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Montevideo, June 19th 2019 - 07:50 UTC
Argentina’s industrial output plunged 8.1% in June compared with the same month last year, government statistics agency Indec said, the sharpest monthly drop since the country was in the grips of an economic meltdown in 2002. Read full article
For those who wonder how Argentina's past economic meltdowns came to be, here's the next one developing under their eyes.
The downward cycle started the same day Mauricio Macri and his pals landed in office in late 2015 and has been rapidly destroying the incipient productive structure left by the previous government. It contains very similar elements to the economic measures applied by the civic-military dictatorship of the 1970s, as well as by the elected governments of Carlos Menem and Fernando de la Rua in the 1990s.
This should have been expected of Macri and his team of CEOs, who have been busy finding business opportunities for themselves, their family and friends in a party of big financial gains to be paid by future generations of Argentines.
And, as in previous occasions, a president who auctions the country to the next bidder becomes the darling of international financial circles who keep singing the praises of Argentina’s “business-friendly” Macri.
A painful lesson for Argentine electors.
A typical comment made by a Kirchner fanatic, totally clueless about economics. The Kirchner governments over their 12 year rule doubled the size of the government (spending went from 23% to 44% of GDP), doubled the tax rate, and still managed to leave a huge fiscal deficit (10% of GDP including provinces) which the present government has lowered to 6%. The Argentine economy hasn't grown two years straight since 2011, and the poverty rate left by Cristina Kirchner is higher than when she took over. (30% in 2015 vs. 26% in 2007 - 8 wasted years). On top of this, we can add the pernicious double-digit inflation created by the Kirchners due to reckless money printing to finance the budget hole, and the dozens of lost international demands due to stiffing creditors and bondholders, a huge bill which the Macri government has been left to pay.
I very much prefer a recession due to this necessary austerity to plug the fiscal hole left by the Kirchners, than the reckless money printing of the Kirchners which would have led Argentina to an hyperinflation just like the one in Venezuela today. (Chavez and Cristina had the same policies, Venezuela was just ahead of the curve).
Macri may be a flawed leader, but he has saved Argentina from a Venezuelan fate. As desperate Venezuelan emigrants flood Buenos Aires (mostly middle class professionals) most Argentines are beginning to realize the bullet that we just dodged.
I will recommend señor Cat to read the story above again.
Same as president Macri, Cat turns a blind eye on the current situation in Argentina, which is what matters -- and keeps talking about a government that ceased to exist 32 months ago.
Come on, Cat. Read it again:
Argentina’s industrial output plunged 8.1% in June...the sharpest monthly drop since the country was in the grips of an economic meltdown in 2002.
Read it, Don Gato. The year is 2002.
Not 2003, 2006 or even 2015.
Answer me this. You're not happy with Macri and you want him do do things differently.
If you were handed the Presidency of Argentina today, with all its current economic problems laid on your desk, what specific economic moves would you make to:
1) raise the GDP,
2) increase gainful employment,
3) tame inflation down to 9%,
4) stabilize the peso,
5) increase production of basics like food and oil,
6) give all Argentines secure, independent futures for themselves.
Tell me your 12 point plan, be specific.
(don't dodge the question, OK)
To Reekie: ”Tell me your 12 point plan, be specific. (don't dodge the question, OK)”
Over 24 hours later and no reply from Reekie...
I would do exactly the opposite of what Macri has done -- point by point.
1) raise the GDP: Stimulate the domestic sector--production and consumption must increase. You need to curtail the absolute freedom of capitals to come and go as they please. Put an end to capital flight, tax luxury items, reinstate meaningful export taxes, stop bleed of dollars due to excessive tourism abroad.
2) increase gainful employment: Again. Priority must be given to the domestic sector. Only local consumption will make a dynamic economy that is self-sustaining and does not depend on foreign decisions. Argentina must be an independent country once for all.
3) tame inflation down to 9%: Taming inflation is important but not the first priority. Macri claimed inflation was the easiest thing for a government to do and look where he is. Inflation will go down once you have a healthy economy.
4) stabilize the peso: Again, you need a strong domestic economy to give value to the local currency. End the current party that sees short-term capitals coming, making a buck and then taking off.
5) increase production of basics like food and oil: Of course, you can't even begin to heal the Argentine economy if you sabotage it as Macri has consistently been doing for almost three years. Stop importing stupid things such as porc and oranges that are killing our regional economies. Trade must be on items we can't produce locally.
6) give all Argentines secure, independent futures for themselves: Why, this would be a valuable goal. The first thing that is needed is to want to do it. If the government has contempt for Argentines as the current one does, the results are what we see. Put Argentines in the driver's seat. Allow the scientists, the technicians, the artists and the workers to thrive and they'll work wonders. Make it in such a way we get back our lost brainpower. Progress will ensue.
1/2. Stimulate the domestic sector--production and consumption must increase. ...reinstate meaningful export taxes...
But doesn't the domestic sector, especially agriculture, depend on exports?
6. Allow the scientists, the technicians, the artists and the workers to thrive and they'll work wonders. Make it in such a way we get back our lost brainpower. Progress will ensue.
I'll agree with that one, but it does take time. Ireland had a policy of producing highly trained scientists etc. when there were no jobs for them in Ireland, but eventually the jobs came because of the quality of the workforce.
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