June 30, 2010 4:44PM

How Come We Didn’t See This One Coming?

La Nación of Argentina reports today [in Spanish] that—shocker!—the Argentine government used funds from the nationalized pension funds to finance its current spending.

Let’s remember that over a year and a half ago, the administration of Cristina Fernández announced the nationalization of the private pension funds—$30 billion worth of assets—under the claim that the international financial crisis threatened to wash away the retirement savings of Argentine workers. However, it was clear from the beginning what the government’s real intentions were, especially since a surtax imposed on farmers had just been repealed by the courts and defeated in Congress.

Even Argentina’s populist hero, Juan Domingo Perón, warned 35 years earlier about a similar move from the government as Ian Vásquez pointed out in late 2008.