SAO PAULO, July 20 (Reuters) – After three decades spent battling their own debt crises and getting constantly lectured about them by Uncle Sam, many Latin Americans are watching the countdown to a possible default in Washington with a mix of schadenfraude and fear of what a collapse might mean for them.
For everybody from presidents on down to street vendors, seeing U.S. politicians argue over where to make painful budget cuts has also been a reminder that those days are over in Latin America. For now, at least, as most of the region enjoys an era of economic prosperity and comparatively tiny deficits.
In Washington, lawmakers were working feverishly to combine elements of a plan to raise the U.S. debt ceiling with market-pleasing proposals to cut spending. Congress must approve an increase in the $14.3 trillion U.S. debt ceiling by Aug. 2 or the government will run out of money to pay its bills. [ID:nN1E76I25I]
“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.
