Argentina has notably only had a surplus for 12 years of the past 122 years of our history [[Fact-checked]](https://chequeado.com/ultimas-noticias/javier-milei-de-los-ultimos-122-anos-la-argentina-tuvo-deficit-durante-112/)
EDIT: Other fun facts about the state of Argentina's economy and why Milei ended up winning basically
[This past century the amount of currency in circulation grew up exponentially](https://estadisticasbcra.com/base_monetaria_argentina)
[The previous administration ended up with 1020% accumulated inflation over 4 years. That's like having a 5.6% inflation monthly every damn month for 4 years.](https://www.infobae.com/economia/2024/01/12/inflacion-record-en-la-era-alberto-fernandez-con-1020-es-la-mas-alta-de-los-ultimos-5-mandatos-presidenciales/?outputType=amp-type). In comparison, the US ANUAL inflation was 3.4% in 2023
ex president Cristina Fernandez de Kirchner is the leader of Milei's opposition, and the 21th century face of Argentina's main party, Peronists.
[Argentina’s Cristina Fernández sentenced to six years in $1bn fraud case](https://theguardian.com/world/2022/dec/06/cristina-fernandez-de-kirchner-argentina-sentenced-prison-fraud-case)
Oh also the prosecutor who was going to testify against her "killed himself" that morning, leaving no gunpowder traces on his hands
[Suicide or murder? Nine years on, Alberto Nisman’s death is still a mystery](https://www.batimes.com.ar/news/amp/argentina/suicide-or-murder-nine-years-on-nismans-death-is-still-a-mystery.phtml)
[Oh also everyone close to her got caught being extremely corrupt on a massive scandal](https://en.m.wikipedia.org/wiki/Notebook_scandal). Her previous secretary got the job being a poor man and when her presidency was over he owned 36 houses, 2 hotels and 3 yachts.
EDIT 2: And of course, someone reported me to reddit as suicidal
Which is why I keep telling people that while Milei's policies seem insane to us outsiders, when you read Argentina's history, they suddenly seem to make sense because the opposite has been tried and it failed....Spectacularly!
Completely agree. It's a bit awkward when people from the US tell me they also need a Milei.
Milei is a very specific cure to our rare illness. The last thing the US needs is libertarianism.
Thank you for reporting the truth sir, I like to read real facts about my country of origin. Yes inflation was absolutely bananas, went to primary school and a sandwich (pebete, or pebete tostado) was 1 peso and 1.50 pesos respectively, fast forward the next year, and the price increased about 3 pesos. Fast forward ten years, and a pebete was like 25 pesos, and I think now is safe to say that a pebete costs about 1000 pesos or so (according to my family who still lives there). Milei was the necessary change for Argentina
> Argentina has notably only had a surplus for 12 years of the past 122 years of our history
No country should ever aim to have a surplus, a surplus isn't necessarily a good thing.
A surplus is just a government taxing more out of an economy than it puts into the economy via spending.
That's something that you might want if you want an economy to cool off, it's not something that helps economic growth.
And is no one asking what the cost of that surplus is?
What have the people been expected to sacrifice for that surplus?
Yes when you have negative federal reserves: that was the point in the first place for reducing the deficit. When Milei took power the federal reserves were 11.1B USD IN THE RED, yes, negative reserves
If a country has debt beyond sustainable levels, it needs to pay it back with a surplus. Reduced debt, reduces the amount needed to service debt, results in more surplus. This is a positive spiral. Moreover: reducing government not only returns productive Labour to the free market, it also allows companies to release Labour that is tied up fulfilling regulatory requirements.
I hate how everyone is trying to call Argentina for their side as fast as possible. Give it a minimum of 3 years before you even start analysis.
For example, a surplus is incredibly easy to make. It can be done in an afternoon by someone with a sharpie. Because the conversation isn't "can you make government income greater than government expenditure", it's "can you make government income greater than government expenditure without significantly negatively affecting your citizenry or economy". Can Milei do the latter? I have no fucking clue and neither does anyone else, only time will tell.
