Argentina

Argentina, once again, pulled off a pretty spectacular stunt. First, the country is running into financing problems. But, in part b/c they defaulted on their debt in 2002 without any serious plans for restructuring -- which I, in my master's thesis, said was not necessarily as bad as typical orthodox economics suggests--they couldn't access capital markets very easily to finance their fiscal deficit (another victim of the commodity downturn, btw.) So... what does Cristina Kirchner (who is rumored to be bipolar) do? She nationalizes the pension plans to plug the hole. So imagine someone says: "Errr... your 401K... that's now mine." And then... b/c the economy is so bad, what do you do? Right! Fiscal stimulus. Except you don't have any money b/c you have all this deficit in the first place. So then... you turn around and take the money from the confiscated pension plans that you were going to use to pay down the deficit and you announce a fiscal stimulus funded with that. It's really pretty brilliant, if you think about it.