According to the author, recovering Argentina has been doing better and better ever since its economy became a mostly cash/equity game (while having very little consumer credit and very little foreign, national, corporate and mortgage debt), and the United States is bound to discover that its cure for anemic economic growth (credit) just might turn out to be toxic in the long run.
I COME  FROM ARGENTINA, one of the only countries in the world that has fallen out of the elite club of developed countries and into the ranks of the less developed world.
Argentina’s GDP per capita was higher and better distributed when I was born in the ’60s than it is today, “As the world enters a U.S.-originated credit crunch, Argentina finds itself in a unique position: that of having high reserves and no net debt while being isolated from global financial turmoil”and as recently as 2002 the country was on the ropes with nearly half of the population living below the poverty line, the largest default in human history (3 times the size of Enron ) and an incredibly high unemployment rate.
However, declaring default and, for the most part, not paying off its foreign debt has turned out to be a blessing in disguise for Argentina. After default borrowing became impossible, most of the credit disappeared and the economy became a mostly cash/equity game.
Surprisingly, the country has been doing better and better ever since. Argentina has grown at a 9 per cent compounded rate, while having very little consumer credit and very little foreign, national, corporate and mortgage debt.
CASH IS KING
In Argentina, cash really is king; other forms of payment are virtually non-existent. So as the world enters a U.S.-originated credit crunch, Argentina finds itself in a unique position: that of having high reserves and no net debt while being isolated from global financial turmoil.
It is ironic that the U.S. has been going around the world promoting credit as the cure for anemic economic growth and using the IMF  and the World Bank  as its flagships, and now finds itself intoxicated by its own medicine. In the meantime, formerly failing states such as Argentina are discovering that a mostly equity-based economy is much better in times of financial crisis, and that the indebtedness that the U.S. was predicating for decades has many drawbacks.
It is especially inconvenient when you become, by far, the largest debtor in the world, as your currency sinks and people begin to wonder if it even makes sense to continue to collect your bills.