7 ms·

Argentina celebrates first quarterly budget surplus in 16 years

72 points by samspenc 2y ago

smnm 2y ago
Celebrates with 1 million people protesting against the budget cuts for education system. Not quite the achievement.
- chmod600 2y ago
  Sometimes hard choices need to be made. What's your alternative proposal?
  - Daishiman 2y ago
    The cuts Milei is doing are purely ideological and not even the most reticent of budget hawks )including the IMF) ever considered these cuts necessary or sustainable. The man is mentally insane and despises every public institution. What they’re not saying here is that tax revenue is dropping and will wipe out any of these gains and that installed industrial activity dropped by over 30% since he assumed office.
    - totetsu 2y ago
      Yeah, how do you become a wealthy country with a strong tax base if your citizens don’t get education?
      - argentinian 2y ago
        The educational level was declining lately, as seen in the PISA tests. Milei is not to blame for that.
    - StevePerkins 2y ago
      The point is not to balance a budget. The point is to rein in persistently triple-digit inflation. Everyone wants to have their cake and eat it too, but the reality is that you fight inflation by cooling economic activity for a period.
      - Daishiman 2y ago
        A 30-40% real drop in economic activity and a reduction by half in purchases of medical consumer items isn't "cooling"; it is an active destruction of the real economy that has absolutely no rationale.
        iraqmtpizza 2y ago
        You literally just made that up. You probably think that everyone's salary got cut in half when the government stopped lying about the value of their currency.
    - nradov 2y ago
      What specifically would you propose to balance the budget?
- bawolff 2y ago
  For better or worse, if it was easy and everyone agreed, it wouldn't be an achievement. There isn't always a path forward that leaves everyone happy.
- IncreasePosts 2y ago
  If they didn't like it they should have fought harder to avoid his election. He was quite clear what he was going to do.
- slashdev 2y ago
  You do what you have to do. There was no way out that doesn’t involve pain. The US should pay attention, it’s on the same path right now. If they don’t get the spending under control, it will end in pain. The bill eventually comes due.
  - nocoiner 2y ago
    I wouldn’t bet against the United States growing its way out of the current debt-to-GDP ratio (which, while mildly alarming, is far from unprecedented either here or elsewhere at various stages in history). The current revenue/spending mismatch could be solved with modest tax increases.
    - slashdev 2y ago
      It’s not the ratio which is alarming, although it isn’t great. It’s the rate of growth. It’s not sustainable at all.
    - hackeraccount 2y ago
      I'm a bit disturbed by state of the US finances. I'm really disturbed by the political response to those finances. Nominally the Democratic party is committed to modest tax increases in the same way that the Republican party is committed to modest spending cuts. It would be nice to see either party advance in any way towards those commitments. Whenever either party has the opportunity (i.e. control of Congress and the Executive) to do anything they invariably either cut taxes (GOP) or increase spending (Democrats) or both. Fiscally only a divided government moves closer to fiscal sensibility.
  - throw0101c 2y ago
    > The bill eventually comes due. No, it does not. The (e.g.) UK has, over its history, been in far "worse" financial shape than the US is or ever was. The UK was over 150% debt-to-GDP multiple occasions, as well as over 200%, and at one point (post-WW2) almost 250%: * https://en.wikipedia.org/wiki/File:UK_debt_as_GDP_percent.png https://en.wikipedia.org/wiki/File:UK_debt_as_GDP_percent.pn... * https://en.wikipedia.org/wiki/United_Kingdom_national_debt#Modern_era https://en.wikipedia.org/wiki/United_Kingdom_national_debt#M... There were times when just interest was 10% of GDP: * https://en.wikipedia.org/wiki/File:UK_National_Debt_interest.png https://en.wikipedia.org/wiki/File:UK_National_Debt_interest... The UK has bonds dating back to South Sea Bubble crisis of 1720, the Napoleonic and Crimean wars, the Irish potato famine, and World War 1: * https://www.theguardian.com/business/2014/oct/31/uk-first-world-war-bonds-redeemed https://www.theguardian.com/business/2014/oct/31/uk-first-wo... And yet they've managed to survive and be a pretty decent place to live. Most of the economic troubles they've gone through were either global in scale (Great Depression, GFC) or self-inflicted (Gold Standard post-WW1 (too high a peg), Thatcherism, Brexit), that had little/nothing to do with debt. One does have to be mindful that debt servicing costs don't crowd out more important spending (education, health), but to think there's some magic number that causes issues has not been born out by the historical record; see Reinhart and Rogoff retraction: * https://archive.ph/PtwWF https://archive.ph/PtwWF / https://www.newyorker.com/news/john-cassidy/the-reinhart-and-rogoff-controversy-a-summing-up https://www.newyorker.com/news/john-cassidy/the-reinhart-and...
