Argentina's beef with IMF.

ITEM: Hundreds of protesters in Buenos Aires, reported Reuters on August 31, "sparred with police and burned tires just a stone's throw away from where [International Monetary Fund] chief Rodrigo Rata was meeting ... with Argentine officials on his maiden visit to the financially crippled country."

Rato's visit followed Argentina's suspension of its participation in the IMP" loan program. According to Reuters, Buenos Aires wanted to "concentrate on reaching an agreement with private creditors on $100 billion in debt on which it defaulted in January 2002."

BETWEEN THE LINES: There's plenty of blame to share for the largest sovereign default in history, including corruption and mismanagement in Argentina. While the mobs may be misguided about the IMF, the fund itself has admitted to considerable culpability.

Argentina would probably not now have a half-million creditors if many of them hadn't expected that loans to Buenos Aires would be guaranteed. A recent IMF report acknowledges that it kept throwing money at Argentina, "even after it had become evident in the late 1990s that the political ability to deliver the necessary fiscal discipline and structural reforms was lacking." When benchmarks were missed, they were changed.

Loans were increased despite warning signs of a collapse. It has all led to what one Latin expert called "one of the greatest tragedies of modern history--the destruction of the firmest middle-class society in Latin America."

Argentina was on the IMF dole for more than three decades, even as Buenos Aires followed self-destructive policies, including almost doubling government spending between 1991 and 2001. When default loomed, bank deposits were frozen, the peso was devalued and citizens had to accept wealth draining conversion rates.

The IMF is again offering "flexibility" on a debt-restructuring plan, while Buenos Aires is operating under the assumption that its debt will be rolled over for many years. Argentina knows that, if necessary, it can again play the default card or raise the specter of an international crisis.