Skip to comments.Britain is following Argentina on the road to ruin [sounds like the U.S.]
Posted on 10/02/2012 1:11:17 PM PDT by Cincinatus' Wife
A faltering economy, a coalition government torn between spending cuts and tax rises, a sinking currency, money printing and 'unconventional' monetary policy. Britain in 2012? No, Argentina in 2002.
The problems faced by Argentina a decade ago and by Britain are eerily similar. In each case the government believed that through its own sophistication and trickery it could defeat a debt crisis of its own devising. In Argentina, every government action served only to make the situation worse. We are following the same path.
....At each stage, Argentina's recovery was sabotaged by the actions of its own politicians, as can be seen in this report published by Jim Saxton, Vice Chairman of the Joint Economic Committee of Congress.
As is the case in Britain...,Argentina...recognised that it would need to reduce the gap between spending and tax recipts. As in Britain, the ruling coalition could not make significant tax cuts because it owed its majority to a minor party of the Left.
Instead, it raised taxes. Signs of a recovery were apparent in December 1999 when the government implemented the first of three packages of tax rises. It increased the top rate of income tax, the wealth tax, and consumption taxes on drinks, tobacco and cars. Two years later it introduced a financial transactions tax and a hiked the petrol tax.
....The effect of the Argentine tax increases was to amplify the recession. At the same time, the deficit expanded because state spending could not be tackled and tax take falls in a shrinking economy....
...It was government meddling in the Argentine banking system which contaminated the private sector and made credit impossible. Monetary policy motivated by a desire to please the bond markets made things worse. ....
(Excerpt) Read more at blogs.telegraph.co.uk ...
I don’t know about the UK, but the Argentina may be what the USA looks like in 10 years
Leftist politicians, pandering to and supported by the ever-growing mob, declining middle-class, capital controls, hyper-regulation, wealthy and big business in bed with the Gov’t by design and necessity, little respect for private property and individual rights, growing violence especially on the edges of cities.
Its all a matter of how far the likes of Obama take us.