Argentina collapsed before default (graph)

The United States and Argentina rarely find themselves on the same side of finance or trade disputes, but the governments of both countries agree that a recent court ruling could set a dangerous precedent for debt restructurings.  

By Peter Boone and Simon Johnson.  This is a long post, about 3,500 words. In 2003 the International Monetary Fund published yet another internal review with an impressively dull title “The IMF and Argentina, 1991-2001”.  But hidden in that text is explosive language and great clarity of thought – in essence, the IMF staff belatedly recognized that their decision to repeatedly bailout Argentina from the mid-1990s through 2002 was wrong:

Some countries default on their performing debt because they no longer have the ability to pay it. Other countries default on their performing debt because they no longer have the willingness to pay it.

Argentina may learn at any time whether a U.S. appeals court will rule that it must pay US$1.4-billion to holders of its defaulted debt, something the South American country has resisted for more than a decade.

Dirk Ehnts submits: Nouriel Roubini has a comment in the FT. He compares Greece to Argentina:

Argentina has done as the Second Circuit Court of Appeals ordered, and has now formally put forward its proposal for paying off Elliott Associates and the other bondholders suing it in New York court.

The truly interesting questions about Ezra Klein and his Wonkblog are four: