[Winder]

I never said corp. taxes are "good" btw.. Just that we can spend............ without worrying about "paying for it"............bottom line.

Oh and you don't "tax" the poor to cover corp shortfalls........

Who is taxing the poor?

Chart: Nearly Half of All Americans Don't Pay Income Taxes

The top 20% of income earners (over $74,000) make 50% of the nation's income but pay nearly 70% of all federal taxes. The remaining 30% of the tax burden is borne by 80% of the taxpayers, those who make less than $74,000. The CBO report ("The Distribution of Household Income and Federal Taxes, 2008 and 2009") covers the years 1979-2009.

Argentina is currently attempting to spend their way to prosperity, and it is not working out very well for them.

[jeffkrol]

Who is taxing the poor?

Chart: Nearly Half of All Americans Don't Pay Income Taxes

The top 20% of income earners (over $74,000) make 50% of the nation's income but pay nearly 70% of all federal taxes. The remaining 30% of the tax burden is borne by 80% of the taxpayers, those who make less than $74,000. The CBO report ("The Distribution of Household Income and Federal Taxes, 2008 and 2009") covers the years 1979-2009.

Argentina is currently attempting to spend their way to prosperity, and it is not working out very well for them.

soc sec and medicare payroll taxes.. "Poor" (near poor, almost poor, just shy of poor) ARE taxed.. one way or another..............

As to Argentina is it "monetary" or this:........????
Argentina will be fine.. as they "learn".. US not learning....

Since late 2011, Argentina has become increasingly aggressive in blocking imports. While those measures protect some domestic producers from foreign competition, many economists said the main purpose is to bolster the central bank's international reserves by trimming import payments.

President Cristina Kirchner has borrowed heavily from the central bank to pay foreign creditors. Her 2012 budget calls for using $5.67 billion of reserves for that purpose.

Anecdotal evidence suggests import barriers are hurting a number of manufacturers, which now face lengthy delays in obtaining badly needed machinery, parts and supplies.

The barriers affect everyone from small retailers to dentists and doctors, who say they are having trouble importing medical equipment and supplies such as silicon and operating gloves. Coffee retailer Starbucks Corp. (SBUX) even recently offered an apology to its customers for offering coffee cups that were made domestically.

The trade barriers have already triggered a low-intensity trade war with Brazil. Meanwhile, the U.S., the European Union and other countries have filed a complaint with the World Trade Organization challenging Argentina's import regulations.

http://www.nasdaq.com/article/argentina-posts-102-billion-june-trade-surplus-20120723-01081

AND who are the "indebted" to..............

But some analysts say the government, which is desperate for additional cash, may now be more accurately reporting weak growth data because doing so could save it billions of dollars next year if it doesn't have to make debt payments tied to GDP.

http://online.wsj.com/article/BT-CO-20120719-714863.html
US has nothing like this..............
apparently they have yet to shed the shackles of owing private banks in currency other than its own..............?????
Never a good thing for a monetary soviergn.........

funny:

Not making a payment in 2013 would free up more money for President Cristina Fernandez to spend on social programs during a mid-term election year.

"Cristina doesn't want to pay the GDP warrant, so she'll show the economy is cooling and blame the global economy," said political analyst Sergio Berensztein of Poliarquia Consultores. "2013 is a year for satisfying voters, not bondholders."

oh darn..............................
http://in.reuters.com/article/2012/07/11/us-argentina-economy-data-idINBRE86A1CU20120711

They will "get there" faster than we will.. Oligarchs willing..............

[boriscleto]

soc sec and medicare payroll taxes.. "Poor" (near poor, almost poor, just shy of poor) ARE taxed.. one way or another..............

They also pay a disproportionate amount of their income in sales, excise, and property taxes.

[jeffkrol]

They also pay a disproportionate amount of their income in sales, excise, and property taxes.

winder is a bit myopic and likes to play semantic games.... Can't see the tax forest for the IRS trees...............
but in fairness............
http://online.wsj.com/article/BT-CO-20120703-707499.html

The odds of a recession in the university's May report rose to 99% from 98% in April. UTDT, as the university is known, noted the country has always entered recession within six months after recession odds exceeded 95%.

"The results of the latest surveys confirm that the Argentine economy will enter a recessive phase in the second half of the year," UTDT said in its report published Tuesday.

