Miscellaneous News

Maikeru said:

And so it begins...

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Argentina’s new libertarian government will devalue the peso by about half, slash public spending and reduce energy and transport subsidies as it battles to contain an economic crisis and spiralling inflation.

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Federal budget transfers to the provinces would be cut to a minimum and all new public works projects halted, the minister said. “There is no more money,” he repeated.

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Caputo also announced a temporary rise in taxes on imports but promised to scrap the existing system of government permits for imports. Export taxes, which are hated by Argentina’s powerful farming lobby, will be removed once the economic emergency is over.

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To offset the impact of the cuts on the more than 40 per cent of Argentines living in poverty, Caputo said the value of the government-provided food card would rise by 50 per cent and child benefits would double. The budget for one of Argentina’s largest welfare programmes, Potenciar Trabajo, would be frozen at 2023 levels.

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other policy plans reported Tuesday night by local media — including the reversal of the previous government’s recent elimination of income tax — suggested the package would be “very pragmatic” and “[overall] positive.”

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gelgoog said:

It is going to be a massive wealth transfer from the poor to the rich in Argentina.
The rich took advantage of the previous IMF loan, which caused the current huge debt load, to convert their pesos to dollars and moved their money to banks in the US. They will just let the peso collapse, and then buy up things in Argentina on the cheap.

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gelgoog said:

You will see. This playbook has been done before. Always leads to massive layoffs, unemployment, misery and social strife.
You can devalue a currency without doing it in one go as well.

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Overbom said:

I don't think these are that bad except maybe the "temporary" tax import tax.

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Joe Biden says US will back Ukraine ‘as long as we can’​

Joe Biden pledged the US would continue to back Ukraine “as long as we can”, even as Republican leaders dashed hopes of a quick deal to provide funding to Kyiv despite personal pleas from Ukraine’s President Volodymyr Zelenskyy.

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“We’ll continue to supply Ukraine with critical weapons and equipment as long as we can . . . but without supplemental funding, we’re rapidly coming to an end of our ability to help Ukraine respond to the urgent operational demands that it has,” Biden said.

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Mike Johnson, the speaker of the House of Representative, said: “We needed clarity on what we’re doing in Ukraine, and how we’ll have proper oversight of the spending of precious taxpayer dollars of the American citizens. And we needed a transformative change at the border.” “Thus far, we’ve gotten neither,” he added.

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Mitch McConnell, the top Republican in the Senate, told reporters it would be “practically impossible” for any deal to pass Congress before the Christmas holiday, even though he said the meeting with Zelenskyy was “inspiring”.

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Earlier in the day, Jake Sullivan, the White House’s national security adviser, had warned of the consequences of a lapse in US funding for Ukraine, calling it a “remarkable strategic own-goal by us”. “It will mean a very specific deterioration in Ukraine’s capabilities to both hold territory and take territory, as well as to defend Ukrainian cities against an aerial assault by Russia,” he told a Wall Street Journal conference. “2024 will be a very difficult year, if we are not able to get the assistance to Ukraine.”

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gelgoog said:

Putin is just trying to keep the legacy of the man who put him in power in the first place. But Yeltsin's government's catastrophic governance only started to improve after Primakov was made Prime Minister.

By comparing what happened with the Russian and Chinese economies it is pretty easy to tell that shock therapy is basically a disaster. The Chinese economy started out from a much lower baseline yet did more gradual and limited in scope changes to the economy which simply worked better. Processes need to be more gradual and the state should always retain the commanding heights of the economy and natural monopolies. This is basically the same mixed market economy which the Western countries used in the post war period to great success.

Claimed "successes" of shock therapy like Poland after the Cold War happened because of several factors. The West forgave Poland's debt, and they got massive cash infusions both before and after they joined the European Union. But even then a lot of the population emigrated and much of the industrial sector collapsed.

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