this post was submitted on 19 Feb 2024
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"Argentina registered a year-on-year inflation rate of 254.2 percent in January, the highest in 32 years, according to data released Wednesday by the National Institute of Statistics and Censuses (INDEC)"

Poorness rise to almost 58% while the president is refusing to hike the minimum wage, which is common to rise every 3 months or so even during the right wing liberal regime of Macri, but this guy FUCK NO he just signed a billion dollar subsidy to "Mercado Libre" the eCash monopoly owned by the richest Argentinean Galperin ~5 Billion of declared wealth

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[–] [email protected] 0 points 10 months ago (1 children)

I'm not an economics guy, when you say "core issues haven't been fixed" what is meant by this?

[–] [email protected] 1 points 10 months ago* (last edited 10 months ago) (2 children)

They keep doing the same thing again and again without fixing anything.

Imagine you earn $5k a month, but you spend $10k a month. You will eventually run out of credit and will go into default then bankruptcy.

This is what Argentina is doing.

It's also what America is doing, but so far she is getting away with it, mostly because she can just keep printing as many dollars as she wants as it's the reserve currency and therefore easy to inflate away the debt.

And remember, every bit of inflation is spending power out of your pocket. Remember what $100 bought you ten years ago?

Keynesian economists think this is fine and you can just going like this forever (running a country isn't the same as running a household, duh!). Those people are idiots and apparently don't understand basic math, but unfortunately they are running the show right now.

Eventually the good times will stop. The results will be catastrophic when this happens. People will die and more wars will break out. Even first world countries will not be immune.

Only question is when. For both Argentina and America and everyone else.

[–] [email protected] 1 points 10 months ago (1 children)

Thanks for explaining that to me. I've heard the US can print money because they own the debt, or something to that effect.

So do you agree with the idea that Milei's austerity measures will work in the long run? If you do, is there historical precedent to guide that belief?

[–] [email protected] 1 points 10 months ago (1 children)

So do you agree with the idea that Milei's austerity measures will work in the long run?

Probably not. The politics won't allow for it: everyone's thinking is short term and nobody cares about 10 years down the line. He will be blocked and sabotaged and removed before this gets to play out. Then the money printer will go brrrrrrrrrrrr

If it's allowed to stick, then yes, it should work in the long term, with some short to medium term pain. It's not impossible but it seems unlikely to work out that way. Maybe enough Argentinans with a long memory and basic math skills will allow it to happen. But don't count on it.

Similar to how an addict has to get off the drugs: hurts in the short term something fierce, then it gets better over time. Except here the drug is free money. Of course, many don't make it.

If you do, is there historical precedent to guide that belief?

Every fiat currency has eventually failed. Going right back the Romans and probably before that. When the greedy idiots in charge learn they can print money seemingly without consequence, then they will print.

[–] [email protected] 0 points 10 months ago (1 children)

I still struggle to understand how you believe it "should work in the long term." I would like, but i understand if you dont have, some kind of example where these measures have worked before.

When you say basic math it makes me feel like I'm missing something.

[–] [email protected] -1 points 10 months ago (1 children)

First comment explained it very simple

[–] [email protected] 1 points 10 months ago

Cool. I thought I might have missed something.

[–] [email protected] 0 points 10 months ago

You can earn 5k and spend 10k if you get a pay rise of 5k next month

In practice they spend a few percent more than they take in taxes and grow by a little more or less than that. COVID was a big jump in real debt but other than that it's generally stable ish

It's not obviously unsustainable