3 ms·

> Sad to read this. Most LatAm leftist governments tried the same formula over the past 2 decades, with disastrous consequences. Korea, Taiwan, Japan and china

> Sad to read this. Most LatAm leftist governments tried the same formula over the past 2 decades, with disastrous consequences. Korea, Taiwan, Japan and china tried it with spectacular results. Also, latin america is a especial situation because they are within the US sphere of influence. Their economic situation is far more complex because of it. > exactly like the one in Argentina and Brazil. Brazil and especially argentina's financial problems were a result of international borrowing, not domestic borrowing.

knuththetruth 9y ago
Yeah, it's quite interesting how the parent skirts over all the history of US involvement in Latin American during the Cold War, while at the same time ignoring any inconvenient counterexamples.
ucaetano 9y ago
> Brazil and especially argentina's financial problems were a result of international borrowing, not domestic borrowing. Patently false. The public debt in Brazil has been almost entirely internal for the past 10 years. Should I show you a chart to settle it? > Korea, Taiwan, Japan and china tried it with spectacular results. Quite the opposite, actually. They received massive inflows of foreign investment, and very high domestic savings rate. That's the difference you're not seeing: the Asian countries you mentioned have a history of very high savings rate, this generates a stock of capital that the government and companies can borrow at low costs to develop. Poland (and the LatAm countries I mentioned) have very low or negative savings rate, and almost no capital stock, so any increase in borrowing by the government has to be met with foreign capital or it will cause inflation and higher interest rates.
- zombieprocesses 9y ago
  > Patently false. The public debt in Brazil has been almost entirely internal for the past 10 years. Should I show you a chart to settle it? Why not show it rather than asking for my permission? But since you asked, please do. And show me the one for argentina while you are at it. Here is brazil's external debt. Increased 250% in 10 years. https://tradingeconomics.com/brazil/external-debt https://tradingeconomics.com/brazil/external-debt > Quite the opposite, actually. They received massive inflows of foreign investment, and very high domestic savings rate. Foreign investment != external debt. So their high domestic saving rates means they had little need to borrow internationally? That was my point. > the Asian countries you mentioned have a history of very high savings rate, this generates a stock of capital that the government and companies can borrow at low costs to develop. But you wrote that it was quite the opposite just a sentence ago? I'm saying that korea, taiwan, japan and china did not depend on foreign borrowing. You conflate foreign investment with borrowing. Then you contradict yourself. > Poland (and the LatAm countries I mentioned) have very low or negative savings rate, and almost no capital stock, so any increase in borrowing by the government has to be met with foreign capital or it will cause inflation and higher interest rates. Well then they need to increase their savings rate or limit their borrowing?
  - ucaetano 9y ago
    > Why not show it rather than asking for my permission? But since you asked, please do. And show me the one for argentina while you are at it. Here is brazil's external debt. Increased 250% in 10 years. That number is irrelevant, look at the composition: http://www.tesouro.fazenda.gov.br/ca/web/stn/a-divida-em-grandes-numeros http://www.tesouro.fazenda.gov.br/ca/web/stn/a-divida-em-gra... I guess that settles it then. Maybe you shouldn't talk about the economic situation of a country you seem to know nothing about. > Foreign investment != external debt. Indeed, but foreign investment creates local stocks of capital, lowering internal interest rates and allowing for the government to borrow internally without significantly impacting businesses and households. > But you wrote that it was quite the opposite just a sentence ago? I'm saying that korea, taiwan, japan and china did not depend on foreign borrowing. You conflate foreign investment with borrowing. Then you contradict yourself. As you said yourself, Foreign investment != external debt. Forgot about that? > Well then they need to increase their savings rate or limit their borrowing? Both. Increasing savings rate takes many years to generate a stock of capital. In the meantime, they need to reduce government spending and borrow internationally.

knuththetruth 9y ago

Yeah, it's quite interesting how the parent skirts over all the history of US involvement in Latin American during the Cold War, while at the same time ignoring any inconvenient counterexamples.

ucaetano 9y ago

> Brazil and especially argentina's financial problems were a result of international borrowing, not domestic borrowing. Patently false. The public debt in Brazil has been almost entirely internal for the past 10 years. Should I show you a chart to settle it? > Korea, Taiwan, Japan and china tried it with spectacular results. Quite the opposite, actually. They received massive inflows of foreign investment, and very high domestic savings rate. That's the difference you're not seeing: the Asian countries you mentioned have a history of very high savings rate, this generates a stock of capital that the government and companies can borrow at low costs to develop. Poland (and the LatAm countries I mentioned) have very low or negative savings rate, and almost no capital stock, so any increase in borrowing by the government has to be met with foreign capital or it will cause inflation and higher interest rates.

zombieprocesses 9y ago
> Patently false. The public debt in Brazil has been almost entirely internal for the past 10 years. Should I show you a chart to settle it? Why not show it rather than asking for my permission? But since you asked, please do. And show me the one for argentina while you are at it. Here is brazil's external debt. Increased 250% in 10 years. https://tradingeconomics.com/brazil/external-debt https://tradingeconomics.com/brazil/external-debt > Quite the opposite, actually. They received massive inflows of foreign investment, and very high domestic savings rate. Foreign investment != external debt. So their high domestic saving rates means they had little need to borrow internationally? That was my point. > the Asian countries you mentioned have a history of very high savings rate, this generates a stock of capital that the government and companies can borrow at low costs to develop. But you wrote that it was quite the opposite just a sentence ago? I'm saying that korea, taiwan, japan and china did not depend on foreign borrowing. You conflate foreign investment with borrowing. Then you contradict yourself. > Poland (and the LatAm countries I mentioned) have very low or negative savings rate, and almost no capital stock, so any increase in borrowing by the government has to be met with foreign capital or it will cause inflation and higher interest rates. Well then they need to increase their savings rate or limit their borrowing?
- ucaetano 9y ago
  > Why not show it rather than asking for my permission? But since you asked, please do. And show me the one for argentina while you are at it. Here is brazil's external debt. Increased 250% in 10 years. That number is irrelevant, look at the composition: http://www.tesouro.fazenda.gov.br/ca/web/stn/a-divida-em-grandes-numeros http://www.tesouro.fazenda.gov.br/ca/web/stn/a-divida-em-gra... I guess that settles it then. Maybe you shouldn't talk about the economic situation of a country you seem to know nothing about. > Foreign investment != external debt. Indeed, but foreign investment creates local stocks of capital, lowering internal interest rates and allowing for the government to borrow internally without significantly impacting businesses and households. > But you wrote that it was quite the opposite just a sentence ago? I'm saying that korea, taiwan, japan and china did not depend on foreign borrowing. You conflate foreign investment with borrowing. Then you contradict yourself. As you said yourself, Foreign investment != external debt. Forgot about that? > Well then they need to increase their savings rate or limit their borrowing? Both. Increasing savings rate takes many years to generate a stock of capital. In the meantime, they need to reduce government spending and borrow internationally.