viburnum 2y ago
“The government also adopted cost-cutting measures while inflation rates increased, allowing nearly 300 per cent annual inflation to erode real public spending on wages and pensions.” That’s one way to do it.
- ayakang31415 2y ago
  Help me understand how the inflation has not slowed down in Argentina. I am looking at Argentina peso to usd chart over the past one year, and recent devaluation of peso is relatively flat compared to the declining rate a few months ago.
  - mastax 2y ago
    Milei has committed to dollarization, so at some point pesos are likely to be worthless. The government probably will (?) offer to exchange pesos for dollars but the government doesn’t have many dollars so their rate is likely to be terrible. He has removed many of the controls which were intended to protect the peso.
    - guidedlight 2y ago
      The government would need to borrow enough USD for the exchange. So it would need to convince lenders, not an easy task. The entire process would also need to be secret, to preserve the value of the peso as much as possible.
      - skissane 2y ago
        He could also just go with a "soft dollarisation" in which USD is declared to be legal tender, alongside the peso–and then see what happens next. From what I heard (from Argentines I know), a lot of Argentine professionals desire to be paid by their employers in USD not peso, but that is technically illegal (not to say it doesn't sometimes happen anyway). Making that completely legal could be a step towards increasing use of USD and reducing use of peso in the Argentine economy.
- 2y ago
rgmerk 2y ago
For those unfamiliar Argentina was, at the start of the 20th century, among the richest countries on Earth. After many decades of mismanagement, it has a GDP per capita roughly equal to the likes of Mauritius (which 30 years ago was a far poorer place).
- Daishiman 2y ago
  This is false and for some reason repeated over and over again on the internet. Argentina was never a rich country and at its highest point in per-capita wealth most of it was concentrated in a few land-owning oligarch families while the rest of the population lives in the abject poverty that was common in the rest of the Americas at the time.
  - astrodust 2y ago
    So not unlike America during the robber baron era!
    - 23B1 2y ago
      which robber baron era ¬_¬
  - Shawnecy 2y ago
    > The massive wave of European immigration they promoted—second only to the United States'—led to a near-reinvention of Argentine society and economy that by 1908 had placed the country as the seventh wealthiest[65] developed nation[66] in the world. https://en.wikipedia.org/wiki/Argentina https://en.wikipedia.org/wiki/Argentina
    - Daishiman 2y ago
      The data uses the Maddison database, which is incomplete and imprecise. https://chequeado.com/ultimas-noticias/javier-milei-la-argentina-arranco-el-siglo-xx-siendo-el-pais-mas-rico-del-mundo-y-hoy-esta-en-el-puesto-140-al-tipo-de-cambio-paralelo/ https://chequeado.com/ultimas-noticias/javier-milei-la-argen...
chmod600 2y ago
"These reforms include currency devaluation..." How does that reduce inflation and cause a surge in bond prices?
- barfard 2y ago
  [dead]
- skellington 2y ago
  Currency devaluation was the norm for Argentina for the last 30 years and NOW the squid-turds are worried about it? He was going to stop that train on a dime. Things take time, they have more pain before the restoration.
  - lenerdenator 2y ago
    Some people have more pain before the restoration. Incidentally those are the same people screwed by inflation.
  - rokkitmensch 2y ago
    Please oh please tell me what a squid-turd is!
- NooneAtAll3 2y ago
  for some time offician and unofficial exchange rates had a mismatch official rate was accelerated to catch up
clint 2y ago
And he only needed to completely destroy the country's future to achieve it!
- diegoholiveira 2y ago
  LOL
- IncreasePosts 2y ago
  Argentina didn't have a future. Maybe it still doesn't, but at least something new is being tried.
- argentinian 2y ago
  Which future? It had tendencies of increasing poverty, increasing inflation and decreasing educational level.
deleted 2y ago
[deleted]
bernawil 2y ago
anybody who believes this hasn't been paying attention to Spanish language sources. It's clear to everybody now the government is cooking the books trying to get another IMF loan. It's all creative accounting hiding away the debt to importers (they are just not paying). Milei brought in Caputo, the mastermind behind 2015-2019 admin that took huge loans from the market and later the IMF and defaulted in 2019. They set >70% (real) interest rates that straight up killed the real economy. Every single productive industry is picking up and moving to Brazil.
karma_pharmer 2y ago
¡Afuera! revs chainsaw
todoesverso 2y ago
"Celebrate" is not the right word. The government stop founding oncology patients, stop sending food to community kitchens, raise the poverty level to 60% among other things. So nothing to celebrate, no merit on having budget surplus by starving your people.

