I think the state of economics – never mind the economy – in Argentina may be parlous indeed. This description of a “Debt Museum” opened in the economics department of the University of Buenos Aires gives me the impression of simplification reduced to metaphor – and inapposite metaphor at that.
The policies of the IMF are rightly criticized, but with a kitchen containing bare cupboards? The “black hole” exhibit, into which debt repayments are supposed to have “disappeared” actually went to creditors, which included governments, tycoons, widows, and orphans in countries all over the world (to whom “Argentina” has become a synonym for “deadbeat”).
Museums, I thought, are supposed to educate by illustration. In view of the subject, even without local political preferences, the failure of this one seems foregone. The only bad part would be if anyone were to visit it, and try to draw understanding from it.
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An exilarant museum! The beaurocrat IMF give money to Argentine Government not to private citizen. Government leaders have names & surname.This kind of transaction have nothing to do with a private contract. IMF, supported by other Government, have to ask money back from individuals directly NOT to a whole body of a beaurocracy. Beeing the private argentinians citizen borrowed nothing in a contract they owe nothing. Curious enough, creditors are mainly widows and orphans to which paper was sold by corrupted banks. I doubt government is creditor in this case and if it’s well done, taxpayers has to take on their soulders, as usuals. About tycoons I think there are no creditor to this kind of debts and if there are some is only stupid so is merit it. Libertarins have to avoid a double discourse about private debt and government debt: are two different kind of contracts.
“parlous”?
“exilarant”?
Parlous is a perfectly good word; comes from perilous. Exilarant is misspelled if he means exhilarant, but I suspect he’s mistranslating something from Spanish or whatever his native language is.
Learn something new every day. But “parlous” is certainly not in common use. I suppose we should forgive our Italian friend for not managing the difficulties of English. I suspect he meant excellent or exhilirating.
I lived in Argentina for a time and I remember my amusement at the hatred Argentines would sometimes express toward the United States for the dastardly act of lending them money. Before the 2000 presidential election, someone asked me whom I would vote for if I were back home, noting that Gore was a Democrat and therefore might be more forgiving of their debts. My response was something like “In that case, I’d vote for Bush.”
I thank Michael for grammatical correction and meaning interpretation: always a good boys here to help.Great sense of respect and education.
Perrosuelto makes a good point. This is what I wrote in the Financial Times last year concerning Argentine debt:
Argentines should press government to repudiate sovereign debt
By Grant Nülle
Financial Times; Feb 20, 2004
From Mr Grant M. Nülle.
Sir, As Joshua Goodman reports, reservations concerning Argentina’s belligerent stance towards debt restructuring are beginning to be vented via the country’s Mervel index (“Argentina’s leaders get a dose of economic reality”, February 17).
As the growth potential of harnessing idle equipment and labour become exhausted, Argentine firms will require sources of investment if they are to sustain the country’s current economic recovery. With these means and ends in mind, Argentines should press their government to repudiate its sovereign debt to multilateral and private lenders alike.
To the casual observer this suggestion is anathema for it violates the sanctity of contracts. However, there is a fundamental distinction between private and public debt.
In the former case, where a low-time preference creditor lends money to a high-time preference borrower in exchange for repayment plus interest, to repudiate one’s debts is tantamount to depriving the lender of his property, which is indefensible.
In regard to public debt, governments do not pledge their own assets, but taxpayers’ instead, with creditors cognisant that the principle and interest will be paid through the involuntary confiscation of private property taxation. In effect both sides are complicit in the violation of property rights of a third party in the future, which scarcely deserves to be acknowledged as a contract.
Beyond the dodgy status of public debt contracts, debt repudiation is beneficial in two respects. Immediately it relieves the citizenry of onerous debt repayments. More importantly, by denying the Argentine government credit altogether, it will be compelled to operate within the constraints of a balanced budget, a novel notion in that country’s history.
Indeed, many of Argentina’s economic ills throughout this and the past century can be attributed to politicians’ insatiable appetite to borrow and spend, with the attendant annihilation of the citizenry’s savings and capital.
And as for private Argentine firms, foreign capital will return to invest in profitable enterprises and indigenous sources of funding will begin to surface as the profligate public sector is reined in.
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