UTDT's leading indicator is conceptually similar to the Conference Board index in the U.S., which tries to predict turning points in the economy.

The indicator has forecast turning points in the economy for 18 years. On average, it has anticipated recessions 4.33 months in advance and growth periods 2.66 months in advance.

Argentina's economy is expected to expand at a much slower pace this year due to high inflation, soft demand for Argentine goods in Brazil and a sluggish global economy.

After 8.9% growth in 2011, the government is expected to report economic growth of 4.1% this year, according to the median estimate of more than 50 banks, economic research firms and universities surveyed by the Central Bank of Argentina.

What is our growth????

Again............
http://www.fair.org/index.php?page=4573

Argentina has been declared a economic rogue many times over, beginning in 2002 when it refused to continue under an IMF austerity regime and purposely defaulted on its debt. For its temerity, IMF official Anne Krueger reportedly dubbed Argentina “the ‘A’ word” (International Herald Tribune, 9/23/05).

Corporate media reporting on Argentina takes its cues from U.S. and global economic elites, whose remarks about Argentina’s economy are routinely critical.

In 2009, then–CIA director Leon Panetta enraged Argentine officials when he suggested that their economy might be unstable (BBC News, 2/27/09). The same year, CATO senior economist Daniel Mitchell attacked U.S. economic policy by equating it to “reckless” Argentina (Washington Times, 5/28/09): “The U.S. has become the Argentina of the industrialized world, with our reckless monetary policy and irresponsible fiscal policy.”

The U.S. should be so lucky.

Since defaulting on its debt in 2002 and extracting itself from an economic regime dictated by the International Monetary Fund (IMF), Argentina’s economy has grown more rapidly than any in the Western Hemisphere (Guardian, 10/23/11). While developing countries are expected to grow more rapidly than developed ones, the gap between Argentine growth since 2002 (a 7.4 percent per year average) is still impressive next to the U.S.’s almost flat 1.7 percent per annum growth rate (IMF World Economic Outlook Database, 4/12). (Some private estimates, such as those of Orlando J. Fererres & Asociados, put Argentina's average annual growth over this period at about 1 percentage point less than the government/IMF data.)

And while Argentina has its share of economic issues—a persistent problem with inflation, to name one—this year the IMF estimates the country’s unemployment rate will fall to 6.7 percent, its lowest point since 1992.

Last year, economics blogger Yves Smith (Naked Capitalism, 10/23/11) noted how Argentina gets little credit in the U.S. media: “Ever notice nothing is ever said in the mainstream media about Argentina’s economy, save that it had a big default?” She pointed out that the country’s economy had grown “nearly twice as fast” as Brazil’s—which is often cited as a positive model in U.S. media—while increasing social spending “from 10.3 percent of GDP to 14.2 percent of GDP,” and decreasing inequality: “Poverty and extreme poverty have fallen by roughly two-thirds.”

The lesson here is that how well you do by your people has little value next to how well you do by bankers. Never mind that its economy has outperformed its better-behaved neighbors; Argentina is a bad example because it flouts international financial interests.

http://www.nakedcapitalism.com/2011/10/the-verboten-story-of-argentinas-economic-success.html

The one blot on Argentina’s success record is its inflation rate, which has been as high as 31%. I’ve had Brazilian readers contend that inflation is not as terrible as we Americans have been led to believe if you have good inflation accounting (something we never developed). Unlike our experience with stagflation, it has not been an impediment to growth:

Inflation may be too high in Argentina, but it is real growth and income distribution that matter with regard to the well-being of the vast majority of the population. By these measures, as we have seen above, the government appears to have made the correct decision not to fight inflation by sacrificing economic growth. . To take one important historical example, South Korea registered annual rates of inflation similar to those of Argentina in recent years, in the 1970s and early 80s, while it traversed the journey from a poor to a high income country.

The paper closes by stressing the implications for other debt-burdened nations:

Argentina’s experience calls into question the popular myth, as noted above, that recessions caused by financial crises must involve a slow and painful recovery. Argentina’s financial crisis and collapse were as severe as that of almost any country in recent decades; and yet it took only one quarter after the default to embark on a rapid and sustained recovery. This is not only because of the devaluation and improved macroeconomic policies, but because the default freed the country from having to be continually hamstrung by a crippling debt burden and by pro-cyclical policies imposed by creditors. It is these types of policies, along with the ultra-conservatism of central banks like the present ECB, that mostly account for the historical experience of delayed recoveries after financial crises. The Argentine government has shown that this bleak scenario is just one possible outcome, and that a rapid recovery in output, employment, poverty reduction, and reduced inequality is another very feasible path that can be chosen.

