Posted on 12/17/2009 11:00:57 AM PST by Zakeet
In the early 20th century, Argentina was one of the richest countries in the world. While Great Britain's maritime power and its far-flung empire had propelled it to a dominant position among the world's industrialized nations, only the United States challenged Argentina for the position of the world's second-most powerful economy.
It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system. Its level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.
In 1916, a new president was elected. Hipólito Irigoyen had formed a party called The Radicals under the banner of "fundamental change" with an appeal to the middle class.
Among Irigoyen's changes: mandatory pension insurance, mandatory health insurance, and support for low-income housing construction to stimulate the economy. Put simply, the state assumed economic control of a vast swath of the country's operations and began assessing new payroll taxes to fund its efforts.
With an increasing flow of funds into these entitlement programs, the government's payouts soon became overly generous. Before long its outlays surpassed the value of the taxpayers' contributions. Put simply, it quickly became under-funded, much like the United States' Social Security and Medicare programs.
The death knell for the Argentine economy, however, came with the election of Juan Perón. Perón had a fascist and corporatist upbringing; he and his charismatic wife aimed their populist rhetoric at the nation's rich.
This targeted group "swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated."
Under Perón, the size of government bureaucracies exploded through massive programs of social spending and by encouraging the growth of labor unions.
High taxes and economic mismanagement took their inevitable toll even after Perón had been driven from office. But his populist rhetoric and "contempt for economic realities" lived on. Argentina's federal government continued to spend far beyond its means.
Hyperinflation exploded in 1989, the final stage of a process characterized by "industrial protectionism, redistribution of income based on increased wages, and growing state intervention in the economy..."
The Argentinian government's practice of printing money to pay off its public debts had crushed the economy. Inflation hit 3000%, reminiscent of the Weimar Republic. Food riots were rampant; stores were looted; the country descended into chaos.
And by 1994, Argentina's public pensions -- the equivalent of Social Security -- had imploded. The payroll tax had increased from 5% to 26%, but it wasn't enough. In addition, Argentina had implemented a value-added tax (VAT), new income taxes, a personal tax on wealth, and additional revenues based upon the sale of public enterprises. These crushed the private sector, further damaging the economy.
A government-controlled "privatization" effort to rescue seniors' pensions was attempted. But, by 2001, those funds had also been raided by the government, the monies replaced by Argentina's defaulted government bonds.
By 2002, "...government fiscal irresponsibility... induced a national economic crisis as severe as America's Great Depression."
In 1902 Argentina was one of the world's richest countries. Little more than a hundred years later, it is poverty-stricken, struggling to meet its debt obligations amidst a drought.
We've seen this movie before. The Democrats' populist plans can't possibly work, because government bankrupts everything it touches. History teaches us that ObamaCare and unfunded entitlement programs will be utter, complete disasters.
Today's Democrats are guilty of more than stupidity; they are enslaving future generations to poverty and misery. And they will be long gone when it all implodes. They will be as cold and dead as Juan Perón when the piper must ultimately be paid.
Coming soon to a country near you
Wow. I knew some of this, but not all of this. Thanks!
Thank you.
This is a homeschool lesson for today.
having driven across some of argentina, I can say that a person from the US (esp. agricultural areas) may find themselves simply dumbfounded when they ask themselves how Arg. can NOT be a major economy.
The answer, of course, is a good illustration of how catastrophic an impact negative government policies can have.
Argentina has never recovered it’s status as a first rate country. Obama wants to achieve 3rd world status for us too. The parallels are striking.
Obama still needs our love after all that he’s done. /sarc
Conservatives did what conservatives do. They took care of themselves. That includes educating their kids. The problem is, public schools, which began to decline were left to socialists. So, the majority of kids in the last 2 generations, have been taught the virtues of socialism, and the inheirent evils of capitalism.
Our kids may be better educated, but they still have to live in a socialist crap hole of a country.
The USA will be “Argentina with nukes,” and much worse social problems.
http://ferfal.blogspot.com/
This guy wrote a great book too. It's an eye opener on what going from 1st world to 3rd world over night feels like, and how to survive the next morning.
Good post. Kudos.
I watched a youtube video about Argentina in hyperinflation mode, and I was shocked and amazed at the violent comments posted after the video.
Without restating what is so vile and disgusting, I will summarize by saying that there were folks who were planning, if something like that happened in America, to execute violence and mahem of the torture-porn variety on neighbors they were eying right now. Now, maybe that's just a few unhinged weirdos, but folks have been taking in a steady diet of violence via movies and video games. The rule of law keeps them leashed.
I'm just hoping that the general degradation in manners and care for one's neighbor is not a sign of greater ungliness lurking within our culture. I don't want to test that hypothesis, ever.
I understand Chile is doing quite well these days. Their government must be doing something right.
In my early college career, I took a couple of classes in criminal psychology.
Most people, unless they've seen "Silence of the Lambs" or something similar, have no idea what sort of monsters walk our streets. And since this was long before that sort of cinema, it was news to me.
It defies a healthy imagination's ability to conceive, and makes a normal person physically sick when they are faced with the reality of how these things in human skin derive pleasure from suffering and death.
And as this culture disintigrates from the top down, these inhuman predators will increasingly roam freely and unfettered to maim and kill and torture.
The only "good" news is that the people who will hunt them will be equally unchained.
Peron was out of office in 1955 and then we jump to 1989 in this “history” lesson. what happened in between? who was in charge? were there peaceful transitions of power or coups to change leaders? the answers must contain information that the author doesn’t want to discuss because it probably conflicts with the narrative he’s trying to create. I’d advise doing a little independent research before taking this at face value?
I’m not going to bother to read that idiots web page if he can’t be bothered to choose a color scheme that is readable. Dark blue text on a dark brown paisley background? It’s madness. It looks like an eye exam color blindness test. Don’t people ever look at their own web pages?
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