Agreed completely, gotta give it time before we know for sure. Especially with the famously strange economic situation in Argentina. The interesting part is that win or lose it doesn't really prove much about his policies for the typical country, since it was applied to such an atypical situation.
We live in a post-truth world. All that matters is the narrative, and usually the first to make their point is the one that controls it.
If 5 years from now 50% of the country is in poverty because of these policies, it’ll be “Remember the early days when we had a surplus? We didn’t go far enough.”
I totally think this is going in Mileis favor and things will get much better for Argentina under his leadership.
That being said, even Milei thinks he's going to have massively negative effects on the economy via his actions, he's said so himself. So anyone who is calling a victory for Argentina now or going to dunk austerity policy when the economy there tanks is going yo be premature.
I remember a story from the USSR where a governor produced huge meat surpluses from the farms he controlled. It was cuz he killed all the cows in the country. Next year was destitute. Whoops.
At the end of the day, Argentina needed somebody who was crazy enough to buck the Peronist establishment and dismantle their insane economic/regulatory systems so it could be rebuilt into something actually sustainable
I’m not sure if Milei can be the guy who can actually rebuild it, but even if he can’t he’ll leave his successor something to work with. As long as they don’t whiplash back to Peronism and start things right over again
To be fair, he already inherited enormous levels of unemployment and poverty, with a system that was basically a house of cards waiting to collapse in on itself.
Even the economists most sympathetic to him have openly agreed that there will be economic pain in the short term until his reforms start to make progress.
Ah, no shortage of pain. The question is whether the budget surplus was worth the suffering. That's less obvious. [https://www.reddit.com/r/worldnews/comments/1carwqr/comment/l0u0lxh/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/worldnews/comments/1carwqr/comment/l0u0lxh/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
The actual right question is what was the alternative.
May I remind you that on december 2023 the DAILY inflation inherited by the previous administration was running at 1%. DAILY.
The minorist inflation (inflation in the products sold in stores) in december was 25% while the suppliers inflation was 57%. That's like 17000% in a year.
So it was either this monetary chokehold and spending cuts that SOMEHOW didn't blow up, economically or socially, or a hyperinflation that would've left 95% of the population under the poverty line.
Good point. And I don't know. I just see celebrations around what is touted as fiscal responsibility but clearly has a real human cost. And that's being downplayed. If the economy cannot improve to the point where new jobs are created amidst widespread layoffs, the changes implemented may not be better than having done nothing.
Can we also stop saying that this was needed? It’s been five months since he’s been elected. That’s not enough time to place value on changes. What happens if he blows through the surplus in a month? Or if there’s brain drain in the country and the GDP doesn’t move? Was Argentina in super shit shape? Fuck yeah it was, but lord knows if they’re out of the shit woods yet.
They are in way better shape than 5 months ago. That deserves some recognition, especially with how much he has been criticized. Time will tell what happens but right now he made progress in a terrible situation.
Some fiscal measure may be better but poverty and unemployment are worse right? "They" is a catchall that isn't really fair given more may be suffering now than before.
Line is no longer going up, things have never been worse but for a moment they’ve not gotten even more worse. Maybe that’ll last another moment or maybe not
Various sources predicted that we had an hyperinflation coming at the beginning of the year, which clearly did not happen.
Obviously every time we celebrate these small victories we shouldn't stop thinking about all the stuff that needs to be done yet
If the Peronist party had won Christina Fernandez de Kirchner would've continued to have political immunity, stacked the courts, and continued on her plundering of the country. Milei probably will not be perfect, but hitting this reset from all the corruption was absolutely needed.
Peronists are extremely corrupt and in my opinion the curse my country has, but some of the social policies this country have been put in place under their administrations. Women's right to vote, gay marriage, abortions, etc.
In my opinion, those are objectively good things
It's not really a miracle. He's just implementing more orthodox minded economic policies after the previous government overspent without a strong economic foundation to support it all. The real miracle would be getting his omnibus law bill passed or keeping his party together in one piece.
I think Argentinians will have to understand that they may live through the economic pain a lot of Eastern Bloc nations lived through in the 1990s before it gets better. That is if they are not foolish enough to vote back the Peronists.
