A new MESSIAH to SAVE ARGENTINA? – VisualPolitik EN

A new MESSIAH to SAVE ARGENTINA? – VisualPolitik EN

After the October 2019 elections, in which
Mauricio Macri ended his presidency with a gruelling defeat, Alberto Fernández was sworn
in as president on December 10th. And by his side, was Cristina Fernández de
Kirchner as Vice President. After four years where it looked like change
could be imminent, Argentina went back to square one. The new President now faces two challenges
that seem more complicated to achieve than winning the Paris Dakar rally with a Model
T Ford: Number one on the list is to try to get the
country out of the tough, tough crisis it’s going through. And second, to consolidate his power under
the shadow of his Vice President. Because, a new political war seems to be brooding
at the core of Kirchnerism. [Text: “Because of Argentina’s madness,
because of our madness we sometimes distance ourselves and then come together again knowing
there were no vital differences between us.”] And this brings up all sorts of questions. What were Fernández’s first measures after
he came to power? What steps does the new president plan on
taking to get Argentina out of the ditch? Will his plan help? What lies ahead for the gaucho country? Listen up. (A TAINTED LEGACY) Yes, I know this is something politicians
often promise but you can’t build a house by starting with the roof. [Text: “Many people asked me to declare
on the state in which I had found the country and I didn’t. I think it is more constructive to do it today.”] If we want to analyze the task that Fernández
has ahead, first we need to understand the country he was handed. And the truth is that the situation that the
new president has found himself in isn’t exactly a relaxing tropical cruise. Not at all. Alberto Fernández got handed one of the worst
scenarios that a politician can imagine. We’ve already talked about it in lots of
videos, which I’ll leave links for in the description. But here are three pieces of information to
summarize this apparent race towards the abyss: Firstly, in 2019 inflation closed at more
than 50%, this number is equivalent to more than 10 years of inflation in a normal country. Second, the Argentine economy is in recession,
one of the greatest economic recessions in the world, where some sectors have dropped
by a whopping 10%. Third, the US dollar, which had an exchange
rate of 42 pesos at the start of 2019, ended the year at almost 80 pesos in the free market. As you can see, a major, total and absolute
disaster. Because the so-called gradualism of previous
leader Macri was so gradual that some are still looking for it. The only thing he achieved was a colossal
debt pyramid. Because in the end gradualism basically consisted
of the following: Not cutting public spending and just making
small adjustments in order to attract more investments that would make the economy grow. With this strategy, the burden of public debt
on the GDP would be reduced over the years, but the debt amount itself would not be reduced. At the same time, any public deficits would
be bankrolled with more and more debt. And that’s exactly what happened: Public spending and debt went down in GDP
terms while the public sector continued to grow. As you can see in this graph, year after year
the public deficit just kept increasing. (CHART) The difference between income and expenses
was basically paid with debt, which created a huge debt balloon that finally burst, forcing
Argentina to once again go running to the International Monetary Fund. Basically, in the end, as many economic and
political analysts have argued, the great difference between Kirchnerism and Macrism
was more a matter of form than substance, because their policies were practically the
same. It seems that the party doesn’t make much
difference, all Argentine politicians seem to share the same motto: “More taxes, more spending, more controls”. Over and over again. And given the results… Well the truth is that knowing exactly what
they’re looking for isn’t really clear. (AUDIO: “If we take the resources destined
to what is called social spending we see that from 1983, when democracy returned, until
2018, the resources destined for so-called social expenditure increased by 10 percent
of the GDP and poverty kept growing or remained at very high levels.” Roberto Cachanosky) (CHART) You saw it with Macri, social spending reached
record numbers during the same period that poverty levels shot up. (December 2019: According to the Social Debt
Observatory of the Catholic University of Argentina, poverty in Argentina reached 40.8%
and is the highest of the decade. These indices imply that 16 million Argentines
live in poverty and 3.6 million in extreme poverty. INFOBAE) To give you a better idea, this country currently
has 8 million workers who pay taxes to support 20 million people who directly or indirectly
receive a check from the State, whether at the national, provincial or municipal level. Obviously, this isn’t feasible. But… let’s look at it another way: Who in
their right mind would invest a single dollar in a country with such conditions? That, my friends, is the question that the
new government is going to have to face. But, hold on, do you think I’m exaggerating? Well… check the analysis that the Taxpayers
Association prepared: in Argentina, more than half of the price of a car consists of taxes. Specifically, on average, 54.8% of the price
of a new car consists of taxes. More than 50%. (CHART) And this is just for cars that are half manufactured
and sold within Argentina, because if we talk about imported and high-end cars, the taxes
would rise even more… as well as the price. This is why, in Argentina, a high-end car
can cost up to three times more than it would in the United States and more than twice what
it costs in a European Union country – countries where car sales also have significant taxes. And that helps to explain why buying a late
model car in Argentina, like the ones found in any country in the developed world, isn’t
an option for everyone. But that’s not all. We can also illustrate the point by looking
at a typical shopping cart. According to the Argentine Institute of Fiscal
Analysis, more than 40, 40% of the price of the usual food and non-alcoholic beverages
that people buy consists of taxes. At this point the burning questions are: Faced with such a scenario, what measures
has Fernández taken? What strategy has he chosen? Listen up. [Text: “I ask you to remember the past so
we don’t repeat it. Because this is a different time.”] (THE NEW GOVERNMENT’S PATH) Given this situation; with Argentina drowning
in the third highest inflation rate in the world, with an economy that’s in free fall
