2023-11-26 05:54:27
Sánchez has refused to congratulate the winner of the Argentine elections, Javier Milei, and Yolanda Diaz has stated that “the Argentine people feel fear and uncertainty.” Curious, because with Peronism there was not uncertainty and fear, but rather certainty and panic for those who have sunk the peso, created 140% inflation, 40% poverty, left the central bank with negative reserves and a sinking economy. The clearest demonstration that the left does not seek the well-being of the people or democracy or progress, but control, is its enthusiastic support for Peronism that has plunged Argentina into misery and runaway inflation, and its defense of all communist dictatorial regimes.
The monumental hole that Massa and Fernández have left for Javier Milei is difficult to replicate. Mauricio Macri himself explained that the inheritance received is “worse” than the one he received from Cristina Fernández de Kirchner. It is a demonstration of the evil that is Peronism, leaving the country ruined and with a ticking time bomb the next.
It is worth detailing the disaster left by Peronism: a primary fiscal deficit of 3% of GDP and a total deficit (interest included) that exceeds 5% of GDP. Furthermore, it is a structural deficit that cannot be reduced unless public spending is reduced, which already represents 40% of GDP and has doubled during the Kirchner era. Of the budget, up to 20% is difficult to know where it goes and political spending has been maintained with Alberto Fernández, while the “adjustment” he announced was made in more than half at the expense of pensions, according to the Argentine Institute of Analysis Fiscal
The Government debt exceeds 400,000 million dollars, a historical maximum, with the Country Risk above 2,400 basis points.
Massa and Fernández left a shortage of meat and gasoline in a country rich in oil and livestock, which again demonstrates what Milton Friedman said: “If socialism managed the desert, it would run out of sand.”
We cannot forget an annual inflation of 140%, completely out of control due to the extractive and confiscatory fiscal and monetary policy, and an increase in the monetary base of more than 493% in five years, according to the Central Bank of Argentina.
Nor can we forget the disaster of the central bank reserves. Peronism leaves a bankrupt central bank, with negative net reserves (-12 billion dollars) and a ticking time bomb in remunerated liabilities (Leliqs), which exceed 12% of GDP and represent much more monetary emission in the future and, with This, more inflation. All of this also leaves poverty in society greater than 40% of the population. And that Government with those policies is what the Spanish left defended and supported.
Sergio Massa, acknowledging defeat, said: “Tomorrow everything is the responsibility of the winner.” Well it’s not. Milei must now face this poisoned legacy with determination and courage. Macri, who suffered the error of gradualism, stated that there is no room for gradual measures, and he is right.
First, we must end the deficit. And that requires an adjustment that cuts political spending without destroying pensions, which is what Fernández did. Second, we must end the ridiculous trade deficit. Argentina must open to the world and export as it deserves. To do this, we must put an end to the stupid exchange rate trap, the 15 false exchange rates that the Government used to expropriate dollars from citizens and exporters with unfair and confiscatory rates. Taxes must be lowered in a country that has 165 taxes and the highest tax wedge in the region, in which small and medium-sized companies pay up to 100% of their sales. A confiscatory and predatory State. Bureaucratic obstacles, protectionist measures and political subsidies to groups close to Peronism must be eliminated. Investment must be attracted, guaranteeing legal security and a regulatory framework that is attractive and reliable, in which the specter of expropriations and institutional theft does not return.
Milei’s challenges are many and he will encounter opposition from those who want to turn Argentina into Venezuela again. For this reason, Milei will need the support and help of all free countries. So that Argentina can once again be a rich and prosperous nation, not a wasteland of Peronist clientelism. In Argentina there is plenty of socialism and a lack of freedom. Also in Spain. And another poisoned legacy of debt and structural imbalances is what Sánchez will leave to the next Executive. Thank goodness we don’t have our own currency and a central bank that issues money because, if not, today we would be like Argentina.
#inflation #poverty #central #bank #reserves #collapsed #economy