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What you've just written, demonstrates your complete lack of understanding of how the IMF operates.
The IMF has prescribed the same medicine for troubled third world economies for two decades now: Tighten the money supply to raise internal interest rates to whatever heights are needed to stabilize the value of the local currency. Increase tax collections and reduce government spending dramatically. Sell off public enterprises to the private sector. Remove restrictions on the inflow and outflow of international capital as well as restrictions on what foreign businesses and banks are allowed to buy, own, and operate.
Only when governments sign this structural adjustment agreement does the IMF agree to lend enough to prevent default on international loans that are about to come due and otherwise would be unpayable. Arrange a restructuring of the country debt among private international lenders that includes a pledge of new loans.
The predictable consequences have always been disastrous. Tight monetary policy and skyrocketing interest rates not only stop productive investment, stampeding savings into short-run financial investment instead of long-term productive investment, it keeps many businesses from getting the kind of month-to-month loans needed to continue even ordinary operations. This fosters unemployment and drops in production and therefore income. Fiscal austerity raising taxes and reducing government spending further depresses aggregate demand, also leading to reductions in output and increases in unemployment. Likewise, if any of the government spending eliminated was actually improving people's lives, then reductions in those programs eliminates those benefits. Privatization of public utilities, transport, and banks is always accompanied by layoffs. Whether productivity and efficiency is improved in the long run depends on how badly the public enterprises were run in the first place, and if private operation proves to be an improvement.
One of the most glaring inefficiencies of structural adjustment even on its own terms, has been that in its haste to reduce public sector budgets. The IMF has seldom taken the time to try and distinguish between poorly run and well run public enterprises. In its crusade to privatize, the IMF routinely lumps efficient public enterprises together with white elephants that do provide poor service to the public while paying bloated salaries to relatives and political supporters of ruling political parties. The IMF never considers the possibility that private replacement might be even worse.
Hasty removal of restrictions on international capital flows makes it easier for wealthy citizens and international investors to get their wealth out of the country, i.e., removal of capital controls facilitates capital flight, further reducing productive investment, production, income, and employment. Removing capital controls further exposes the local economy to the vicissitudes of global capital mobility, including the disease of contagion.
In Argentina's case the economic collapse is the latest failure of the one size-fits-all model that the United States tries to impose on developing countries.
The economic model that the United States exports, with the International Monetary Fund in the role of enforcer, works like this: Developing nations are supposed to open their economies wide to foreign investment, to allow their banks, public utilities, and anything else to be sold to the highest foreign bidder. They are to balance their budgets, restrict the role of government, discipline wages, and limit social outlays. All of this is intended to subject the local economy to global competitive discipline and attract foreign private capital.
It sounds plausible, but there are several problems. For one thing, foreign investments are notoriously subject to fads and whims. Several otherwise sound economies in East Asia got into severe difficulty in the late 1990s after following the American recipe. Too much foreign capital poured in, and when the bubble burst, it poured right out again. The IMF then came in to shoot the wounded.
Argentina followed the IMF model more faithfully than almost any other nation. Its economy was opened wide; its peso was pegged to the dollar. For a few years this sparked an investment boom as foreigners bought most of the country's banks, phone companies, gas, water, electricity, railroads, airlines, airports, postal service, even its subways.
As long as this money came in, there were enough dollars to keep plenty of pesos in circulation. But the dollar-peso deal led to an overvalued currency, which killed Argentine exports. And once there was little more to sell off, the dollars ceased coming in, which pulled money out of local circulation. As Argentina tanked, the IMF's austerity program pushed the economy further into collapse.
The United States and the IMF, is tilted to benefit investors often at the expense of ordinary people, particularly in the Third World. The countries that have had the highest growth rates, such as Korea and China are precisely those that have resisted much of the IMF model.
>Corporations can plow in all the cash they wish to
>candidates, but they still cannot vote. Only people vote. Do
>you honestly think corporations would ever support anybody
>but Republicans if it were that easy to control elections?
How do you think Kennedy got elected? He was a Democrat.
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Sid