No wonder the IMF and the banksters don’t want Argentina to get good press. The Eurozone countries they are wringing dry might get ideas

.
Read more at http://www.nakedcapitalism.com/2011/10/the-verboten-story-of-argentinas-econ...bU8FsUzKfIu.99

---

Last edited by jeffkrol; 07-24-2012 at 10:57 AM.

[jeffkrol]

curious............
Philip Pilkington: Market Monetarism Or An Attempt to Speed Up the Decline in Real Wages

Now, if we follow Roberts and assume that the labour market is being increasingly squeezed we can easily guess where all that extra demand is coming from. It is, of course, coming from two channels – the only two possible channels given the current macroeconomic picture of the US – that is: the government deficit and capitalist consumption (which can be read as: consumption out of previous profits). Of the two of these government deficits are by far the most important.

Indeed, James Montier from GMO [] has crunched the numbers and turned out evidence that confirms exactly what we would intuitively expect – namely that government deficits are the main drivers of profits in the post-2008 world:

And its not WHAT you spend.. but what you spend it on..........

What does all this mean? Well, it seems that although fiscal deficits by the US government are indeed propping up the economy and ensuring that those that have jobs can continue to remain employed, they are also covering up growing macroeconomic structural imbalances. Because there are such wide deficits and because these support corporate profits, companies have been able to suppress real wage growth and this has not significantly affected demand for their goods and services.

So, if the market monetarists had their way and provoked added inflation in the economy it is clear that this would not necessarily result in real wage growth to match said inflation. The labour market is extremely slack at the moment and, as Roberts has shown above, employers are using this opportunity to supress real wages below trend. If a burst of inflation shot through the system there seems no reason to assume that real wages could keep pace. Much more likely that they would fail to rise and living standards would fall. And as people needed to use more of their income to buy fewer, higher-priced goods and services this would also lead to lower economy-wide demand.

Indeed, such a policy might, if pursued with gusto, lead to a stagflation scenario where workers suffered unemployment on the one hand and falling living standards on the other. What a mess that would be… and, it should be said for those New Keynesians who tie their flag to this mast (you know who you are), it would make it all the more difficult to clear this disaster up with fiscal stimulus and other sensible policy measures as this might feed into the artificially generated inflation.

As we said though, it is unlikely that the market monetarists’ policies will be able to generate inflation even if they are implemented. The last time monetarist cranks got into power their policies were used to mask political aspirations that the general public would not have otherwise accepted. This time around, if the central bank chooses NGDP targeting as its new shaman’s stick – since the QE-wand has by now gone completely and comically floppy – they will likely just fall flat on their face. Where once monetarism was a grim mask worn by a disingenuous reaper intent on mass destruction, today it appears as nothing more than a cockscomb worn by an insecure fool trying desperately to convince the financial markets of his continuing relevance.

Read more at Philip Pilkington: Market Monetarism Or An Attempt to Speed Up the Decline in Real Wages

Read more at Philip Pilkington: Market Monetarism Or An Attempt to Speed Up the Decline in Real Wages

http://seekingalpha.com/instablog/2914431-bubbles-and-busts/849991-australia...nesian-failure
"People" (not banks or bond holders) need more income.................. regardless of the source

The US experienced a great-run of economic growth on the back of a staggering rise in private debt that ultimately caused the subsequent crash and stagnation. Australia appears to have built its remarkable run on the same principles and will soon find out if the optimism was equally misplaced. Market Monetarists are claiming Australia a success, while the Post-Keynesians are warning of impending trouble. My bet is on Steve Keen and the Post-K's. Where's yours?

http://www.debtdeflation.com/blogs/2012/06/15/submission-to-the-senate-econo...nking-inquiry/
so much for Nobels......

Perhaps the most striking feature of the Global Financial Crisis (GFC) was the confidence that all leading economists, official economic advisors and forecasters had in the state of both economic theory and the global economy immediately prior to the crisis.