and a huge national debt… What measures has Fernandez taken? Has he decided to end the deficit once and
for all? Has he decided to approve new incentives so
foreign companies will invest in the country? Well, not exactly. The new government has approved a very harsh
adjustment, perhaps more severe than expected. The problem is that this adjustment, once
again, doesn’t include the public sector. While the private sector is going to take
a considerable blow… No one will touch the public sector. No cuts to administrative expenses, or political
expenses, nor bureaucratic expenses. So, what does this adjustment really consist
of? Well… let’s take a look at the main measures: [Text: “Those of us who embrace the Peronist
cause have come to be the voice of those who have no voice. To give rights to those who have none.”] First of all, they’re raising taxes again. Rates are raised, withholding taxes on agricultural
exports are increased – this is a kind of export tax for a very important sector in
Argentina – and, most importantly, the non-taxable amounts on personal taxes won’t be updated. The latter, considering that the country has
an inflation rate of more than 50%, is something that amounts to a huge fiscal bite for taxpayers
with a lower income. But… let me explain this better. You see, in every country, taxes, especially
personal taxes, tend to have exemptions, so if you earn less than a certain amount you
don’t have to pay. Well, in Argentina not updating this “minimum”
considering the increases in inflation will come as a tough blow to many people. Imagine for example – and this is an example,
that a freelancer, a professional, has an exemption threshold of one million pesos,
so everything he or she earns above that amount is taxed. As inflation sits at more than 50%, imagine
that this professional’s income last year increased by 30%, to 1,300,000 pesos. This professional is actually poorer than
the previous year, because his or her income has increased less than the rate of inflation,
so they won’t be able to buy as much with the money. However, on top of that taxes need to be paid
on the 300 thousand pesos, as they exceed the exemption threshold … which means the
take home pay is even lower and buying power is weakened even more. Well, that’s exactly what is going to happen
in Argentina: higher tax rates and a non-updated minimum tax threshold mean more fiscal pressure. But it doesn’t end there. Another group that is really going to feel
the adjustment is retirees. Given the high inflation rates, the Macri
government established a kind of semi-annual adjustment, so that pensioners wouldn’t
lose so much purchasing power. Well, the new president has decided to freeze
that update for 180 days for all retirees who earn more than $250 per month. And, of course, given the enormous inflation
that exists in the country, this will mean a very significant loss in purchasing power. In other words, a harsh blow to the wallets
of retirees. And… that’s not the end of it. Personal property tax, which is something
like a wealth tax, has also been raised. And, hold on because in Argentina the law
considers everyone who has assets worth more than $30,000 to be rich. Thirty thousand dollars! That’s crazy. But perhaps, out of all the recent measures,
the most controversial one is the new policy regarding the dollar. Fernández’s government has imposed a 30%
surcharge for all people who want to save in dollars, or who simply want to buy products
or services abroad. This is known as the solidarity dollar. That way, even though the official exchange
rate is at around 60 pesos per dollar, if you want to buy dollars to travel abroad or
to import a camera, the exchange rate applied to the transaction will be over 80 pesos per
dollar. You want to travel, invest or buy things abroad…
then you have to pay for the privilege. That’s just the way things are. It’s quite terrible. As if this weren’t enough, the amount of
dollars that you can officially buy is capped at 200 dollars per person. So, if you want more than that, you’ll have
to exchange your money on the streets, in the black market. But… let’s take a moment to think about
all this. Even though in principle companies aren’t
affected, imagine a small Argentine professional who exports products worth ten thousand dollars. When this money enters the country, they will
exchange it at the official exchange rate, which is 600,000 pesos. Now assume that that same professional wants
to use that money to buy some equipment in, say, Germany, which costs another 10,000 dollars. Well, then he has a problem. When he goes to exchange his money back to
dollars, he’ll get the solidarity dollar exchange rate, which is 30% more expensive,
so his 600 thousand pesos will only get him 7,500 dollars. And not only that, if he wants to go ahead
with that transaction, his company will have to go to the black market because he won’t
be able to buy more than 200 dollars at the bank. So here’s the question, do you think this
is the best way to attract investment and grow businesses? It really doesn’t seem to bode well. It’s true that with these adjustments, the
government is sending a clear message to the international markets that Argentina wants
to pay, will pay its debts and therefore will be able to renew its credits and even obtain
more international financing. But the problem is that if it doesn’t touch
public spending and only punishes the private economy even more, Argentina runs the risk
of drowning completely. This is not an easy situation, that’s clear. But hey, maybe politicians could start the
adjustment by setting an example, right? Check out the calculation that Roberto Cachanosky
developed based on the 2019 budgets. Take a look. [Monthly cost per senator] Argentina: 188,000 euros per month
Spain: 17,540 euros per month Monthly cost per legislator Argentina: 53,727 euros per month
Spain: 21,700 euros per month Calculated on 23/12/2019 on the 2019 budget. 2019 average exchange rate: $ 56.46 per euro.] Anyway, that’s how things stand in Argentina. Alberto Fernández’s government has begun
his mandate with some harsh adjustments… adjustments that follow the Argentinian tradition. Could it be that Argentine politicians don’t
know any better? In VisualPolitik we’ll be keeping an eye
on how events unfold. So I really hope you enjoyed this video, please
hit like if you did, and don’t forget to subscribe for brand new videos. Don’t forget to check out our friends at
the Reconsider Media Podcast – they provided the vocals in this episode that were not mine. Also, this channel is possible because of
Patreon, and our patrons on that platform. Please consider joining them and supporting
our mission of providing independent political coverage. And as always, I’ll see you in the next

