The following is an article written by Gretchen Small for the newspaper The New Federalist. We quote it in its entirety here to give our supporters a sense of LaRouche's role in the current debate in Argentina:

Near midnight on the night of Jan. 5, as Argentines anxiously watched the nationally televised debate in Argentina's Congress over what to do to stop an implosion of the national economy which had brought down two governments in less than three weeks, Congresswoman Elisa Carrio took to the floor to tell her fellow Congressmen that U.S. Presidential candidate Lyndon LaRouche's national banking proposals provide the only viable solution to the country's crisis.

Carrio, leader of the ARI Party and well known as an expert in money-laundering and other illegalities by banks operating in Argentina, warned that, to save the country, more radical measures were needed than had yet been proposed. “There is a solution,” she said. “The time has come to really create a national bank which issues credit. And it is not we who say this; the man who foresaw the Russian crisis, LaRouche, currently a Democratic candidate for the United States Presidency, argues exactly the same thing in the case of Argentina.”

Carrio read from LaRouche's Jan. 4 release, “No Stability in Argentina Until a National Banking System Is Created To Issue Directed Credit For Job Creation,” which states:

“The current national banking system ... is totally bankrupt, and has ground to a halt. The only way to get it back on its feet, and to return to Argentine citizens their savings now frozen in the banks, is to create a new, reorganized national banking system. The central government would then use this system to channel directed credit, issued in an inconvertible domestic currency, to fund the creation of one million new jobs in the right areas, which would start the recovery of the economy. This, along with the debt moratorium which has already been declared, are necessary policy steps.”

Carrio continued: “It is also interesting to read that, earlier, he [LaRouche] analyzed how the international financial system began to collapse, which we're going to see in the world over the coming year. He warns the governments of all countries, that if they apply the restrictions of the international financial agencies, and fail to resolve the problem of the looting of their banks, there will be a succession of governments, finally resulting in total national disintegration. This is not an irrational matter, but it is totally unjust, if we fail to take advantage of this crisis to find the [correct] policies. If you want to see them, they are there; the problem is, that many times, we do not want to see them.”

Duhalde's Dilemma

Barely two weeks in office, President Eduardo Duhalde has run into exactly the dilemma of which LaRouche warned: It is impossible to keep the nation's currency and financial system linked to the international system, and simultaneously defend the country's population and productive capabilities.

Duhalde is still trying to do both. Failing to recognize that international financiers would rather permit Argentina to split apart in anarchy and chaos than have it adopt LaRouche's nation-state economics, Duhalde devalued the peso, and says the International Monetary Fund and others must give them $15-20 billion in new credits, to keep the country from disintegrating.

But IMF officials make clear they will not work with the government, should it continue to insist on price controls, trade protectionism, and its two-tier currency regime. Under the latter, the peso is allowed to float freely against the U.S. dollar for non-essential purposes, but most trade and other transactions are carried out at a fixed rate of 1.4 pesos to the dollar. Speculative attacks have started, to force the government to give up the official, pegged rate.

For their part, the privatized state utility companies, owned almost entirely by foreign interests, are threatening to pull out of the country, and let the nation's electricity, gas, water, telephone, and other vital services go hang, because Duhalde plans to cancel the lucrative contracts given them by previous governments, which allow them to charge customers in dollars, at rates indexed to international inflation!

The big “time bomb,” as Duhalde admits, is the banking system, which collapsed in December when the government of President Fernando De la Rua and Economy Minister Domingo Cavallo froze banking deposits, in order to squeeze out yet another round of payments on the foreign debt. That has left 1.1 million smaller depositors bereft of their savings, and in many cases without the means to live. Domestic production and commerce, as well as imports and exports, are paralyzed. When Duhalde took office Jan. 1, he found that the bankers had so looted the banks (which are almost 70% foreign-controlled), that should he allow depositors to pull out their savings, every bank in the country would collapse.

More Than Financiers at Work

Two governments, however, have come to Argentina's aid. The Brazilian government averted a health catastrophe, when it flew in 12 tons of insulin, some of it donated, to cover the shortage when the collapse of credit left Argentina without medicines. Brazil is working out financial arrangements to provide anti-cancer and anti-AIDS drugs, and Italy too sent medicines and funds.

There are also forces inside Argentina determined to defend the nation. The Roman Catholic Archbishop of La Plata, Msgr. Hector Aguer, for example, issued a call Dec. 20 for Argentine politicians to stop being cowardly about “The Debt Explosion.” Echoing LaRouche associates' exposé of “bankers' arithmetic,” Aguer charged that Argentina's debt was inflated to levels “astronomically” exceeding the country's ability to pay, through “financial alchemy,” including “arbitrary and unilateral changes in interest rates.” Argentina's insolvency must be turned to its favor, he said, having recourse to such precedents as the post-World War II War Debt Commission, which ruled that “no agreement whose stipulations be too oppressive, or retard the recovery and development of a debtor nation, would be in the best interest of the United States or of Europe.”

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