The then President of the American Economic Association, Nobel Laureate Robert Lucas, was confident that the economy would never again suffer from a crisis like the Great Depression, because modern macroeconomic knowledge knew how to prevent such calamities:

bwahahahahahaha

Manifesto
Preamble

Click here for this post in PDF

The fundamental cause of the economic and financial crisis that began in late 2007 was lending by the finance sector that primarily financed speculation rather than investment. The private debt bubble this caused is unprecedented, probably in human history and certainly in the last century (see Figure 1). Its unwinding now is the primary cause of the sustained slump in economic growth. The recent growth in sovereign debt is a symptom of this underlying crisis, not the cause, and the current political obsession with reducing sovereign debt will exacerbate the root problem of private sector deleveraging.

A Modern Jubilee

Michael Hudson’s simple phrase that “Debts that can’t be repaid, won’t be repaid” sums up the economic dilemma of our times. This does not involve sanctioning “moral hazard”, since the real moral hazard was in the behaviour of the finance sector in creating this debt in the first place. Most of this debt should never have been created, since all it did was fund disguised Ponzi Schemes that inflated asset values without adding to society’s productivity. Here the irresponsibility—and Moral Hazard—clearly lay with the lenders rather than the borrowers.

The only real question we face is not whether we should or should not repay this debt, but how are we going to go about not repaying it?

The standard means of reducing debt—personal and corporate bankruptcies for some, slow repayment of debt in depressed economic conditions for others—could have us mired in deleveraging for one and a half decades, given its current rate (see Figure 12).

A Modern Jubilee would create fiat money in the same way as with Quantitative Easing, but would direct that money to the bank accounts of the public with the requirement that the first use of this money would be to reduce debt. Debtors whose debt exceeded their injection would have their debt reduced but not eliminated, while at the other extreme, recipients with no debt would receive a cash injection into their deposit accounts.

The broad effects of a Modern Jubilee would be:

Debtors would have their debt level reduced;
Non-debtors would receive a cash injection;
The value of bank assets would remain constant, but the distribution would alter with debt-instruments declining in value and cash assets rising;
Bank income would fall, since debt is an income-earning asset for a bank while cash reserves are not;
The income flows to asset-backed securities would fall, since a substantial proportion of the debt backing such securities would be paid off; and
Members of the public (both individuals and corporations) who owned asset-backed-securities would have increased cash holdings out of which they could spend in lieu of the income stream from ABS’s on which they were previously dependent.

Clearly there are numerous complex issues to be considered in such a policy: the scale of money creation needed to have a significant positive impact (without excessive negative effects—there will obviously be such effects, but their importance should be judged against the alternative of continued deleveraging); the mechanics of the money creation process itself (which could replicate those of Quantitative Easing, but may also require changes to the legal prohibition of Reserve Banks from buying government bonds directly from the Treasury); the basis on which the funds would be distributed to the public; managing bank liquidity problems (since though banks would not be made insolvent by such a policy, they would suffer significant drops in their income streams); and ensuring that the program did not simply start another asset bubble.

http://www.debtdeflation.com/blogs/manifesto/

Kind of sounds related to my "mortgage thingy"....................
Too bad he's Australian.. nobody here will pay a lick of attention............

[jeffkrol]

Biography

Steve Keen is Professor of Economics & Finance at the University of Western Sydney, and author of the popular book Debunking Economics, a second edition of which has just been published (Zed Books UK, 2011; Debunking Economics - Coming Soon).

Steve predicted the financial crisis as long ago as December 2005, and warned that back in 1995 that a period of apparent stability could merely be “the calm before the storm”. His leading role as one of the tiny minority of economists to both foresee the crisis and warn of it was recognised by his peers when he received the Revere Award from the Real World Economics Review for being the economist who most cogently warned of the crisis, and whose work is most likely to prevent future crises.

He has over 60 academic publications on topics as diverse as financial instability, the money creation process, mathematical flaws in the conventional model of supply and demand, flaws in Marxian economics, the application of physics to economics, Islamic finance, and the role of chaos and complexity theory in economics. His work has been translated into Chinese, German and Russian.

