Scary Argentine Budget!

[Matt84]

It's like lending your brother-in-law money over and over to pay his mortgage for his luxury house when all he can do is mow grass for a living.

You seem to be confusing Argentina with Uruguay (which by the way can fare pretty well keeping the nicest golf courses in the continent)

Argentina not only grows stuff but also exports the technology to prevent crops from spoiling to developing countries from Venezuela to India and even to supposedly developed countries like Russia.

The problem or opportunity of Argentina is either the burden or ballast of 40 million people who wouldn't even know how to grow some perejil on a windowsill.

 

[EdRooney]

All of Clarin's doomsday coverage of economic issues makes total sense when we realize the expectations they are trying to create and what will happen if those expectations become reality.

This is an excellent point. It's like Lennon said: you look for the person who will benefit. In this case Clarín and Ámbito both have agendas, but slightly different ones, thus the different headlines.

For example, here Clarín uses a bigger number because the reaction they are trying to incite is: "OMG evil CFK is spending like mad!" (even though the evidence shows that Mme K is not nearly as Keynesian as she would like her minions to believe). If they used percentages or more economically sound figures, the gig would be up.

Meanwhile, Ámbito's readership is the financial industry, so they can't get away with Clarín's fuzzy math, but they fail to omit an interesting point that the more mass-marketed Clarín article astutely points out:

"...en octubre “los motores del gasto público fueron principalmente las partidas de gasto corriente. Entre ellas se destacó el crecimiento del gasto en personal (45,5%), gasto en seguridad social (37,6%) y las transferencias corrientes al sector privado (que incluye los subsidios económicos) que creció 59,3%. "​

So most of the spending is going toward more subsidies for the private sector. Ámbito is not as keen to point this out because they (read: their customers) love CFK's private sector subsidies.

Either way, the blaring lesson here is obvious: the press (be it TN, 678, La Nación, the New York Times...) needs to be read with a critical eye, instead of just swallowing their message whole as we so often do on this forum.

 

[Matt84]

It's like Lennon said: you look for the person who will benefit.

The wording used to be "Qui bono"

 

[Rich One]

I'm not sure I understand your point Rich...

Are you suggesting Argentina should have a much lower Debt/GDP ratio than its already below average rate in the hopes that the confidence fairy will come and spur foreign investment?

Eddie Rooney from your ideological optic please explain why Kenya and Ethiopia managed to subscribe debt for ·US$3 billion at lower interest rates then Argentina? the Confidence Fairy likes more Ethiopia and Kenya ??

http://www.infobae.com/2014/12/15/1615399-paises-africanos-colocaron-deuda-tasas-bajas-y-eclipsaron-la-emision-lanzada-kicillof
African Countries placed Debt at low Interest Rates and Eclipsed the Debt Placed by Kicillof

Two impoverished East African nations, Ethiopia and Kenya, overshadowed in the first week of December the low investor return of Argentina in the debt market. Ethiopia placed US $ 1,000 million, at a rate of 6.6% annually, while Kenya placed $ s750 million, at 5.89 percent. Both loans were extended for10 years.

 

[Joe]

This is an excellent point. It's like Lennon said: you look for the person who will benefit.

I am the walrus.

http://youtu.be/hdzuR4Iunuw

 

[EdRooney]

Rich my point is very simple:

The press is painting the deficit as a problem (it's not) in order to push certain policies (e.g. drastic spending cuts, aka austerity). Argentina has certain macroeconomic problems, but its debt/GDP ratio is not one of them.

You bring up Kenya and Ethiopia. Are you saying Argentina should change its economic policies to please foreign investors the way those two model economies have?

Furthermore you seem to be confusing the Confidence Fairy with confidence. Go back and read the article again.

 

[Dublin2BuenosAires]

Is this govt for or against debt/borrowing?

I can never work it out. Yen good, dollar bad?

Macri's borrowing is bad and he has to balance his defecit, govt borrowing is good and any call to reign it and the austerity bogeyman appears?

Ideological blindspots ahoy.

 

[sleslie23]

the austerity bogeyman

Now I know what next year's Halloween costume is going to be!

 

[Dublin2BuenosAires]

Now I know what next year's Halloween costume is going to be!

Either that or the "Fantasma de la B"

 

[EdRooney]

This government is, like all governments, bravely and boldly in favour of whatever suits its own selfish power at any given moment.

Thus, for example, when the IMF suggested Germany quit enforcing austerity on the rest of Europe, the pro-K press was fully on board with the anti-deficit crowd (against the evil IMF [boo hiss!]) Yet when it comes to their own policies, they paint themselves at their rallies as some sort of second coming of Keynes incarnate: which their low debt levels and pro-business subsidies show they are certainly not.


On the other hand though, there is a basic rule that you are over-simplifying, Magic O'Gonazalez: debt is a tool and it is not good or bad in and of itself. Debt can be good for the economy as a whole, when the exchequer has control over it. Conversely, issuing bonds in a currency that you don't control (eg Argentina's dollar-based bonds, or Greece's euro-bonds) is a recipe for financial disaster with which Argentines should be all too familiar (i.e., the current vulture fund issue).