Don't Cry For Me,
America
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In the early 20th
century, Argentina was one of
the richest countries in the
world. While Great Britain's maritime power and its
far-flung empire had propelled it to a dominant position
among the world's industrialized nations, only the United
States challenged Argentina for the position of the
world's second-most powerful economy..
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It was blessed with
abundant agriculture, vast swaths of rich farmland laced
with navigable rivers and an accessible port system. Its
level of industrialization was higher than many European
countries: railroads, automobiles and telephones were
commonplace. |
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In 1916, a new
president was elected.. Hipólito Irigoyen had formed a
party called The
Radicals under the banner of
"fundamental change" with an appeal to the middle
class. |
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Among Irigoyen's
changes: mandatory pension insurance, mandatory health
insurance, and support for low-income housing construction
to stimulate the economy. Put simply, the state assumed
economic control of a vast swath of the country's
operations and began assessing new payroll taxes to fund
its efforts. |
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With an increasing
flow of funds into these entitlement programs, the
government's payouts soon became overly generous. Before
long its outlays surpassed the value of the taxpayers'
contributions. Put simply, it quickly became under-funded,
much like the United States' Social Security and Medicare
programs. |
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The death knell for
the Argentine economy, however, came with the election of
Juan Perón. Perón had a fascist and corporatist
upbringing; he and his charismatic wife aimed their
populist rhetoric at the nation's rich.
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This targeted group
"swiftly expanded to cover most of the propertied middle
classes, who became an enemy to be defeated and
humiliated." |
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Under Perón, the
size of government bureaucracies exploded through massive
programs of social spending and by encouraging the growth
of labor unions. |
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High taxes and
economic mismanagement took their inevitable toll even
after Perón had been driven from office. But his populist
rhetoric and "contempt for economic realities" lived on.
Argentina's federal government continued to spend far
beyond its means.. |
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Hyperinflation exploded in
1989, the final stage of a process
characterized by "industrial protectionism, redistribution
of income based on increased wages, and growing state
intervention in the economy." |
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The Argentinean
government's practice of printing money to pay off its
public debts had crushed the economy. Inflation
hit 3000%, reminiscent of the
Weimar Republic. Food riots were rampant; stores were
looted; the country descended into chaos.
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And by 1994,
Argentina's public pensions - the equivalent of Social
Security - had imploded. The payroll tax had increased
from 5% to 26%, but it wasn't enough. In addition,
Argentina had implemented a value-added tax (VAT), new
income taxes, a personal tax on wealth, and additional
revenues based upon the sale of public enterprises. These
crushed the private sector, further damaging the
economy. |
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A
government-controlled "privatization" effort to rescue
seniors' pensions was attempted. But, by 2001, those funds
had also been raided by the government, the monies
replaced by Argentina's defaulted government bonds.
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By 2002,
".government fiscal irresponsibility. induced a national
economic crisis as severe as America's Great
Depression." |
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We've seen this
movie before. The Democrats' populist plans can't possibly
work, because government bankrupts everything it touches.
History teaches us that ObamaCare and unfunded entitlement
programs will be utter, complete disasters.
Today's Democrats
are guilty of more than stupidity; they are enslaving
future generations to poverty and misery. And they will be
long gone when it all implodes. They will be as cold and
dead as Juan Perón when the piper must ultimately be
paid.
We should learn from history, Obama is
going down the same road that
suppressed Argentina.
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