In Debunking Economics, Steve let the general public in on a little-known secret: that many widely believed economic models have been shown by economists to be wrong—hence the subtitle to his book, “the naked emperor of the social sciences”.

http://my.firedoglake.com/papau/2011/11/24/australian-economist-steve-keen-o...out-of-crisis/
Just because I can..............
your buddy:
http://mikenormaneconomics.blogspot.com/2012/01/steve-keen-mmt-convergence.html
http://www.angrybearblog.com/2012/01/most-important-econoblog-post-this-year.html

Chartalism rejects neoclassical economics, as I do. However it takes a very different approach to analyzing the monetary system, putting the emphasis upon government money creation whereas I focus upon private credit creation. It is therefore in one sense a rival approach to the “Circuitist” School which I see myself as part of. But it could also be that both groups are right, as in the parable of the blind men and the elephant: we’ve got hold of the same animal, but since one of us has a leg and the other a trunk, we think we’re holding on to vastly different creatures.

That said, I do have numerous issues with the Chartalist approach, but I haven’t studied its literature closely enough yet to write a critique. [3] I also could have distorted their arguments if I had attempted a summary of their views. So what I decided instead to do is to ask a leading Chartalist, Professor Bill Mitchell from the University of Newcastle, to write a précis of the Chartalist argument (Bill also has a blog on this approach to economics).

This précis follows. I emphasise in closing my own comments that, if there is a genuine recovery not involving rising private debt to GDP levels, then Chartalism is the only theory left standing. Neoclassical economics is dead.

http://www.debtdeflation.com/blogs/2009/09/27/it%E2%80%99s-hard-being-a-bear...native-theory/

found this really funny............

Here we have Lucas saying how fabulously the EMH/CAPM fitted the data, while the guy he cites as his source abandoned it five years earlier on the basis that it didn’t fit the data! Anyone without access to the academic literature might think that this distinguished economist knew what he was talking about. And pigs might fly…

I return to my remarks about economists on ABC TV recently–that they should be paid less than plumbers (OK, excepting me and my Post Keynesian buddies, but for us being paid like plumbers would be a pay rise).

Sorry for the excessive blood pressure here guys, but I’m now down in Adelaide for the 38th Australian Economists Conference, and I face spending three days surrounded by neoclassical economists…

[jeffkrol]

Robert Schiller..................

The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. He calls for an aggressive response--a restructuring of the institutional foundations of the financial system that will not only allow people once again to buy and sell homes with confidence, but will create the conditions for greater prosperity in America and throughout the deeply interconnected world economy.

Shiller blames the subprime crisis on the irrational exuberance that drove the economy's two most recent bubbles--in stocks in the 1990s and in housing between 2000 and 2007. He shows how these bubbles led to the dangerous overextension of credit now resulting in foreclosures, bankruptcies, and write-offs, as well as a global credit crunch. To restore confidence in the markets, Shiller argues, bailouts are needed in the short run. But he insists that these bailouts must be targeted at low-income victims of subprime deals. In the longer term, the subprime solution will require leaders to revamp the financial framework by deploying an ambitious package of initiatives to inhibit the formation of bubbles and limit risks, including better financial information; simplified legal contracts and regulations; expanded markets for managing risks; home equity insurance policies; income-linked home loans; and new measures to protect consumers against hidden inflationary effects.

This powerful book is essential reading for anyone who wants to understand how we got into the subprime mess--and how we can get out.

Shiller, R.: The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It.

From Keen:

Robert Shiller’s excellent empirical analysis. Robert coined the phrase “irrational exuberance” that was later made famous by a speech by Alan Greenspan–who unfortunately understood the issues there about as well as Donald Rumsfeld understood Iraq.

funny..

[boriscleto]

Republicans Actually Floating Platform of Lowering Taxes on Superrich, Raising Them on Lower Incomes | AlterNet

Senate Republicans will press this week to extend tax cuts for affluent families scheduled to expire Jan. 1, but the same Republican tax plan would allow a series of tax cuts for the working poor and the middle class to end next year.

[jeffkrol]

Republicans Actually Floating Platform of Lowering Taxes on Superrich, Raising Them on Lower Incomes | AlterNet

As I said earlier (well not me but) there is no cure for stupid.................

[Winder]

After 8.9% growth in 2011, the government is expected to report economic growth of 4.1% this year, according to the median estimate of more than 50 banks, economic research firms and universities surveyed by the Central Bank of Argentina.

