Say No to Argentina
February 2, 2002
The new Argentine government, fresh from confiscating all the U.S. currency in the country, now wants the U.S. government and the International Monetary Fund to send in a fresh shipment of greenbacks. Will they, joined by Canada, go along with the scam?
Paul O'Neill, secretary of the U.S. Treasury, said yesterday he's ready to send more American and Canadian tax dollars into the chaos-ridden country. Canada's support would admittedly be small, since it would flow through the watery pools of aid managed by the International Monetary Fund. U.S. taxpayers could be in for a bigger hit.
According to Mr. O'Neill, Argentina "will need more money from the IMF and they will need our [U.S.] support which we want to give them, but they must take the lead in establishing a sustainable program and then we can help them." Mr. O'Neill's comments came before Argentine President Eduardo Duhalde outlined details of new economic measures last night.
Do those reform policies really go far enough to justify pumping more foreign loans and dollar aid into a policy system that has proven it cannot cope with economic reality?
The Argentina government has just pulled off one of the greatest bank robberies in modern history. Billions of U.S. currency reserves have been confiscated, the local peso has been devalued, accounts are frozen, property rights have been overthrown. Assets of foreign investors, not to mention those of native Argentines, have essentially been nationalized.
Johns Hopkins University economist Steve Hanke noted on this page earlier this week that U.S. law provides for cutting off assistance to foreign nations that break contracts or seize the property of U.S. citizens and corporations. Yesterday, the chairman of the Joint Economic Committee of Congress backed Mr. Hanke's position. Congressman Jim Saxton, citing U.S. law, said the U.S. government and the IMF should not support aid to a country that upsets property rights. The law, in fact, calls on the president to cut off aid if there's evidence the assets of U.S. citizens and corporations have been confiscated. Surely Argentina's government fits the description.
An editorial in the National Post on February 2, 2002.