Slouching Towards Argentina

Argentina has always been a fascinating place for anyone who takes a look at their history and the events that occur there. W.E.B. Griffin, my favorite author, has written a series of delightful books about the lives of American agents operating in Argentina during World War II. Argentina evokes a sense of ridicule as you read of their crazy customs and history, which has often involved violence and the really ugly side of socialism.

As we contemplate the economic policies of our current President and the actions of public service union members in Wisconsin and elsewhere (on Monday, Wisconsin school teachers brought young school children to the state capitol to chant insults at their governor in an atmosphere of serious death threats that are also being made against him), is it a great stretch to think that we are on the road to becoming another Argentina? Are we on the road to wasting our enormous natural resources as have the Argentinians? After all, our gasoline crisis is entirely man-made as extreme environmental foolishness has hamstrung an America that has enormous oil and natural gas deposits.

Slouching Towards Argentina

By Peter Ferrara on 3.16.11 American Spectator (Excerpt)

"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.

By 2001-2002 demonstrations turned violent, with noisy crowds breaking the windows of major businesses and setting fires at their doors. Many companies began erecting large metal barriers to deny access to the crowds.

Today, Argentina ranks 53rd in the world in per capita GDP according to the International Monetary Fund, 57th in the CIA World Factbook , at a level less than one third that of America. But its national debt at 51% of GDP is actually less than that of the United States under the Obama Administration at 61% of GDP and rocketing skyward. Peron's party, the Justicialist Party (PJ), remains a central factor in Argentina's Kirchner government to this day.

Barack Peron?

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. The federal deficit last month alone, at $222.5 billion, was higher than the deficit for the entire year in 2007, at $161 billion, which was the last fiscal year for which the federal budget was adopted by a Republican-controlled Congress." American Spectator