Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.
INFOBAE – In a 1993 science fiction film Bill Murray plays Phil Connors, a cynical and arrogant Pittsburgh television meteorologist who travels to cover the annual Groundhog Day event in the small town of Punxsutawney, Pennsylvania. But a snow storm prevents him from returning and he must stay overnight in the small town. The next morning he discovers he is caught in a loop of space and time, repeating the same day over and over. Phil goes through different stages, hedonism, the search for love, he even decides to commit suicide repeatedly, until he finally begins to reflect on his life, his mistakes, what are his principles and the meaning of existence.
In a similar way, Argentina seems condemned to cyclically reiterate its crises, and some of its inhabitants are already beginning to fall into discouragement, and even despair or voluntary exile. And this time, it is going to be more serious than usual because it adds to the effect of the long quarantine that the president decreed, which these days is expected to be extended “until” June 7. GDP is likely to drop this year by 10-15% and inflation to accelerate in the second half. Most likely, by the end of the year we will arrive with a new jump out of poverty, and a crisis not only economic, but social and political. Perhaps, like Phil Connors, the time has come to review our attitudes and the way we think, or we will not manage to get out of the loop.
I propose to use a keyword that may be the key to unlocking the mess: “Neoliberalism.”
With great success the left and a large part of the Argentine ruling class find in the foreign debt a serious hindrance to the development of Argentina. He is also right when he criticizes the IMF as one of the fundamental pieces that allow us to continue with this cycle of repeated failures. But he is brutally wrong when he closes the analysis, attributing the origin of the problem to the bankers and the “neoliberal” governments. By reiterating the wrong diagnosis, we are doomed to repeat the cycle.
“Neo” means new, and liberalism is the political, economic and social doctrine, which defends the freedom of the individual and a minimal intervention of the state in social and economic life. Historically, liberalism has always been contrary to public debt due to an old principle that was established in the Magna Carta of England, in 1215, and which later came to be summarized in the slogan of the American colonists during the 1776 revolution as: ” No taxation without representation ”. That is, taxes can only be established with the consensus of the citizens represented in Parliament. For this principle, public debt is condemned by liberalism because it must be paid with taxes to our children or grandchildren. Above all, any debt that is not intended for an investment that generates a flow of funds that allows it to pay itself, such as that used for current expenses, is condemned. Alberto Benegas Lynch (h) often reminds us that this principle was deeply rooted in the fathers of liberalism, like Thomas Jefferson who, when he received a brand new copy of the US Constitution, expressed that “if he could have introduced an addition, it would have been the government’s prohibition contracting public debt, because that affects the assets of future generations who have not participated in the election of the ruler who contracted the debt. “
It is evident that the origin of public debt is always due to the fact that the State spends more than its income, incurring a fiscal deficit. Faced with this, “neoliberalism” maintains the old principle. For example, in the first article of the Washington Consensus calls for fiscal discipline and avoiding the fiscal deficit, which is the same as avoiding the growth of public debt. This is where the thinking of the left, or what we can call “neo-Keynesians”, enters cognitive dissonance: they understand that excessive debt is a problem, but they criticize austerity or cutting public spending to reduce the deficit.
On the other hand, George Gilder explains with clarity that the origin of public debt predates even the fiscal deficit, and associates it directly with the increase in public spending; because, from a certain point, it is impossible to finance it with tax increases. Argentina is a good example where public spending has very low productivity and the formal private sector is so small, in proportion, that it is impossible to finance it, even if they ruthlessly fleece the most productive ones, such as the agricultural sector.
It is worth saying that even if the Government achieves an agreement with external creditors, even though it would be called restructuring in that case (instead of default), those who believed in Argentina once again will have lost a lot of money. And, anyway, the country has already gone into default with the bonds of national legislation that were compulsively restructured.
If we replace the term “neoliberal crisis” with that of “neo-Keynesian crisis”, perhaps we can learn from our mistakes and, like Phil Connors, not only get out of the loop, but be wiser and more tolerant.
