How the mighty have fallen

Once upon a time, the United States of America could almost say it owned South America.  After all, many South American nations relied heavily on US foreign aid.  Of course, things have shifted and some down south are openly mocking the United States as they debate on painful budget cuts.

From Reuters:

“When did the American dream become a nightmare?” gloated Argentina’s President Cristina Fernandez, whose own country defaulted on about $100 billion in debt a decade ago.

In a speech at the Buenos Aires Stock Exchange on Monday, she contended that Argentina had prospered since then by focusing on exports and controlling financial speculation — a lesson that Washington has yet to learn, she said.

The Americans “thought that money just reproduces by itself, and only in the financial sector, without having to produce any goods or services,” Fernandez said.

Oh this ain’t good.

Memories are still fresh of the self-righteous tone that U.S. officials sometimes seemed to take when the shoe was on the other foot. One infamous example: As Argentina spiraled into crisis in 2001, then-U.S. Treasury Secretary Paul O’Neill mocked the country for its debt struggles and said: “They like it that way. Nobody forced them to be what they are.”

These days, Latin America’s economy as a whole is expected to expand about 4.7 percent in 2011 — almost twice the expected rate in the United States — thanks to strong demand for the region’s commodities and a decade of mostly prudent fiscal management, itself the product of many hard-learned lessons of the past.

Oh how the mighty have fallen, right?

To be honest, the US hasn’t really “fallen.”  Not yet anyways, but this is the problem of putting your nose in every nation’s problem.  Eventually, your chickens come home to roost.  At least that seems to be the feelings down there.  Not real surprising though.  When you tell people how to run their country for years and years, they’re going to bask in your own stumbles and falls.

Of course, with the mocking comes some serious concerns.  There’s fear of the crisis spreading if the US does default on loans.  Brazil is especially worried, and not without good reason.  With $211 billion invested with the United States, they can ill afford a default.  This is the same nation that came begging for a bailout a decade ago.

I’m generally a pessimist, but not on this whole budget thing.  History shows that economies ebb and flow.  We’re in an ebb now, but things will inevitably improve.  How long until it does?  Well, that remains to be seen, but it will improve.  When it does, we need to learn the lessons.  We need to quit trying to tell everyone else how to run their nations and focus on getting it right here at home.  If we do that, then the rest of the world will eventually do the same.  Examples are always stronger than lectures.

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