United States of Argentina
March 31, 2010
When White House Chief of Staff Rahm Emanuel last year advised "never waste a good crisis," he likely was thinking ahead to President Obama's economic stimulus program and health care plan. After swelling the federal deficit by passing the stimulus at a cost of nearly $1 trillion, Democrats in Congress signed off on Obamacare, with a price tag, according to Rep. Paul Ryan, R-Wis., of $2.3 trillion in its first decade alone. With federal spending exploding at such a rate, it's no wonder that Moody's Investor Service recently warned that it would downgrade the U.S. government's credit rating if it concludes "the government was unable and/or unwilling to quickly reverse the deterioration it has incurred."
What the United States government will do in the future may be in question, but we need not look far to find past examples of countries unwilling to get their finances in order. Consider Argentina. In 1914, it was one of the wealthiest countries in the world, and its living standard exceeded that of Western Europe until the late 1950s. Then President Juan Peron squandered his nation's prosperity by introducing a host of redistributionist economic and regulatory policies, nationalizing utilities and foreign investments, and pumping up the national debt. What followed was three decades of political instability, growing dependency, and economic stagnation.
There was a brief period of privatization and booming foreign investment in what the American Enterprise Institute's Mark Falcoff called Argentina's "go go" 1990s. But that was negated by the return of political leaders espousing Peronist principles who created a downward economic spiral by breaking contracts with foreign utility companies that had invested heavily in Argentina. Today, the country has lost its international credit standing and an estimated 10 percent of the population has moved abroad to escape the stifling taxes, regulation and inefficiency. To make matters worse, President Cristina Kirchner recently attracted attention for firing the president of the country's central bank. His sin was refusing to go along with her inflationary spending policies (Argentina's inflation is 17 percent) and challenging her demand that he hand over $6.6 billion in bank reserves.
Besides sending federal spending skyrocketing, Obama has, like so many of the politicians who ruined Argentina, dramatically increased government regulation of business, nationalized major sectors of the economy, and imposed a lengthy list of tax increases. America today is no more exempt from economic reality than Argentina was in years past. Make no mistake, these actions will eventually drain the life from this nation's economic vitality, just as they did in Argentina.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/United-States-of-Argentina-89551242.html#ixzz0jmjrLkPH
I think this is a very interesting article and a very controversial subject. Many people have strong opinions on what is being called "Obamacare". I suppose we can sometimes look to the past to see how the future may go but while listening to the President speak today, I was interested to hear him say, that he had just signed the law last week. We don't know how it is going to go yet. He likened it to planting seeds on a farm and going out the next week and being upset because there is no crop growing. I'm inclined to wait and see what happens. I know in November many are going to try to repeal the law. President Obama stated that it is now a perfect law and things may need to be changed a long the way, but he seemed to be open to those changes and not glued only to what he signed last week. Maybe I am being naive - and I definitely see that government spending is out of control but I don't think I can say that I feel that the United States is going the way of Argentina as suggested in this article. It is certainly something to consider and be aware of. Also, I had no idea of the history of Argentina and I think this article gives a great overview of it. It's sad to think that this once economically sound country now has people moving out because of all the mistakes made in their government.
ReplyDeleteI think that fear prevents progress. We are a changing world and a changing society and I think it's time for the government to catch up. While I may not agree line for line with the new healthcare bill, I'm not about to throw it out the window based on fear...
ReplyDeleteInteresting and very opinionated article. I think that while history is a good place to look in order to make decisions about the present, I think that looking too far back can distort things because ways of doing things change based on the progression of peoples opinions. It is also hard to compare the economics of other countries to those of the US because we are one of the most conservative countries. Like Jarica, I don't agree with everything that the healthcare bill states but only time will tell if it will help or hurt our country financially. While I think the article was interesting, especially because it presents an opinion I don't necessarily agree with, I think that it's too soon to start comparing "Obamacare" or our countries spending with the history of other countries until it's been in place long enough to understand it's effects.
ReplyDeleteAsia, it's funny that you mention it's too soon. I watched the speech the President gave in Portland last week, (on tv) and he said it was like planting a crop one day and going out the next day and being disappointed that nothing has grown yet. It is much to soon to see how this is going to go since it hasn't started yet. I also do not agree with every line of this bill but we have to start somewhere - (too many people don't have insurance!)
ReplyDeleteabsolutely cindy, that's the whole point isn't it....health care should be a basic human right not a privilege. too many people go without it. i do think that we should proceed with caution however, its extremely important to consider the consequences of any policy changes.
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