Argentina    
Riches to Rags 

   Campaign proposals by our 2020 candidates sound much like the big government, socialist approach that ruined a good thing in South America. 
(See Tuesday's blog.)

   When the money dried up, it was hard politically to cut back on spending.  Argentina repeatedly borrowed and sometimes defaulted. 

   By the end of Peron's rule (death in 1974), currency printing presses were busy. Inflation hit triple digits in 1975 and 5,000 percent in 1989. Per capita income dropped by 25 percent from 1975 to 1990. 

   Over several years, some 9,000 Argentinians "disappeared." 

   People shopping at supermarkets might hear loudspeakers announcing price increases up to 20 percent from the time they entered a checkout line until they reached the cashier. 

   In 1992, a new government sought frugality, privatization and deregulation. The economy grew for five years at the fastest rate in Latin America, and inflation dropped to 4 percent per year. 

   Unfortunately, privatized enterprises cut unnecessary workers by up to 40 percent.

   A Peron-type movement in 2007 expanded government control once again. By 2015, government spending exceeded 40 percent of GDP and the value of the peso fell from $1 to 8 cents, and today, about 2 cents. 

   Christina Kirchner, unable to serve more than two terms as president, is now vice president. (There's an idea for Barack Obama.) 
 

   Adam Smith wrote, 

"The baker serves others by selling them bread.

The income helps him feed, clothe and educate his children.

Economies break down when the powerful grab bread

without paying, and others stop baking or never learn to bake."

   Donald Trump, who donates his paychecks, is a disciple of Adam Smith.

       Jimmy