The Uncontrolled Government Spending in US It Could Cause a Recession

Lessons Americans Can Learn From Argentina’s Economic Collapse for SHTF in the United States

Argentina’s spectacular December 2001 economic crash and default were
the culmination of a debt-led development process that began in the late
1970s. Much has been written about the crisis and its causes, and many
interpretations have been put forth as to why it occurred. Despite
overwhelming empirical evidence to the contrary, the International
Monetary Fund (IMF) and the financial establishment still claim that the
root cause of Argentina’s crisis was the public sector’s inability to reduce
its deficit.
Other explanations have included the more esoteric “debt
intolerance” concept, or that the default itself was the cause of Argentina’s
2002 economic collapse. Technological Slavery:... Kaczynski PhD, Theodor... Best Price: $18.12 Buy New $13.96 (as of 09:52 UTC - Details)

This paper argues that none of these explanations hold up under scrutiny.
Rather, the December 2001 default and economic crisis were the logical
outcome of a massive debt accumulation process which resulted from two
main factors. First, the negative effects of policy prescriptions by the
international financial institutions (IFIs), particularly the IMF and the
World Bank (WB), enthusiastically implemented by Argentine officials. In
other words, US-trained Argentine officials and IFI staff acted like a team
in which there was a high degree of agreement on the economic policies to
be implemented. Second, a series of exogenous shocks which ranged from
US interest rate hikes to financial crises in Asia, Russia, and, finally, Brazil.
These shocks led to spiraling costs of public sector borrowing and to
massive capital flight as the system unraveled.

The combination of inconsistent macroeconomic policies and exogenous
shocks led to an economic collapse of historical proportions in December.

Argentina’s Debt Crisis

As America heads towards an economic collapse due to its crazy national debt and runaway spending, we can learn some great lessons about how to prepare for the SHTF (Sewage Hits The Fan) that is to come by looking at what happened to Argentina

In 2001, Argentina plunged from being a very wealthy country with a large middle class to a country where the middle class all but disappeared. It was all due to uncontrolled government spending. Since the situation is so similar to what we have here in the United States today, the lessons learned are especially pertinent. You’re Teaching ... Grossman M.D., Miriam Best Price: $15.85 Buy New $14.26 (as of 09:52 UTC - Details)

The first lesson to be learned from the economic collapse in Argentina is that desperate people will do desperate things. People took to the streets protesting what they saw as the robbery of the middle class by the banks and the betrayal of the politicians. Civil unrest became a common occurrence, as people who saw their bank accounts and retirement plans evaporate suddenly had nothing left to lose.

In addition, as the situation dragged on, more and more crime became commonplace. It wasn’t just robberies in bad neighborhoods, but more sophisticated burglaries in previously safe neighborhoods as well. People learned that their homes were being staked out and, when all the members of the family left and the house was vacant for a few hours, they could come home to a house that had been stripped.

In addition, a new term “express kidnappings” was coined. Instead of just kidnapping rich people where a huge ransom could be demanded, thugs started kidnapping people of more modest means and demanding only a couple hundred dollars. They would drive the around in a cab all day until a phone call to their home produced some sort of a payoff, and then they would move on to the next victim.

Express kidnappings were very smart financially for the bad guys, as the amount of money taken would not warrant a huge investigation from the overburdened police force. And if they knew what they were doing, they could pull off a couple of these every day.

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