Monday, November 10, 2008

Another 401(k) plan bites the dust in Argentina

Argentina’s government has announced their intention to expropriate $30 billion held by Argentine citizens in private pension funds (similar to 401(k) retirement savings accounts). The money is needed to refinance old bad debts so that they can borrow yet more money to keep the country afloat. The announcement rocked investor confidence in Argentina and sent the Buenos Aires stock market plunging.  More details can be found here.  

Expropriation refers to confiscation of private property with the stated purpose of establishing social equality. Argentina is quickly falling into economic socialism.  The country's rank plummeted from 19th-freest economy in the world (out of 156 countries) scored in 1998 to 108th out 162 countries by 2008 as calculated by the Index of Economic Freedom. 

This action by Argentina sounds eerily similar to the plan currently under consideration by our own US government.  

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