Hacker News Reader

Hacker News

Comment by diego_moita | Hacker News Reader

Full thread

diego_moita

Paraphrasing the title of a classic on Latin American literature: "Chronicle of a Foretold Death".

Argentina did this before, in the 90's with disastrous consequences. Just google for Domingo Cavallo and Carlos Menem.

Milei wants to do what was done before and get different results.

View on HN

The 90s failed mostly because of corruption and failure to reduce public spending though.

I don't know why you're being downvoted. This is exactly why it failed. They switched to dollars without getting public spending under control. People were spending their money on imports, which means the central bank was bleeding money at a constant rate. It could have worked if they either implemented austerity policies or clamped down on imports, but they did neither. It was completely unsustainable long-term, and they knew it.

Not to mention all the gov owned companies that were sold, but they sold them undervalued and they were sold debt free. So the state paid for the debt and didn’t get enough money to cover it. The whole thing was corruption on top of corruption

Brazil had the same inflation problems and adopted a plan very similar to Cavallo's plan. Brazil also had a lot of corruption and trouble reducing public spending, but came out of it comparatively better. Ultimately, the crux of the 90's failure was the obsession with the dollar running top to bottom in society (caused mainly by the politicians misleading the people about the viability of the peg) and the refusal to de-peg when it was the obvious way ahead. And off we go again...

The 90s were great for Argentina. Cavallo managed to fix Alfonsin's hiperinflationary legacy.

The 90s had a 25% unemployment rate, a wave of suicides from people's businesses failing and no safety net, and an actual, honest-to-God hungry middle class that couldn't afford to eat.

The only way you can say this is if you weren't alive to see it.

Reply on news.ycombinator.com