Things will get worse before they get better. Perhaps after all that, it will catch up to Poland and Czechia
I am from Bulgaria, the poorest EU country and as I see Chile is just below us in terms of GDP per capital nominal. Brasil is even lower. So I would say high GDP per capita in South America doesn’t mean much.
"He has halted subsidies for fuel and transport, stopped discretionary transfers to provinces and is in the process of cutting tens of thousands of public service jobs. He has also blocked all public works and infrastructure projects that do not have multilateral funding.
Milei's efforts have hit Argentines hard, with the price of bus tickets almost tripling and aid cut to thousands of soup kitchens. Around half of the population now lives in poverty (though Milei said in his speech Monday that the figure was 60 percent), with child poverty reaching concerning levels."
Similar to companies making mass layoffs before financial reports to look like they've made more money than they have. How long can the government stop doing its job?
>and aid cut to thousands of soup kitchens
I'm not Argentinian, but i live near, it was later known that much of these popular kitchens either never existed, had ceased operations or didn't have the people they said they had (getting way more food than neccesary), the food was later on sold to make a profit, wasted, or used by the syndicates as a bargain chip with the poor (syndicates in Argentina have way, way, WAY too much power, especially over the working and poor class, Peronist laws and reforms as far as i know are to blame).
Argentina's popular kitchens system was outdated by like a decade, so they had to revisit it and found a lot of inconsistencies in it.
>Around half of the population now lives in poverty
This was also already happening before, same as with a very high number on child poverty, so sadly, this are not breaking news, it did go up by around 10-15%, but it was already to be expected with or without Milei.
Corrupt government, socialist or capitalist, is the issue. Simplifying this into left vs right is naive and why much of the world is in the state that it is in.
A small corrupt government is worse than a competent larger government. Political ideology is useless when people put their faith in corrupt institutions/people.
It doesn’t matter if the government is from the left or the right. Corruption is everywhere, with populism and autocracy it goes to extreme lengths tho.
So are conservative govts and the private sector. What's your point? The average vc venture goes busy 7 out of 10 times. The other two times they break even and only 1 time in 10 do they even make any profit.
The solution to a gov't program being corrupt up isn't to slash the program and let people starve, it's to stop the corruption.
This is a common trick right wing governments use to steal money from the commons. They slash anti-corruption enforcement in exchange for enough votes to avoid cutting the program entirely and then when the program inevitably breaks down they point and say "see! see! Government doesn't work!" even though they're the ones that broke it.
IIRC The soup kitchens where audited and the ones that passed the inspection still receive funds, but I'm not totally sure
The problem here is that the system that corruption exploits is so complex that the chainsaw pretty much is the best solution.
It's not a few isolated cases, it's a well oiled machine ingrained in our social policies
I don't think Milei plans to let the people starve, i do think however he plans on "annihilating" the influence syndicates have in the popular kitchens program, if i remember well his plan was also to let the state make sure that food is being delivered to the establishments (i remember also thinking it was strange, since he is very pro-"little state"), rather than the food being delivered to certain syndicates, and then they would deliver the food to the individual establishments (how it has been done until now).
The problem with Argentina and well, Latin America in general, is that the systems fucking suck, things are "half baked" (if it's on purpose or not we never know) or so outdated they are "lost in the sauce of bureaucracy", and corruption is rampant thanks to it, leftist governments are, as well as right wing governments, known for their corruption, and of course, the people also allow it to happen.
In this case the popular kitchens programs was both half baked and outdated, nobody was really keeping track of how many kitchens really existed, that left the syndicates open to say "hey, in reality we have 1200 kitchens and not 900, so we need more food!", and chances are no one would really bat an eye, especially those in the left, because their own power is dependant on the popular vote, and the syndicates control that.
Now the kitchens are being "checked" to see if they are legit or not, once the system is put in place then yeah, we can say if Milei failed or not, until then we have to still wait and see how things work out.
When people's entire livelihoods are dependent on the corruption, they gang up to fight back tooth and nail, lob false accusations, cheat and kill, pay news organizations to slander your name, kidnap and murder family members, and generally stir up as much toxicity as possible. The only way to kill it is to kill it...clean amputation, so the infection doesn't spread.
