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The Editors

Argentina's Contempt for Its Citizens

In her fight with bondholders, Argentina's president is all too willing to throw her citizens under the bus.
Probably not an Argentinian bondholder, but still getting hurt.
Probably not an Argentinian bondholder, but still getting hurt.

In the latest episode of Argentina's default saga, the U.S. judge presiding over its dispute with bondholders has declared the country to be in contempt of court. Last week's ruling wasn't especially surprising and isn't likely to be especially consequential. More deserving of attention is the contempt that Argentina's government is showing its citizens' economic welfare.

Since the country was largely cut off from international capital markets following its default in July, the government of President Cristina Fernandez de Kirchner -- never a paragon of orthodox policy making -- has resorted to even more self-destructive coping measures. As the foreign currency reserves that Argentina needs to pay for imports have diminished, the government has issued new rules meant to keep dollars from leaving the country. Airlines now have to submit absurdly detailed information about passengers on international fights, for example, and the tax rate on foreign credit-card purchases is 35 percent.