Argentina’s socialism experiment yields uncertain economy



My wife and I just got home from a winter vacation in Argentina. It was a great trip. I learned more about the southern hemisphere than I thought I ever would.

We went fishing for a week in the largest swamp in the world and toured four of Argentina’s largest cities. Oscar was our guide through the wine country of Mendoza. We were together long enough to discover that we had much in common and became friends.

Oscar was well versed in the geography, politics and history of his country. He related that following World War II, Argentina was an economic powerhouse with the eighth largest GNP in the world.

Since then it has declined and currently struggles through cycles of bankruptcy and recovery. Oscar asked me what I thought caused the change in economic fortune.

I thought about his question for several hours before I shared my conclusion that the decline was caused by socialism.

When Juan Peron came to power, he made sweeping changes in economic policy. He instituted a minimum wage, shortened the work week and established entitlement programs for the poor and unemployed. Argentina was one of the first nations in the world to provide universal health care at no cost to the patient. Free public education includes a four-year college degree.

These programs were, and still are, widely popular but someone has to pay for them. The tax burden on industry and entrepreneurs forced many businesses to close while others moved out of the country.

After 25 years of socialism, with the economy teetering on collapse, the military took control and tried to initiate reform, but it was too late. The economy imploded in the early 1980s.

The government borrowed heavily in an attempt to find its way out of the hole. By 2002, they were unable to make loan payments and declared national bankruptcy; the largest default in history.

Contrary to what Bernie Sanders would have us believe, socialism doesn’t work. It didn’t work in Argentina and it won’t work in America.

Free programs are not free. To say that the government pays for them is ludicrous. The government doesn’t generate money. It takes dollars from those who are successful and redirects them to others. Redistribution of wealth is a negative incentive for those who take risks and contribute to our national economy. It is in our national interest for our businesses to succeed. Redistribution of wealth only makes success more difficult.

President Trump’s new tax plan recognizes this. He has made more than his share of mistakes, but the tax plan is not one of them.

It must be noted that no plans for economic recovery include elimination of any of the costly social programs, neither in Argentina nor the U.S. The conservatives now in control of Congress have never proposed elimination of any significant social welfare program. Never.

Once begun, these programs are permanent. Even in times of crises, no politician would dare to suggest that we cut Social Security payments or reduce aid to unwed mothers. If we keep adding social welfare programs and increasing debt, we will follow the same path that Argentina walked to economic oblivion.

Frank Watson is a retired Air Force Colonel and long-time resident of Eastern Washington. He has been a free-lance columnist for over 19 years.

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