As we all have learned in our lifetimes, the old adage is very true that we learned from our elders, “Those who don’t learn from history, … are Doomed to Repeat it.
There are many cases of the following, but here is a more current one that many of you may have forgotten:
Cry for Me, Argentina
In the early 20th century, Argentina was one of the richest countries in the world.
While Great Britain ‘s maritime power and its far-flung empire had propelled it to a dominant position among the world’s industrialized nations, only the United States challenged Argentina for the position of the world’s second-most powerful economy.
It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system.
Its level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.
In 1916, a new president was elected.
Hipólito Irigoyen had formed a party called The Radicals under the banner of “fundamental change” with an appeal to the middle class. (“Fundamental change”… now where have I heard that?)
With an increasing flow of funds into these entitlement programs, the government’s payouts soon became overly generous.
Before long its outlays surpassed the value of the taxpayers’ contributions.
Put simply, it quickly became under-funded, much like our Social Security and Medicare programs.
The death knell for the Argentine economy, however, came with the election of Juan Perón.
Perón had a fascist and corporatist upbringing; he and his charismatic wife aimed their populist rhetoric at the nation’s rich.
This targeted group “swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated.”
Under Perón, the size of government bureaucracies exploded through massive programs of social spending and by encouraging the growth of labor unions.
High taxes and economic mismanagement took their inevitable toll even after Perón had been driven from office. But his populist rhetoric and “contempt for economic realities” lived on. Argentina’s federal government continued to spend far beyond its means.
Hyperinflation exploded in 1989, the final stage of a process characterized by “industrial protectionism, redistribution of income based on increased wages, and growing state intervention in the economy…”
And by 1994, Argentina ‘s public pensions — the equivalent of Social Security — had imploded.
The payroll tax had increased from 5% to 26%, but it wasn’t enough. In addition, Argentina had implemented a value-added tax (VAT), new income taxes, a personal tax on wealth, and additional revenues based upon the sale of public enterprises.
These crushed the private sector, further damaging the economy.
By 2002, “…government fiscal irresponsibility… induced a national economic crisis as severe as “ America ‘s Great Depression.”
(But, we won’t let that happen again… will we?)
WE ARE ALLOWING OUR POLITICIANS TO REPEAT THE FAILURES OF HISTORY!
PS… while working America cuts back… Congress just increased government expenditures by 12% in the “Omnibus” spending bill of nearly half a TRILLION!
Last year there was ONE person in the Dept. of Transportation making over $170,000!
This year that Dept. has 1690 people making over $170,000!
Is your company, or ANY company, doing that well?
AND, this bill has 5224 earmarks totaling $4,000,000,000!
The U.S. unfunded mandates including Social Security, Medicare, Medicaid and the National Debt exceed 100+ TRILLION DOLLARS.