For much recent history, the sprawling South American country of Argentina was wealthy with a high standard of living for most of its residents. For example, its beef exports were world famous, and the land is blessed with many natural resources. In fact, the name of the country comes from argentum, the Latin word for silver. In recent years, unfortunatly however, Argentina has fallen on hard times.
As reported recently in The Epoch Times, the quandry is summarized in the article’s title: “Argentina’s Government Collapsing; People Refuse to Work Amid Major Subsidy Cuts.”
While we Americans struggle with the highest inflation since the 1970’s, inflation in Argentina hit 58% in May and 60% in July 2022. For comparison, their inflation was 14% as recently as 2015.
Harry Lorenzo, chief financial officer (CFO) of Income Based Research, told The Epoch Times that out of control government spending is driving the collapse.
“The Argentine government has been grappling with a collapsing economy for some time now. The main reason for this is the governent’s unsustainable spending, which has been funded in part by generous welfare programs.”
Alvaro Gomez, a taxi driver, has lived and worked in the Argentine capital of Buenos Aires for about 15 years and speaking of protestors told The Epoch Times: “This is madness. What [the protestors] are asking for is madness. I’ve seen five presidents come and go in that time; nothing has improved. Half of our country doesn’t want a job, and the ones that do, don’t want to pay the taxes for the others.”
In short, as the government is running out of money, they are unable to pay many salaries, and those unpaid workers are thus refusing to show up at work, and much of the country is slowly grinding to a halt.
Morever, the government is trying to rein-in its expensive social welfare programs. One angry female protestor opposing the government’s spending cuts fumed: “The government expects us to work from 8 am to 5 pm for the same amount of money [as one gets from social welfare programs].” When a reported asked how she had been getting money up until now, she replied “the government.”
A male protestor added: “[Vice President] Chrisina [Kirchner] told us we have to go to work instead of receiving social benefits. Going to work, that’s the policy of a right-winger.”
So there you have it. As President Biden recently excoriated conservatives as being a threat to the US, that protestor in Argentina explains that a “right-winger” is any wacko who has crazy ideas like “go to work.”
No wonder Argentina is in trouble.
How does this relate to us here in the US? There are a few take-aways.
- History (and current events) show us that previously-prosperous nations can slide into poverty. In other words, wealth and a high standard of living are not guaranteed.
- Runaway inflation debases a currency and undermines and entire economy and nation.
- When a government has massive programs to pay people to not work, we should not be surprised when people do not want to work! For example, I recently went to a fast food restaurant in Southeast Roanoke. There were three to four cars in the drive-through, so I decided to order inside. A couple were in line ahead of me. Despite only two people being in front of me, we all had to wait for awhile. There were only three employees present, taking care of all dine-in and drive-through customers. Two appeared to be in their 50’s or 60’s; one, a woman, walked rather slowly and it appeared to be with considerable difficulty. My heart went out to her, as she seemed to work with great exertion, and I think of the people maybe half or even one-third her age who are not in the labor force. The third employee was maybe around 30. Notably, no workers were teenagers or in their early 20’s, the demographic that often forms the backbone of fast food employees. The younger fellow was apologizing to the couple in front of me, which I overheard. He said, “We just can’t get anybody to work. We hired a new guy the other day but he just sat in the back on his phone and wouldn’t come out. I told him, ‘come on, I’m not getting paid enough to be here either, but you gotta do something,’ and the guy never came back.” We then thanked our server for being responsible and showing up to work, so we could at least get our order. When people don’t work, the production of goods and services slows down, and everyone suffers.
- Governments and their policies matter, for good or ill. As I write this on Labor Day 2022, the US national debt is an unprecedented and outrageous US$30.87 trillion! Sadly, both parties have contributed to this disgrace, but under President Biden, the spending has gone into overdrive. That is part of what is turbo-charging our inflation and the so-called “college debt forgiveness” and dishonestly-named “Inflation Reduction Act” will probably make inflation worse. Moreover, paying people to stay at home and not to work creates a whole class of people who feel entitled.
Rather than learn things the hard way, can we learn from Argentina’s example and avoid that collapse?
–Scott Dreyer
