How Argentina Descended Into Poverty

How Argentina Descended Into Poverty

Once Argentina was one of the top ten richest countries in the world.

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.

Vineyard in Argentina

It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system.

Buenos Aires in 1920

Its level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.

Hipólito Irigoyen - The Progressive Leader that destroyed Argentina's economy.

In 1916, a new president was elected.
Hipólito Irigoyen had formed a progressive political party called
The Radicals under the banner of  “FUNDAMENTAL CHANGE”  with an appeal to the middle class.

Hipólito Irigoyen's party, THE RADICALS, also had a banner: FUNDAMENTAL CHANGE.

Among Irigoyen’s changes:
mandatory pension insurance,
mandatory health insurance,
and support for low-income housing construction
to stimulate the economy.

In all kinds of socialism (i.e., Communism, Fascism, Naziism, Socialism), the STATE takes some kind of control over 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.

Congreso - The Seat of Government in Argentina

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 our Social Security and Medicare programs.

Juan Perón - Fascist leader of Argentina

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.

This targeted group “swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated.”

Progressives, Fascists, Nazis and Communists have always exploited the resentment of the poor against the wealthy to gain control over them.

Under Perón, the size of government bureaucracies exploded through massive programs of social spending and by encouraging the growth of labor unions.

Juan Perón on the cover of Time magazine - The media has worshipped Progressivism, Socialism and Communism for years.

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.

One Million Peso note from Argentina

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…”

Gold - the only currency worth anything during hyperinflation

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.

Food Riots in Argentina

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 taxes crushed the private sector, further damaging the economy.

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.

By 2002, “…government fiscal irresponsibility… induced a national economic crisis as severe as America ‘s Great Depression.”

The Progressive movement, under the banner of “Fundamental Change” destroyed the economy of Argentina.

Universal health care, high taxes and government takeover of much of the economy ruined the prosperity they had enjoyed a century ago.

Progressives, Socialists and Communists are the enemies of the American Dream, and the architects of poverty, leading to economic slavery and the death of hope.