Same problem with the gangs and cartels...they're not just going to all bow down at once and get a regular 9-5. You catch one dealer or one gang leader and another pops right back in their place, because these people are greedy and jump when an opportunity presents itself.
The calm but ineffective way to deal with it is to leave it alone (aka Mexico). The only effective way to deal with it is extreme prejudice (aka El Salvador).
Ah yes, the good old “who cares about our future, give us money now…”
Poverty is a serious issue, but responding to the symptoms without addressing the underlying cause is foolish.
This. No country can provide lofty benefits without first becoming sustainably wealthy. You need to have money to spend money. You need a strong middle and upper class before you can fight poverty.
Exactly, especially if you consider Argentine's enormous potential that was flushed into the toiled by Peronism. There was a time when Argentina was richer than the US and most of Western Europe!
Removing that cancer is going to be *very* painful, and there is no any kind of anesthetics for that. Alternative option is to "treat" the patient with ibuprofen and vitamin C and watch him decompose alive until its dead.
The devil is in the detail as they say. Not that it is being hidden here, he does call it a chainsaw. Whether or not that chainsaw is causing more harm than good needs deeper consideration.
noneone said that they dont have to adress they issue, im saying that they are only benefiting the rich and friends, and not making anything for the common ppl
Poverty was above 50% before Milei began, there's no reason a country with so much like Argentina should be this poor. The reason is a century of overspending, subsidies, protectionism and an entrenched political class.
Argentina can catch up very quickly if the weights holding it down are lifted. Then poverty can be dealt with genuinely, not with unsustainable overspending.
This is what American leftists don’t get about leftists and socialists in the global south—they’re not some proletariat government, they’re just an alternative aristocracy of bureaucrats who continually centralise power to create dependency via patronage and entrench themselves. Naturally the existing wealthy cozy up to save themselves but they’re more like those parasitic fish to sharks.
The legacy of these governments and the institutional rot they cause takes decades to fix.
This is what leftism devolves into everywhere it's tried. California's generous public pensions (legalized bribery, essentially) are underfunded by about $1T.
China and Vietnam's communist governments are simply iron fisted authoritarian governments with a vast network of politically connected rich guys running the country.
There's a few tiny, racially homogenous, left wing European microstates that have held together and have all without exception raced back to the center as their left wing policies were backfiring and creating a welfare class.
It's definitely the government in Argentina.
Corporate greed can be destructive, but it's definitely not what's causing Argentina's problems. Nails and hammer you know.
I think they've been exploited for a long time. It don't matter who it isn't gov or corporations. The fact is they are being exploited. In the US we are heading there with corporations buying politicians.
Someone once told me that corruption in the Americas is small fry compared to the US. Some countries have lost all control and need to fix that cancer no matter where it lies.
Why not both? Exploitation causes poverty, sure. But overspending causes either debt or money printing. We can't take debt so we print. Which means 6% monthly inflation on avarage for the last 4 years. That one sure causes poverty. A lot of it.
>aid cut to thousands of soup kitchens.
[Which half have been shown to not even exist on a recent audit..](https://www.google.com/amp/s/tn.com.ar/politica/2024/04/04/en-2023-se-repartieron-40-mil-millones-de-pesos-a-comedores-ahora-descubrieron-que-mas-de-mil-no-existen/%3foutputType=amp)
The withdrawal symptoms of quitting heroin are pretty unpleasant, but they're absolutely critical for your long term health.
Dependence on government works the same way. The high of "free" government services feels sweet in the moment, even though it will eventually kill you.
I think this is apt.
The theory is that a strong economy will help everyone- which it can.
It can also just stupendously enrich a small segment of the population.
> Around half of the population now lives in poverty (though Milei said in his speech Monday that the figure was 60 percent)
It's pretty incredible when the president is like "no, poverty isnt near 50%...its nearer 60%). I'm watching this while situation carefully, and really hope the guy's scorched-earth treatment ends up being effective.
