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This paper examines Argentina’s December 2001 debt default and the explosive debt accumulation process that led up to it. The orthodox explanation of runaway fiscal spending as a reason for Argentina’s debt build-up is examined and found wanting. Rather, Argentina’s debt accumulation process was the direct result of: i) Washington Consensus policies promoted by the International Financial Institutions and enthusiastically implemented by local officials, and ii) a series of exogenous shocks that resulted in skyrocketing debt service payments. Argentina’s debt restructuring process formally ended the default, resulting in an overall reduction of interest rates, a substantial capital reduction, and considerably longer debt maturity. However, Argentina’s debt service schedule is such that it will continue to be the dominating factor in macroeconomic policy-making for many years. Furthermore, it will likely involve new debt-refinancing agreement with the IMF, which could mean renewed IMF supervision of economic policy-making, with the well known and costly results. The paper concludes with some lessons that can be drawn from the Argentine experience: 1) default can be a viable option; 2) it is easier to default on foreign borrowers than on domestic borrowers; 3) any debt restructuring process should give priority to debt sustainability based on a growing economy with a strong internal market rather than to pleasing financial markets; 4) a return to international capital markets is not a sign of success; 5) ending financial stop-and-go cycles and debt-led capital accumulation should become a priority; 6) debt restructuring should be an opportunity to …