And where does this growth come from? Let's see. Inflation is 22% (up from 7%) which means the government is destroying the cost of labor (making it cheaper) which explains why the % living below the poverty line in 2010 was 13.9% and in 2011 it had more than doubled to 30%. Since it is next to impossible to get workers to accept a lower wage to make exports competitive, inflation is the next best thing to destroying the wages of the working class and increasing exports.

The Argentinian Central Bank is not exactly the best source for economic data. It is like getting numbers from China's central banks.... or just about any central bank...

Argentina has made it illegal to publish exchange rates with foreign currency or estimates of the inflation rate. They have made it illegal to move your money out of the country for safety. They have dogs at the air ports who have been trained to smell cash just like we do for drugs and bombs.

Argentina appeals to sniffer dogs to detect capital flight at border crossings — MercoPress

The idea that Argentina is on the right track is absurd. The country is heading back down the same path it did in 2001-2002.

[jeffkrol]

And where does this growth come from? Let's see. Inflation is 22% (up from 7%) which means the government is destroying the cost of labor (making it cheaper) which explains why the % living below the poverty line in 2010 was 13.9% and in 2011 it had more than doubled to 30%. Since it is next to impossible to get workers to accept a lower wage to make exports competitive, inflation is the next best thing to destroying the wages of the working class and increasing exports.

The Argentinian Central Bank is not exactly the best source for economic data. It is like getting numbers from China's central banks.... or just about any central bank...

Argentina has made it illegal to publish exchange rates with foreign currency or estimates of the inflation rate. They have made it illegal to move your money out of the country for safety. They have dogs at the air ports who have been trained to smell cash just like we do for drugs and bombs.

Argentina appeals to sniffer dogs to detect capital flight at border crossings — MercoPress

The idea that Argentina is on the right track is absurd. The country is heading back down the same path it did in 2001-2002.

well there trade policies (which has nothing to do w/ FIAT MONEY) may play a big part.. and think about this as you wail and gnash about the US debt.........

This is the first economic slowdown since the country emerged from a 2001-2002 crisis, other than a blip in 2009. The strengths of the boom are eroding, with the fiscal accounts in deficit, central bank reserves stagnant, the trade surplus shrinking and energy imports on the rise.

The response? Buy dollars.

https://mninews.deutsche-boerse.com/index.php/argentinas-plunging-peso-expos...g-economy-govt

Argentina decides it want to control it's own resources and "big money" is annoyed they are no longer in charge..
http://www.marketoracle.co.uk/Article35744.html

At least Argentina didn't fudge the whole universe...
http://www.marketoracle.co.uk/Article35581.html

but:

YPF Dividends Cut as Argentina Seeks Oil Output Boost
By Pablo Gonzalez - Jul 17, 2012 10:00 PM CT


YPF SA (YPFD) decreased dividend payments and raised investment as the company seized by Argentina’s government in April seeks to bolster oil production.

The South American country’s biggest oil producer allocated dividend payments of $66 million, or 5.7 percent of last year’s profit, according to a regulatory filing distributed after a shareholder meeting yesterday.

Argentina seized 51 percent of YPF from Spain’s Repsol SA as President Cristina Fernandez de Kirchner’s government seeks to halt declining oil output and stem fuel imports that doubled to $9.4 billion last year. The government opposed YPF dividends that exceeded 80 percent of profits.

Shareholders also expressed their opposition to “the previous administration characterized by falling oil and gas reserves, production and exploration,” the company said in the statement.

Chief Executive Officer Miguel Galuccio allocated $1.3 billion of earnings toward total planned investment in 2012 of $3.5 billion. Investment last year was $3.1 billion, according to a filing sent to the stock exchange in February.

YPF shares, unchanged at 85 pesos yesterday, have tumbled 49 percent in Buenos Aires trading this year.

[Winder]

well there trade policies (which has nothing to do w/ FIAT MONEY) may play a big part.. and think about this as you wail and gnash about the US debt.........

