Part of the problem is that the government can’t reasonably borrow money because Argentine bonds are along standing punchline. Argentina has defaulted nine times in just over 200 years.
I don’t know how to restore credibility on that. Secure debt doesn’t really work against a sovereign so reputation is a big part of the debt market.
Some ridiculous number of the population, like 90%, depend on gov paychecks. The politicians grow and grow the dependency, make promises to get elected, increase the debt, inflate the money, get caught stealing garbage bags worth of it while in office and it goes on and on until it collapses and the same bs recets. Each time more and more smart honest people flee, brain drain, and the ones left behind become poorer, more entrapped, more dependent.
Argentines are seeking refuge in the blackmarket dollar, but that will eventually be a risk as well.
They didn't default on their debt, precisely because they got their house back in order. But this came at great price, with major suffering by the populace during a 4-year economic crisis. [1]
Despite all the suffering and poverty caused, the government took the opportunity to reform healthcare, which was a disaster [2] and bring costs under control.
I don’t know how to restore credibility on that. Secure debt doesn’t really work against a sovereign so reputation is a big part of the debt market.