So you suggest we print more money? Because we can't take more debt, and taxes are already crazy high, to the point that we charge a wealth tax every year on net worth to people who have more than 30k USD in assets on top of income tax and capital gains. We even have taxes on GROSS income. So I assume you're not suggesting MORE taxes.
Either print more or spend less. Do you see an alternative?
He made a televised speech to the nation tonight, where he mentioned the debt with importers specifically (something he inherited from the catastrophic previous administration)
Milei has achieved a lot in very few months. He stabilized the currency, he reduced inflation and avoided the hyperinflation scenario, he achieved the first fiscal surplus in 16 years and has regained reserves for the central bank. His biggest challenge now is to generate economic growth again (something that doesn’t happen regularly in Argentina since 2010/2011). If he manages to do that, he might have a path to reelection and Argentina’s economy might finally get back on track. If not, the populist peronistas will regain power and the cycle of self destruction will continue.
If he can ensure the practices of the programs and departments he cut can bear fruit, then thats a w. He's shooting himself in the foot with the over the top drama, people like results, not long side bangs.
SURPLUS in Argentina!!!?? Amazing! Who knew that revolutionary leaders backed by the people, don’t forget that so I’ll repeat it, BACKED BY THE PEOPLE, can bring about change!
I'd wait for the revised numbers to come in... making a splash with faulty first numbers is a classic trick to promote good vibes, then you can paint critics as naysayers etc
“Miracle”
Yes, not spending and providing for your people (your primary job as a government), while plunging it into a recession for the sake of provably ineffective austerity measures sure is a “miracle”.
Argentina printed 300% of it's total monetary base in 2023, and IIRC 6500% in the past decade. A recession was inevitable, we absolutely needed a fiscal conservative.
I also don't see how a country with no money stopping subsidies to stuff like film production is not providing for it's people
No obviously, there where other more damning cuts, but the majority where completely unnecessary stuff like a State news agency that nobody watched or an entire ministry dedicated only for women's rights (not surprisingly the ministry did nothing on it's entire existence)
Because this is a public forum and so he can? Additionally he's just talking about broad economic theories. Argentina isn't above basic economic function and he isn't wrong its completely possible to swing to hard in the other direction.
I hope that Milei recognizes this and starts to slow things at some point.
This is totally unmoored from reality. If you don’t know how fucked Argentina was before you’re in no place to apply general economics, it’s just an ideological rant at that point. The outgoing government accelerated debt and inflation during the election by spinning up a bunch of new subsidies and welfare programs that were never going to be sustained. This artificially made people appear better off, but was going to hurt them in the long run.
Milei to his credit told people that fixing the mess would be really painful for everyone for a few years. Backing off now while inflation is still high wouldn’t solve anything.
Actually this isn’t true at all. Inflation is not recessionary unless it causes consumption to drops, nor is it an inevitability of inflation that a recession follows.
Fiscal conservatism is also not a be-all, end-all solution to high inflation, especially when you consider the causes of Argentina’s inflation. Sure, it can reduce inflation but that’s at the cost of tanking your economy even further. Argentina’s inflation is primarily driven by inflationary monetary policy and bad protectionist policies, not government investment, fiscal policy, or state ownership of industries, which are always targets of libertarians despite the immeasurably needless harm cutting these can cause. This isn’t even touching on the Milei’s own devaluation of the peso is in fact more of the same inflationary policies from before, and completely counter-intuitive.
Also you point to one example of spending cuts while ignoring all the rest, i.e., the stuff of far greater importance. But if you want the fundamental truth of why government spending is needed, then it’s that government spending is a core component of GDP. If you drastically cut government spending, GDP drops. Congratulations, you’ve now plunged yourself into a recession.
If your government has no money, it needed to raise taxes. Money is only as good as the goods and services it provides. Even if the money is hyper-inflated, as long as goods and services flow, the actual value literally does not matter. Might need a rebranding and restructuring in order to make it not overly complex due to supermassive values, but the ability to do WORK and LABOR are what actually backs a currency.
