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Comment by megaman821 | Hacker News Reader

What else can leaders do? Take your medicine for 10 years and then things will be alright is never going to work out politically. All the things Argentina needs to do suck in the short term; stop taking giant loans, stop printing money, stop overly generous government programs, stop protectionism.

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You say taking your medicine will never work, but it has worked at least in some places. India was in an economic crisis in 1991 and needed an IMF bailout. That bailout was made under the condition that they “took their medicine”. They did, fundamentally changing their approach to everything related to the economy. And it worked. India has done pretty well since 1991.

I agree that many countries never fall out of the cycle of lurching from bailout to bailout, never implementing the needed reforms because they’re too painful. Pakistan, Egypt, Argentina and others, that’s the norm for countries in IMF programs. But there are success stories too.

The problem is that the current govt wasn't taking its medicine. It continued spending more, subsidizing everything and supressing the exchange rates ARS-USD.

I'm from Argentina, and I didn't want either of the final options, but I knew that choosing the continuity of the current govt would bring us closer and closer to what's happening in Venezuela

Let's see what happens. The big issue is government spending which causes the printing of more money which leads to inflation. Changing to the dollar will help but it's going to lead to many government programs ending and a lot of misery for many in the lower rung of the economy. It sounds like a good fix but eventually, we'll see people demonstrating against the government and asking for change. That will be the real test to see if they can really follow the reforms they voted for today. I suspect we'll be seeing a back tract to the same. I wish them luck.

> Changing to the dollar will help

I fail to see how that would work. Argentina doesn't have a lot of US$ reserves. In order to have currency circulating, they're going to have to get a lot more. How? By purchasing it with AR Pesos? But they won't have those either without a central bank.

Pegging goods directly to the dollar will help with inflation. People will earn relative to the dollar and price goods relative to the dollar not the peso so people will see the prices go up at a slower pace. Inflation is partly due to the anticipation of prices going up. It's a psychological fix. As time continues more dollars will get into the economy and the move to dollar will may be possible. It's a longer term solution. Also the central bank won't go away tomorrow if ever. The man is a president not a dictator so he still needs to deal with the rest of the government to get things done. He may want to get rid of the central bank but I doubt everyone will go with his ideas. It's only a possibility not a definite.

People think he will do all the changes on day one but it's going to be years if ever.

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