Argentina to seize private pensions

[Southernguy]

Re: Argentina to seize private pensions

Dear friends:
Private pension funds here y South America work like this: State pension systems pay pensions, the money from workers go to private companies which in turn lend them to de Government, to fund the payment of pensions. In the way, these companies, usually foreign banks get a handsome payment for doing just nothing.
The Latin american woes come from 30 years of neoliberal (that means neoclassical) economic policies who sacked our countries trhrough debt servicing, royalties, and other outflows of capital. It also helped that financial deregulation meant huge inflows and outflows of capital creating very severe macro economic problems, both in the inflows times and the outflow ones.
So, Argentinas Gov. step seems to me most reasonable.
Why do the workers have to pay hefty royalties to private companies to mismanage their monies?
Argentina has, in the last years reindustrialized itself, using part of high commodities prices windfall, as oposed to neighbours with more ortodox policies.
The same people calling Argentina´s demise are those who theorised about the wonders of financial and economic deregulation and free markets.
Dear friends: please look who´s talking about what before emiting such conclusive opinions.

[jpatter666]

Re: Argentina to seize private pensions

> They Bloody attacked us !!!!
>
> ...Not nice people !!!!!

Can't....resist.....

I had to grin for this one -- exactly how many countries did Britain take over throughout history? Maybe as a Yank, I'm prejudiced....

Is it true that the British Museum is, as Lonely Planet puts it -- "the greatest collection of pirate treasure on Earth"?

All jesting aside, that's another reason why I said the government was terrible. But having been there, the individual people I found charming.

But of course, on my travels I've had many people tell me the same about the US.

[dbarberic]

Re: Argentina to seize private pensions

wow, this is really awful. I can see the same slippery slope in the US.

My guess is that the US will not outright seize the funds, rather they will implement a portion or all of the funds to be invested in US T-Bills or zero coupon bonds.

[tsetsefly]

Re: Argentina to seize private pensions

Dear friends:
Private pension funds here y South America work like this: State pension systems pay pensions, the money from workers go to private companies which in turn lend them to de Government, to fund the payment of pensions. In the way, these companies, usually foreign banks get a handsome payment for doing just nothing.
The Latin american woes come from 30 years of neoliberal (that means neoclassical) economic policies who sacked our countries trhrough debt servicing, royalties, and other outflows of capital. It also helped that financial deregulation meant huge inflows and outflows of capital creating very severe macro economic problems, both in the inflows times and the outflow ones.
So, Argentinas Gov. step seems to me most reasonable.
Why do the workers have to pay hefty royalties to private companies to mismanage their monies?
Argentina has, in the last years reindustrialized itself, using part of high commodities prices windfall, as oposed to neighbours with more ortodox policies.
The same people calling Argentina´s demise are those who theorised about the wonders of financial and economic deregulation and free markets.
Dear friends: please look who´s talking about what before emiting such conclusive opinions.

You are very wrong on the so called neoliberal policies causing problems for Latin America. What caused the problems 30 years before that???
The problem with Latin America has been the same they have had for 200 years.
Bloated bureaucracies, weak institutions where the rule of law is pretty much absent in most countries. That is the "backbone" of their problems..
For the most part I would say economic policy reform in Latin America will do little good until the above changes, however they can do much more harm, like Chavez in Venezuela, or Evo etc.

But its funny to blame "neoliberal" policies on Latin America's "decline", it was already down to begin with, and the reforms where modest at best.

The financial deregulation was never the cause of the problem, when you have money flowing into the country mostly based on confidence of future prospects, then you see the economy is not sound and those future prospects dont look sound plus government continued spending and you have exactly what happened. But that was destined to happened in that type of environment...

[ASH]

Re: Argentina to seize private pensions

well it's a start.... time to cash it all in and move it elsewhere

Great. The requirement to invest 5% of pay in government bonds paying 3% plus inflation is pretty much exactly the same idiotic thing we already do with the excess FICA. Internal interest payments from similar such government account series bonds (the government awarding itself interest on money it borrowed from itself) are why the annual increase in the national debt doesn't match the official budget deficit. This will create a captive income stream to enable larger deficits. Since the debt represented by these bonds compounds when the government pays itself "interest" on them, this expedient will transfer even more of the burden of current operations to future tax-payers, and ultimately hasten the insolvency of the federal government.

I don't know what sort of political fortunes this type of policy may enjoy. However, the climate is probably ideal right now, given the massive losses most punters have sustained in the stock market; one assumes few are happy with their 401(k).