If you don't think that Macri inherited an extremely bad situation, think again
- Macri also did not have the best economic environment insofar as he came in just as US rates had begun to rise, putting upward pressure on interest rates just as Argentina had to negotiate deals with various debtors
- Argentina is an extremely closed economy; can you show (not opine, but show) how a war in eastern Europe affected inflation here? Can you compare the change in inflation here with that of other South American countries because of the war in eastern Europe? I'm not saying you're wrong, but I am extremely doubtful that there is any significant connection. I read a lot about it at the time that suggested otherwise, but that was some time ago now and I couldn't tell you where I saw it. (I do try to real only reliable hegemonic sources, and I prefer ones with verifiable facts and figures
) - Another thing I question, and partly because of various articles I read back at that time that contained facts and figures, was that the only country in the region whose inflation soared during Covid was Argentina. Inflation in the rest of the region remained relatively normal. If you can show me something different, I'd be happy to look at it.
- There was one terrible year because of the drought. It caused an enormous shortfall for the farmers, and so also for the government. If I remember correctly, it was to the tune of around 10,000 millions, but I could be remembering incorrectly. In any case, it was a huge number. Massa was in charge during this time, and one would expect that the response to such a shortfall would be extreme belt tightening. But this is Argentina, and this was Argentina during an election year, so what could we expect but the extreme opposite, printing and spending money like there was no tomorrow, which in his case, turned out to be true. Such unrestrained spending in an already fragile, high inflation environment could only lead to extremely serious consequences, which, unsurprisingly it did, consequences that will probably be with us for quite some time.
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