The trade policies do have a lot to do with fiat money. As they continue to devalue their currency and inflation rises foreign goods will become much more expensive and the citizens will see how bad inflation really is. Any company that trades with foreign companies will have direct access to the real economic data on exchange rates and inflation. This information is illegal in Argentina. By moving to control all major companies that trade internationally Argentina can disguise it real financial problems. The only way a government can actually control the value of its currency is in a totalitarian state. If the currency is free to trade then its real market value will be discovered. Fiat money and foreign trade are heavily intertwined. Look at China's money manipulation and its impact on trade.

https://mninews.deutsche-boerse.com/index.php/argentinas-plunging-peso-expos...g-economy-govt

Argentina decides it want to control it's own resources and "big money" is annoyed they are no longer in charge..
http://www.marketoracle.co.uk/Article35744.html
"This is the first economic slowdown since the country emerged from a 2001-2002 crisis"

So they made it 10 years.... What does that mean? How long is a typical cycle? The Juglar Cycle is 7-11 years. Which means Argentina is right on schedule. The K-wave cycle is 50-60 years.

Argentina may want to control (I assume you mean state control) it own resources, but that may not be a good thing for the Argentinian people. Having resources is good, but having people qualified to extract and process those resources is just as important. To use Venezuela as an example, petroleum production has fallen by 30% as qualified people have fled the country. Chavez also enjoyed the typical 10 year run and is now witnessing 30% inflation as he attempts to manipulate currency. Venezuela is another country that has banned access to all foreign currencies in an effort to keep control of its population. State owned power companies are rationing electricity and food production has fallen. Venezuela should be one of South America's richest nations given its relatively large energy reserves, but Chavez's economic policies have ran it into the ground.

[jeffkrol]

The trade policies do have a lot to do with fiat money. As they continue to devalue their currency and inflation rises foreign goods will become much more expensive and the citizens will see how bad inflation really is. Any company that trades with foreign companies will have direct access to the real economic data on exchange rates and inflation. This information is illegal in Argentina. By moving to control all major companies that trade internationally Argentina can disguise it real financial problems. The only way a government can actually control the value of its currency is in a totalitarian state. If the currency is free to trade then its real market value will be discovered. Fiat money and foreign trade are heavily intertwined. Look at China's money manipulation and its impact on trade.


So they made it 10 years.... What does that mean? How long is a typical cycle? The Juglar Cycle is 7-11 years. Which means Argentina is right on schedule. The K-wave cycle is 50-60 years.

Argentina may want to control (I assume you mean state control) it own resources, but that may not be a good thing for the Argentinian people. Having resources is good, but having people qualified to extract and process those resources is just as important. To use Venezuela as an example, petroleum production has fallen by 30% as qualified people have fled the country. Chavez also enjoyed the typical 10 year run and is now witnessing 30% inflation as he attempts to manipulate currency. Venezuela is another country that has banned access to all foreign currencies in an effort to keep control of its population. State owned power companies are rationing electricity and food production has fallen. Venezuela should be one of South America's richest nations given its relatively large energy reserves, but Chavez's economic policies have ran it into the ground.

Cycles=voodoo...........
And they are restricting imports.. nothing to w floating rates... let them float..no that part is a political not economic choice...
IF the Oligarchs reacting badly to the "govermentalization" of oil resources keep their progrom on, yes Argentina will have a tough time. (BMW's of cash leaving the country).

Time will tell .. the economic and propaganda war has just begun... it will be interesting to watch. I do know MMT had some suggestions for Argentina to fine tune but don't have ready access to it.

[jeffkrol]

SIDE NOTE:

Fighting Inflation, Ruining Economies - Jonathan Schlefer - Harvard Business Review

Nonetheless, in 1999, the European Union (EU) tried the same reckless strategy that had failed in Latin America — with an irrevocable twist. The EU hoped the euro would solidify political union, but southern Europe's real economic motive for abandoning its currencies was to stop inflation. The resulting crisis echoes those in Chile, Mexico, and Argentina. For years, optimistic foreign banks poured loans into southern Europe, where returns were high, and southern Europe went on an import binge. Then shocks — the 2008-2009 global crisis, the revelation that Greece had disguised its debt and deficit — sent foreign finance for the exits. To try to unwind its debt, Southern Europe could only eke out bridge loans from the EU, the IMF, and ECB. Their response was consistently bungling, late, and stingy.

The worst part is that southern European governments and banks operate on the euro. The trickle of official loans just keeps them teetering on the brink of default. They cannot engineer a currency crash to cut imports, raise exports, and begin to bail out.

