Argentina, like Greece, is also broke.. Unable to cut government spending, Argentine ministers repeatedly announced anti-inflation plans that consisted of currency devaluation and controls on prices, wages, foreign exchange, and interest rates. But government printing presses churned out bales of paper money, and inflation skyrocketed. By June 1985, it hit 3,000 percent. The old peso was abandoned, and Argentina adopted a new peso, but since government spending remained out of control, the new peso soon became worthless like the old peso. The new peso was replaced by the austral. Various economic controls caused endemic shortages. Capital flight accelerated amidst worsening economic crises. In the years since then, a succession of Argentine presidents have had some hopeful moments when market reforms were introduced, but invariably these collapsed because of lobbying from interest groups, especially labor unions. Programs once started became politically impossible to stop, regardless how harmful they proved to be. Politicians seem to promote government intervention in the economy because they imagine they will gain more control; but intervention causes increasingly serious economic problems that ironically lead to political problems and a loss of control. Comedian Enrique Pinto, who performed in Buenos Aires variety shows, ridiculed Argentinas humiliating descent from wealth to poverty. He said, It took real talent and perseverance to bring down such a wealthy country.
Posted on: Mon, 14 Jul 2014 04:17:15 +0000
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