81 thoughts on “A new MESSIAH to SAVE ARGENTINA? – VisualPolitik EN

  1. Argentina under that crazy woman is doomed for another 4 years. The economic policies and debt crisis will just be a repeat of the old days. That cycle will never break. Not gonna cry for you, Argentina.

  2. Why can't the conservatives figure out the simple campaign slogan of "Are you sick of taxes?" Is it so hard to convince people that the public sector is a morass of corruption and overspending?

  3. if I had a peso for every time Argentina went default… I would have so many pesos that the currency would need devaulation anyway 😀

  4. My buddy in Argentina moves as much as he can into Bitcoin. Only way he gets to take a vacation outside the country from time to time.

  5. The public spending is the main way for the corrupt politician to funnel the money to their personal account by cooking the book and redtape

  6. The reason poverty does not decrease even though social spending increases is that the money does not reach those who need it. It gets lost in corruption and a Kafkaesque bureaucracy. You cannot throw out all those civil servants in one fell swoop, how would they feed their families? With so many desperate people thrown out on the streets, you would have a revolution or a military coup or both. You are looking at the Argentine economy through the eyes of a technocrat and ignoring the human aspect. Even though Macri did not manage to halt Argentina's downward spiral, he was not as corrupt as K. He streamlined the PAMI, improved Buenos Aires's public transport and completed several infrastructure projects. Cristina only built hospitals as PR stunts, they are just empty shells now without any staff.

  7. Are the spending patterns of the present politicians the result of financial corruption or are the present politicians captive to a population raised to expect government handouts, unaffordable welfare state, and lack of support/disdain for capitalism and the private sector. Is the present situation the result of Peron’s ideas spreading to a large enough voting constituency so that a retreat from statist policies is now politically impossible?

  8. Este es pura propaganda Neo- Leberal. Quien dice que Argentina tiene que importar? La estrategia es crear mercados internos hjiles! Lo que trabajo para EEUU y Europa no trabaja para países de desarollo como Argentina.

  9. Politician will do whatever it takes to stay in power, and coopted enough electorate to continue this indefinitely. IMF assistance will rescue the country or rather investors from Wall Street that loaned the $. As elites and their friends benefit nothing will change.

  10. For us, brazilians, Argentina is an important commercial partner and unfortunately, their crisis is bad for us. However, Argentines made a decision, the socialism and poverty, so, for us, the solution is, buy as much wine as possible, before the complete bankruptcy of Argentina

  11. Argentinian here. I agree with your comments. I don't see a light at the end tunnel either.
    Only thing you have wrong is when you talk about importing a machine. There you get the $63 dollar rate without the "solidarity tax".

