Slouching Towards Argentina

Peter Ferrara
The American Spectator

Argentina enjoyed the world’s fourth highest per capita GDP in 1929, on par with America at the time. But then the nation lost its way with a union dominated government taking control of the economy, and imposing wildly irresponsible taxes, spending, deficits and debt. After World War II, the hugely popular Juan Peron came to power in alliance with the unions, which effectively became part of the government. It has been all downhill for Argentina ever since.

The nation’s currency lost 70% of its value in 2 years, and inflation roared to 50% in 1951, amidst out of control spending, deficits and debt, which the nation’s monetary authorities accommodated through the “quantitative easing” of the time. The economy has never really recovered, as union dominated government only expanded and solidified control of the economy.

Further national debt was piled up in the 1970s for stimulus infrastructure projects and bailouts of private sector debts. The government in the early 1980s said unemployment was 5%, but private economists estimated it at 18%. Inflation rose to 10% to 20% per month. By 1989, it reached 200% per month, 5000% for the year. This effectively expropriated the savings of everyone in the country, from the rich to the middle class, as whatever anyone had managed to save was reduced to worthlessness. The inflation also cut real wages for working people almost in half. This is what happens when the voting public proves incapable of self-government…

…Is America now headed down this same road? Already, President Obama’s own 2012 budget documents show that more national debt will be added in one term under Obama than under all previous U.S. Presidents combined, from George Washington to George Bush. That national debt is already on track to soar past the all-time record as a percent of GDP set at the end of World War II, and past the level that triggered bankruptcy for Greece.
Those budget documents also show that this year the federal deficit will be $1.645 trillion, the highest in world history, without comparison…

Read the entire article at The American Spectator.

Comments are closed.