Argentina - "Don't Cry for Me"

It's incredible the parrallel that exists between the current state of the U.S.A. and the history of Argentina.

Argentina was once one of the richest nations on earth. Just like the U.S.A., Argentina was blessed with abundant agriculture, 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. It only rivaled the U.S.A., and the biggest, Great Britain, for being the top world economy.

It had everything. ...in the early 20th century.

Then came government controls. The election of president Ipolito Irogyen, though well-meaning, sought to preserve 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." (Vicar, slide 5).


With a huge influx of funds to entitlement programs, the governments payouts to retirees etc. soon became overly generous and it soon surpassed the taxpayer's contributions. (Simarly, the United States' Social Security and Medicaid programs are projected to experience this same fate)

Then came Juan Perón. He seized power and brought a semi-capitalist (but fascist) centered government. His famous wife, Evita, and he set about taxing the rich.


Ultimately this became not just the rich, but the middle class, and on. The agriculture and working class began to diminish.   "High taxes and economic mismanagement took their inevitable toll even after Perón had been driven from office. However, his populist rhetoric and “contempt for economic realities” lived on. Argentina’s federal government continued to spend far beyond its means. ..." (Vicar, slide 11)   The military rose to power in the government. The so called "dirty war" imprisoned or murdered young people suspected of conspiracy against the government. Thousands vanished -for no reason.

In 1989, the inflation got so bad that the economy fell apart. Massive rioting ensued, banks closed, crisis hit.
The stage was set for the following: “industrial protectionism, redistribution of income based on increased wages, and growing state intervention in the economy.” (ditto, 12)

The government printed more money to try to pay off public debts. Inflation soared to 3000% ! Argentina's public pension system imploded. The new system of taxes damaged the private sector and further damaged the economy. The government attempted to privatize, but by 2001 the funds had vanished. Raided by government kickbacks and pensions. The government bonds issued went into default.
By 2002, the government was so decimated by government fiscal irresponsibility that it entered a crisis more severe than the U.S.A.'s Great Depression of the 1930's.


-tie in Clinton's rhetoric in the 90's: health care; and Obamacare; Social Security; pensions ...Geoge Bush, Reagan