  12. The more you give to those who don't work, the less they will want to work. And the working tax payers are left working the same hours for half the the pay. Working half your life a way for free??? Does that mean your only half a slave? Get rid of the welfare for those who are able to work and invest that in to creating jobs. And make retirement a thing again. But no 🤔if politicians didn't have half your money then they wouldn't be able to bribe the poor to keep electing them. When the working people are a minority of the population this is what happen. And that is the flaw of democracy bribery is a requirement to get elected. In EVERY DEMOCRATIC single democratic country.

  13. So in other words, Argentinas economy is going downhill because they have no money to pay off debts. Strange the video had no mention of Vaca Muerta . Supposedly, if Vaca Muerta (among the largest shale oil and gas reserves on the planet) can be developed properly that it could save Argentina. Yes, one of the hurdles is government bureaucracy. The following explains VM. – https://www.youtube.com/watch?v=Mo-bdN3jemo&vl=es

  14. I wonder why we don't hear more about countries like Argentina on American news… could it be because their policies mirror the DNC's and they don't want to show what the results would be for a DNC majority in our federal government.

  15. Argentina is the opposite of Libertarianism, therefore its destiny will be misery. Our new president is a liar and an ignorant cunt!

  16. Argentina won't change as far as government actions are concerned. Take a look at two of there mother countries–Italy and Spain. Thats the road they are on also. Too bad for the good folks of Argentina.

  17. You account for 8 million people, in the private sector supporting 20 million in the public sector. Those 8 million people paying taxes also pay for the retired people and for child support, which every child is entitled to. So in some form or another 8 million workers are supporting about 38 million public sector workers, retired people and children.

  18. This is what left oriented politics of a country looks like for a significant period of time. From one of wealthiest countries in the world less than a century ago to a total mess.

  19. Argentina will be the next venezuela thank god that in brasil we have president bolsonaro if only they had an argentinan bolsonaro there wold be hope.

  20. Argentina is the future Venezuela of the south. These left governments are deadly. Brazil is now the stronger brother with a major role.

  21. This is why Chavismo needs to fail so miserably and thoroughly so that it doesn’t get continuously re-tried like Peronismo.

  22. Is there a reason for the insulting cartoon in the beginning of your video? Frankly, Argentina is about to rediscover how painful Communist Socialism is.

  23. Sadly enough, ever since Peron first came to power, the downfall of the richest country in the American continent became an announced tragedy on a perpetual basis. Apart from a depressive behaviour as part of the Argentinian culture.

  24. This is horrible analisis. UCA's analysis on poverty was proven wrong and have admitted their wrongdoing. Macri left presidency with a 32% of poverty (same as what he received)
    Moreover, Macri actually got to reduce taxes (a very short amount, but still) and even reduced them when compared to GDP (which decreased, so with a shrinking GDP it's tougher to reduce taxes, and he still did it).
    That's regarding to the "all argentine politicians are the same" bit. This was not the case. It's not JUST the forms that are different.
    We were heading in the correct direction, only that it was so gradual it was impossible to see to the public eye.

  25. No,nuestro país es una poronga facha,tenemos deudas que pagar encima los presidentes todo corruptos roban el dinero y no mejoran el país es una poronga mi país.

  26. The thing that doesn’t make sense is that inflation should not be ballooning upwards if peoples disposable income is rapidly decreasing. Inflation exists if people are spending too much.

  27. Hi, American here. Could someone tell me how Spain manages to pay their legislators only about €20,000 per year?! Is the cost of living there insanely low? I can't imagine a competent, professional legislature getting by on so little. (Not that our Congress is competent, just trying to imagine how much I'd feel I'd need if I was helping to run the country as a full time job.)

  28. Can we just appreciate that the guy who does the voice-overs has listened to people's complaints that he was too monotone and is sounding a lot more animated now?

  29. Argentina is essentially Nazism as it is. So Europe, look here to your fate.

    Realistically, Argentina can only be solved by China. Just try to catch their intentions, will you? Brazil… alone, should've been able to shake Argentina into a competitive state, though. Oh yes, there's also the prospect of Chile.

    The South American western Pacific coast will not survive sea level rises, so Chileans, Peruvians will need to go inland. So there's that.

  30. Just like in Greece. Big public sector, huge taxes per capita + red tape and policies which strangle the economy. No politician can and wants to touch the public sector cause it will lose thousands of votes. To be honest, what can you do? Fire 20% of a country's workforce and tell them to learn to code? It is a very complicated problem.

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