Neither theory nor evidence suggests that a vibrant economy requires very low inflation. After Chile's 1982 crisis, the dictator Augusto Pinochet fired the Chicago boys and installed more pragmatic economists. They allowed moderate inflation of up to 20%, and Chile became the success story of Latin America. Germany conquered inflation at its own pace, perhaps a useful achievement. Peripheral Europe caught the allure of easily conquering inflation by abandoning national currencies and espousing a refashioned Deutsche Mark called the euro. Why, oh why?

The euro was largely an anti-inflationary gamble. The University of Chicago's Milton Friedman launched the modern anti-inflation movement with his presidential address to the American Economic Association in 1968. Contrary to what many economists then believed, Friedman argued that, higher inflation does not reduce unemployment, and that the best monetary policy was one that kept prices stable. As inflation rose in the 1970s — because of labor-union muscle, two powerful oil shocks, printing money, and other factors — this view gained adherents. Fed Chairman Paul Volcker clamped down on printing money in 1979 and squeezed out U.S. inflation, at the cost of the (then) worst recession since the 1930s.

In the 1970s "los Chicago boys," as Chileans dubbed the young University of Chicago economists enlisted to run their economy, added a new twist to Friedman. They pegged the exchange rate of the peso to the U.S. dollar. Chile would conquer inflation by effectively adopting the dollar. Mexico tried the same experiment in the early 1990s under President Carlos Salinas and his retinue of economics Ph.D.'s. Finance Minister Domingo Cavallo (himself a Harvard economics Ph.D.) tried it again in Argentina in the late 1990s. These experiments presaged Eurozone nations' abandonment of their currencies. Each ended in crisis.

found it:
Countries that might be good candidates for a policy mix based on dirigisme and a jobs guarantee program – that is, a simultaneous supply and demand side MMT policy mix – might include: any developing country experiencing high rates of inflation (Argentina, are you listening?);
Read more at http://www.nakedcapitalism.com/2012/04/philip-pilkington-mmt-functional-fina...EjyqTysaIEq.99

For now, I would simply ask the reader to be acutely aware that no statistic in this world is truly neutral – and, be they civil servants or private individuals, state news-channels or privately run magazines, every statistician and media outlet have their motivations and their ideologies.

Read more at http://www.nakedcapitalism.com/2012/05/philip-pilkington-democrats-vs-techno...rGiki5cJ8W0.99

This rings true as the Kirchner government appears to be extremely popular. In October 2011 Cristina Kirchner swept to power with a vote of 54.1% – 37.3% over her second rival. That makes Kirchner significantly more popular than she was four years previously when she received 45.3% of the vote – 22% over her nearest rival.

Now, if Kirchner has simply been hiding a zero-growth economy under cooked inflation statistics are we really to believe that she remains so popular among voters? Personally, I don’t find that story remotely credible. I also think that if the government are indeed massaging the data and still managing to get elected in a landslide they are doing something right.

The critics will call this success ‘populism’; but that term is loaded as, in common parlance, it means ‘left-wingers pandering to the masses’. (I could just as easily refer to the Irish Fianna Fail government’s pre-crisis policies as ‘populist’ – and I would be correct – but you would rarely have heard such a thing from their neoliberal champions; nor would it explain Fianna Fail’s success in those years). No, ‘populism’ cannot explain Kirchner’s popularity because, being a simple pejorative, it does not really amount to an analysis.

In fact, ‘populism’ is even more toxic than simply being a crude trope deployed by neoliberals against the Latin American emergence; it is a word that crystallises the dangerous distrust that many a technocratic neoliberal foster toward democratic republicanism. We are on far safer and more ethically sound ground if we assume that, rather than duping the masses, the Kirchner government is actually doing something right. Certainly if we compare it to the neoliberal technocrats that ruled in the 1990s our doubts will soon evaporate.

Read more at http://www.nakedcapitalism.com/2012/05/philip-pilkington-democrats-vs-techno...rGiki5cJ8W0.99

http://www.nakedcapitalism.com/2010/03/rob-parenteau-data-challenges-deficit...t-beliefs.html

[mikemike]

I found this online calculator: Tax Foundation's Tax Policy Calculator that lets you see the impact of various proposed policies on your personal situations. The depth of my family's fall over the "fiscal cliff" would be just north of $7000/year.