Globalization, Blending or Fragmentation

The origin of the economic boom between 1983 to 1989 is found in the mechanism of the American Treasury deficit that reached the amount of US$ 134 billion in 1982, US$ 230.8 billion in 1983, this level was kept until 1989 (US$237.8 billion) this deficit had increased in the seventies around US$50 billion on a yearly basis which allowed a wide movement in favor of the reduction of expenditures or the increase of taxes in the country. Reagan eliminated the second hypothesis (getting to reduce moreover the taxes on capital and high incomes) and made cuts in the budgets exclusively of social expenditures under the pressure of the research establishment and military development devoted to technology, increasing drastically military expenditures and in particular those related to high technology research that turned out to be the initiative of strategic defense, the ridiculous Stars War that became the target of criticism of major scientific authorities of the country for its unfeasibility and waste of recourses involved and that still involves. In any manner, we can compare Stars War with the economic paper that Keynes attributed to the Egyptian Pyramids: a huge state expenditure to generate employment and income allowing in that manner the economy to function. The neo-liberalism diagnostic agrees to the fact that one of the immediate causes of the economical crisis in Latin America is found in the international recession of the eighties in special for the combination of falling down in the prices of exports and sharp increases in the real interest rates in the international markets generating a big deficit in the external accounts of the region. The present current of thinking named neo-structuralism affirms fundamentally that the main economical problems and the condition of underdevelopment that still prevails in the Latin-American countries are not due to induced distortions by the economical policy but they are based on historical reasons and have an endogenous and structural origin. In the opinion of Rosales (1988), a noticeable sample of this reality underlines in three crucial characteristics of the Latin-American economy at the end of eighties: a) the patron still in effect of external insertion that given the trade tendencies end the international financial system conducts to an impoverished specification, b) the predominance of a disarticulated, vulnerable and very heterogeneous productive factor concentrating the technical progress, and unable to absorb increases of labor force on a productive manner; and c) persistence of a very concentrated and excluding income distribution that makes evident the incapacity of the system to reduce poverty