Phillip Jenkins pens a telling consideration of the similarities between the U.S.’s current course of economic policy and the one which progressively ruined the Argentinian economy over the last century. While it is almost inconceivable to imagine an American economic downfall to the level of Zimbabwe, for example, Argentina’s “story involves a flourishing Western country with a large middle class that nevertheless managed to spend its way into banana-republic status by means very similar to those now being proposed in Washington.”
“When World War I began, Argentina was the world’s tenth wealthiest nation,” Jenkins explains. Buenos Aires was emerging as a world class city. Now, its public debt stands at 56 percent of the GDP, with 20 percent inflation. 60 percent of the population lives below the poverty line, and crime runs rampant. The middle class has all but disappeared, and the government is marked by the giant “For Sale” signs it seems to place on offices and court decisions.
What happened to cause such a change? Years of a sort of “New Deal on steroids” have all but destroyed private enterprise, leaving a corrupt and mismanaged government to run the country. Could the U.S. find itself with a similar fate? Hopefully not, but some indicators already look bad: “at over 60 percent of GDP, U.S. public debt is already higher than Argentina’s.”
Read the rest here.Published in