In contrast to the ongoing difficulties and recession in the U.S. economy, the economic story in Latin America over the last 5-10 years has been overwhelmingly positive. The economies of South America have grown at a steady average of 5-6 percent. Tens of millions of people have been lifted out of poverty. Levels of inequality, which are worse in Latin America than in any other region of the world, have begun for the first time to go down.

Countries have saved income from the commodities boom, and have used that money to implement counter-cyclical policies to mitigate the impact of the US and global recession. At the same time, and as a recent IDB study reminds us, the good news in South America is tempered by the ongoing economic struggles of Mexico, Central America, and the Caribbean, which were most deeply affected by the US recession precisely because of levels of integration.

In addition, we know that, despite gains in reducing poverty, too many people now considered middle class are only one or two paychecks away from slipping back below the poverty line. Tax structures are highly regressive; and governments are terribly inefficient at collecting even the few income taxes on the wealthy that do exist/ Economists have voiced numerous warnings about inflationary pressures, which could undue much of the progress of the last few years and affect the poor, in particular.