72 points by samspenc 2y ago

smnm 2y ago

Celebrates with 1 million people protesting against the budget cuts for education system. Not quite the achievement.

chmod600 2y ago
Sometimes hard choices need to be made. What's your alternative proposal?
- Daishiman 2y ago
  The cuts Milei is doing are purely ideological and not even the most reticent of budget hawks )including the IMF) ever considered these cuts necessary or sustainable. The man is mentally insane and despises every public institution. What they’re not saying here is that tax revenue is dropping and will wipe out any of these gains and that installed industrial activity dropped by over 30% since he assumed office.
  - totetsu 2y ago
    Yeah, how do you become a wealthy country with a strong tax base if your citizens don’t get education?
    - argentinian 2y ago
      The educational level was declining lately, as seen in the PISA tests. Milei is not to blame for that.
  - StevePerkins 2y ago
    The point is not to balance a budget. The point is to rein in persistently triple-digit inflation. Everyone wants to have their cake and eat it too, but the reality is that you fight inflation by cooling economic activity for a period.
    - Daishiman 2y ago
      A 30-40% real drop in economic activity and a reduction by half in purchases of medical consumer items isn't "cooling"; it is an active destruction of the real economy that has absolutely no rationale.
      - iraqmtpizza 2y ago
        You literally just made that up. You probably think that everyone's salary got cut in half when the government stopped lying about the value of their currency.
  - nradov 2y ago
    What specifically would you propose to balance the budget?
bawolff 2y ago
For better or worse, if it was easy and everyone agreed, it wouldn't be an achievement. There isn't always a path forward that leaves everyone happy.
IncreasePosts 2y ago
If they didn't like it they should have fought harder to avoid his election. He was quite clear what he was going to do.
slashdev 2y ago
You do what you have to do. There was no way out that doesn’t involve pain. The US should pay attention, it’s on the same path right now. If they don’t get the spending under control, it will end in pain. The bill eventually comes due.
- nocoiner 2y ago
  I wouldn’t bet against the United States growing its way out of the current debt-to-GDP ratio (which, while mildly alarming, is far from unprecedented either here or elsewhere at various stages in history). The current revenue/spending mismatch could be solved with modest tax increases.
  - slashdev 2y ago
    It’s not the ratio which is alarming, although it isn’t great. It’s the rate of growth. It’s not sustainable at all.
  - hackeraccount 2y ago
    I'm a bit disturbed by state of the US finances. I'm really disturbed by the political response to those finances. Nominally the Democratic party is committed to modest tax increases in the same way that the Republican party is committed to modest spending cuts. It would be nice to see either party advance in any way towards those commitments. Whenever either party has the opportunity (i.e. control of Congress and the Executive) to do anything they invariably either cut taxes (GOP) or increase spending (Democrats) or both. Fiscally only a divided government moves closer to fiscal sensibility.
- throw0101c 2y ago
  > The bill eventually comes due. No, it does not. The (e.g.) UK has, over its history, been in far "worse" financial shape than the US is or ever was. The UK was over 150% debt-to-GDP multiple occasions, as well as over 200%, and at one point (post-WW2) almost 250%: * https://en.wikipedia.org/wiki/File:UK_debt_as_GDP_percent.png https://en.wikipedia.org/wiki/File:UK_debt_as_GDP_percent.pn... * https://en.wikipedia.org/wiki/United_Kingdom_national_debt#Modern_era https://en.wikipedia.org/wiki/United_Kingdom_national_debt#M... There were times when just interest was 10% of GDP: * https://en.wikipedia.org/wiki/File:UK_National_Debt_interest.png https://en.wikipedia.org/wiki/File:UK_National_Debt_interest... The UK has bonds dating back to South Sea Bubble crisis of 1720, the Napoleonic and Crimean wars, the Irish potato famine, and World War 1: * https://www.theguardian.com/business/2014/oct/31/uk-first-world-war-bonds-redeemed https://www.theguardian.com/business/2014/oct/31/uk-first-wo... And yet they've managed to survive and be a pretty decent place to live. Most of the economic troubles they've gone through were either global in scale (Great Depression, GFC) or self-inflicted (Gold Standard post-WW1 (too high a peg), Thatcherism, Brexit), that had little/nothing to do with debt. One does have to be mindful that debt servicing costs don't crowd out more important spending (education, health), but to think there's some magic number that causes issues has not been born out by the historical record; see Reinhart and Rogoff retraction: * https://archive.ph/PtwWF https://archive.ph/PtwWF / https://www.newyorker.com/news/john-cassidy/the-reinhart-and-rogoff-controversy-a-summing-up https://www.newyorker.com/news/john-cassidy/the-reinhart-and...

viburnum 2y ago

“The government also adopted cost-cutting measures while inflation rates increased, allowing nearly 300 per cent annual inflation to erode real public spending on wages and pensions.” That’s one way to do it.

ayakang31415 2y ago
Help me understand how the inflation has not slowed down in Argentina. I am looking at Argentina peso to usd chart over the past one year, and recent devaluation of peso is relatively flat compared to the declining rate a few months ago.
- mastax 2y ago
  Milei has committed to dollarization, so at some point pesos are likely to be worthless. The government probably will (?) offer to exchange pesos for dollars but the government doesn’t have many dollars so their rate is likely to be terrible. He has removed many of the controls which were intended to protect the peso.
  - guidedlight 2y ago
    The government would need to borrow enough USD for the exchange. So it would need to convince lenders, not an easy task. The entire process would also need to be secret, to preserve the value of the peso as much as possible.
    - skissane 2y ago
      He could also just go with a "soft dollarisation" in which USD is declared to be legal tender, alongside the peso–and then see what happens next. From what I heard (from Argentines I know), a lot of Argentine professionals desire to be paid by their employers in USD not peso, but that is technically illegal (not to say it doesn't sometimes happen anyway). Making that completely legal could be a step towards increasing use of USD and reducing use of peso in the Argentine economy.
2y ago

rgmerk 2y ago

For those unfamiliar Argentina was, at the start of the 20th century, among the richest countries on Earth. After many decades of mismanagement, it has a GDP per capita roughly equal to the likes of Mauritius (which 30 years ago was a far poorer place).

Daishiman 2y ago
This is false and for some reason repeated over and over again on the internet. Argentina was never a rich country and at its highest point in per-capita wealth most of it was concentrated in a few land-owning oligarch families while the rest of the population lives in the abject poverty that was common in the rest of the Americas at the time.
- astrodust 2y ago
  So not unlike America during the robber baron era!
  - 23B1 2y ago
    which robber baron era ¬_¬
- Shawnecy 2y ago
  > The massive wave of European immigration they promoted—second only to the United States'—led to a near-reinvention of Argentine society and economy that by 1908 had placed the country as the seventh wealthiest[65] developed nation[66] in the world. https://en.wikipedia.org/wiki/Argentina https://en.wikipedia.org/wiki/Argentina
  - Daishiman 2y ago
    The data uses the Maddison database, which is incomplete and imprecise. https://chequeado.com/ultimas-noticias/javier-milei-la-argentina-arranco-el-siglo-xx-siendo-el-pais-mas-rico-del-mundo-y-hoy-esta-en-el-puesto-140-al-tipo-de-cambio-paralelo/ https://chequeado.com/ultimas-noticias/javier-milei-la-argen...

chmod600 2y ago

"These reforms include currency devaluation..." How does that reduce inflation and cause a surge in bond prices?

barfard 2y ago
[dead]
skellington 2y ago
Currency devaluation was the norm for Argentina for the last 30 years and NOW the squid-turds are worried about it? He was going to stop that train on a dime. Things take time, they have more pain before the restoration.
- lenerdenator 2y ago
  Some people have more pain before the restoration. Incidentally those are the same people screwed by inflation.
- rokkitmensch 2y ago
  Please oh please tell me what a squid-turd is!
NooneAtAll3 2y ago
for some time offician and unofficial exchange rates had a mismatch official rate was accelerated to catch up

clint 2y ago

And he only needed to completely destroy the country's future to achieve it!

diegoholiveira 2y ago
LOL
IncreasePosts 2y ago
Argentina didn't have a future. Maybe it still doesn't, but at least something new is being tried.
argentinian 2y ago
Which future? It had tendencies of increasing poverty, increasing inflation and decreasing educational level.

deleted 2y ago

[deleted]

bernawil 2y ago

anybody who believes this hasn't been paying attention to Spanish language sources. It's clear to everybody now the government is cooking the books trying to get another IMF loan. It's all creative accounting hiding away the debt to importers (they are just not paying). Milei brought in Caputo, the mastermind behind 2015-2019 admin that took huge loans from the market and later the IMF and defaulted in 2019. They set >70% (real) interest rates that straight up killed the real economy. Every single productive industry is picking up and moving to Brazil.

karma_pharmer 2y ago

¡Afuera! revs chainsaw

todoesverso 2y ago

"Celebrate" is not the right word. The government stop founding oncology patients, stop sending food to community kitchens, raise the poverty level to 60% among other things. So nothing to celebrate, no merit on having budget surplus by starving your people.