By LARRY ROHTER

BUENOS AIRES, Dec. 24 — Argentina's declaration of a moratorium on repayment of its foreign debt marks the end of a failed economic
experiment that has cost this country dearly. But it is also a blow to the United States and the International Monetary Fund, which had
invested much of their credibility and prestige here, yet proved unwilling to help when things began falling apart.

"I think this is going to end up being a very costly experience for the United States," Walter Molano, chief of research for BCP Securities, a
brokerage firm based in Connecticut that focuses on Latin America, said today. "It was very clearly the Department of the Treasury that pushed
Argentina over the edge and allowed it to collapse, so I think the issue of accountability has to come up."

A decade ago, Argentina decided to tie its peso to the dollar at a value of one to one, a decision that at first dramatically reduced inflation and
imposed fiscal discipline, but eventually led to the current crisis. The first Bush administration had strongly urged that step on Argentina, and the
United States tried to sell the same system to other doubtful Latin American countries.

There is plenty of blame to go around. But from the start, the second Bush administration found it convenient to overlook the United States's earlier
role as advocate and cheerleader of that policy and to distance itself as much as possible from Argentina's growing problems. The bluntest
statement of official indifference came from Treasury Secretary Paul H. O'Neill this summer and helped accelerate the loss of capital and
confidence here.

"They've been off and on in trouble for 70 years or more," Mr. O'Neill said dismissively in an interview with the British magazine The Economist.
"They don't have any export industry to speak of at all. And they like it that way. Nobody forced them to be what they are."

What was missing from Mr. O'Neill's analysis, however, was any mention of the high tariffs the United States imposes on Argentine exports or of
the aversion to easing those barriers to help Argentina regain its footing. Nor was the Bush administration particularly helpful in "creating some kind
of framework for how the international system could respond, rather than saying, `It's all up to you,' " said Peter Hakim, president of
Inter-American Dialogue, a Washington-based conference of hemisphere leaders.

As a result, "the Argentines were operating in a vacuum, without a clear sense of what the United States was thinking and what it was prepared to
do to be helpful," Mr. Hakim said. "The real blame is passivity: the U.S. did not want to engage, and so it stayed on the sidelines."

Taking its cue from the Bush administration, the International Monetary Fund kept "raising the bar" on Argentina, in Mr. Molano's words —
requiring increasingly harsh austerity measures — in return for the disbursement of money already promised. That was followed by the fund's public
declaration on Dec. 18 of its lack of confidence in the Argentine authorities, which helped hasten the government's fall.

"It's clear that the mix of fiscal policy, debt and the exchange rate regime is not sustainable," said Kenneth Rogoff, the fund's chief economist. He
also maintained that "everyone recognizes that to a large extent the problem lies in Argentina," a statement that did not ring true to other
governments in the region.

"The fund is partly to blame for this because the fund did not sound the alarm in time and then took a very hard line when things were incredibly
difficult," said Pedro Pablo Kuczynski, the finance minister of Peru, which has itself been in in talks with the organization recently.

But the abandonment of Argentina represents more than just an economic policy failure. It also has a strategic effect, because it confirms to the rest
of Latin America what many leaders have always maintained: that the United States is a fickle and undependable ally.

Over the past decade, Argentina has aligned itself more closely with the United States on foreign policy questions than any other country in the
region. It was the only Latin American country to participate actively in the Persian Gulf war, and in recognition of that and numerous other
demonstrations of support, the Clinton administration formally designated Argentina a "non-NATO ally."

Even with its economy disintegrating, Argentina has not wavered from a commitment to send up to 600 troops as part of the peacekeeping force in
Afghanistan and to open a field hospital in Pakistan. That effort, which will cost Argentina up to $20 million, has been criticized here as an
expenditure that would be better directed at creating jobs for the millions of unemployed.

Six months ago, Turkey's situation was very similar to Argentina's. But while Argentina has been left to fend for itself, Turkey has been showered
with financial and political support, which most people here regard as proof the United States regards Turkey as vital to American geopolitical
goals in a way that Argentina, despite its demonstrated support of the United States, is not.Now, other Latin American countries are likely to draw
the conclusion that there is no payoff for being America's friend, at a time when the United States hopes to draw its neighbors into a Free Trade
Area of the Americas.

"On the whole, I think this bodes very badly for building a long-term economic community in the hemisphere," Mr. Hakim said. "If this is what
community means, it doesn't really mean much."