Naomi Klein in Argentina

[Bradford DeLong]

>Brad wrote:
>
>>
>>If you have eight different provinces each printing money that 
>>circulates throughout the country, each province will print a hell 
>>of a lot of money--the real resources to pay the librarians, 
>>teachers, and other public sector workers come from reducing the 
>>value of money balances in the hands of the rest of Argentina's 
>>citizens, and so printing money is a way for each province to fund 
>>its spending by taxing others' citizens.
>>
>>Seems to me that what Naomi Klein is calling for is an immediate 
>>hyperinflation in Argentina. Does she know it?
>>
>>
>>Brad DeLong
>
>
>There are substantial real resources available to tax in order to 
>pay the public sector workers, make monthly payments to the 
>unemployed, and pay a monthly pension to all old people - including 
>those not covered now by the social security schemes.
>
>The total suspension of all foreign debt payments, and wealth 
>(asset) taxes on those who have sent capital abroad and the giant 
>corporations will be more than sufficient.
>
>john mage

That's not the way it is going. Peso down 75% against the dollar 
(when a decline of 25% would have brought Argentinian domestic prices 
back into line with world export opportunities) suggests that the 
people trading pesos for dollars are expecting Argentina's prices to 
triple in the near future. At the January-February rate of price 
increase Argentina is already up to an inflation rate of 50% per 
year--an inflation rate at which figuring out how to delay payment of 
your taxes becomes a game it's worth everyone's while to play, with 
very dangerous consequences for the government's finances...

I don't see what Duhalde plans to do. And if he doesn't have plans 
yet, they certainly aren't going to work...

Brad DeLong