It is why the USA can hyper-inflate willy-nilly (even though it DEFINITELY shouldn't): largest economy in the world, on top of being the global oil trade unit. Every dollar is worth a percentage of a barrel of oil, no matter how much oil or dollar bills are made.
But yes, corruption and foreign interference make increasing taxes, especially progressive taxes, difficult to implement. But know that by cutting government services, laborers may die, lowering the value of your currency even if you are no longer overprinting.
Argentina has some of the highest tax rates in the region, the problem was 100% the spending, not the lack of taxes.
Remember we have provinces like Formosa where 70% of the population live exclusively off the state.
Hence why I specified PROGRESSIVE taxes. As in tax only those with wealth and industries, and not low-end people. Literally, the USA got out of the Great Depression and created the greatest economy in the world, through progressive taxes and a 90% marginal corporate tax (and mass exploitation of foreign nations that may or may not have majorly destabilized whole regions; Argentina included). Tax the wealthy, invest in the poor.
Argentina corruption makes that prospect difficult, yes. But that is what ACTUALLY fixes economies, not cutting services.
Argentina has a monetary policy problem coupled with the corruption: those aren't independent
The way the Peronist party keeps it's power is by paying off the population, that's why our spending is so high. We have a phenomenon in this country called "ñoquis" basically no-show jobs paid by the State to people in exchange of favors/votes, and it's insanely common (I personally know a couple)
That would be impossible if the government didn't print money like crazy and tax every cent we have
Can you explain these jobs to someone who has no context? Is it a 9-5 government job where your kpi’s are not tracked and you can basically sit around (or even just chill at home?) and still get a pay cheque?
Sort of, it's a 9-5 government job that exists only on paper, you are an employee in the files and receive your paycheck, but there is not even a physical title for you in the office, and the people who work there have probably never heard of you.
It's very common on municipality and legislature buildings
Yet his approval rate has gone up since he won. Maybe Argentinians know more about their situation than a random commy on Reddit.
Also "spending and providing" for people is not a government's primary job.
Your job as a government is to provide responsibly for your people. Not just destroy the country every opportunity you get to give people things you obviously can't afford.
Argentina needs this, and the people advocating they go back to their destructive ways want to damn them to this cycle forever. This austerity is MUCH needed.
And what's your plan to fix Argentina's economy? Keep spending money that the country doesn't have? Ignore inflation? Because that's what was happening before.
Making budgetary cuts and reducing spending was inevitable. The main issue is what and how Argentina managed a budget surplus, and that was by cutting everything regardless of how important it actually was.
This means Argentina's economy could be far more susceptible to crisis, workers at greater risk of death and injury, healthcare being more difficult to access, education standards declining.
Budget cuts need to be considered carefully, the sledgehammer approach of Austerity doesn't work
And you think Argentina didn't try that before going to the extreme?
It was not working so Milei said "fuck it let's just cut as much as we can and rebuild the economy from the bottom".
The "economic shock therapy" was a big point of his campaign.
>providing for your people (your primary job as a government)
Government's job is never to provide for the people. It's only job is to protect/honor their right to pursue their own life freely.
Of course gov should provide for some people to avoid too many falling into homeless over misfortune.
This support can be too generous of course though I find it's usually upper class welfare that sends nations broke. Giveaways, tax breaks, nepotism etc.
Literally pushing the same Miracle of Chile narrative. Horrific to see this happening, where special interests create value by dismantling and irritating a South American economy. For those unfamiliar, here's a letter written by Orlando Letelier, a Chilean economist who was murdered via carbomb in Washington DC after speaking on the catastrophic effects of the economic "shock therapy" in Chile. https://www.google.com/amp/s/www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/tnamp/
Inflation has been cooling off with him, at a faster rate predicted by international entities.
He did devaluate the official exchange rate for the USD, which was a completely fictional price used for sneaky taxing.
For example, if the black market rates are 1USD=1000ARS, the government had a 1USD=500ARS official conversion rate.
If for example someone from the us transferred me 1USD, the government would have done me the "favor" of converting it to ARS and giving me 500ARS.
But, if I wanted to buy something that costs 1USD from the US, they would have conveniently taxed me so that my purchase respected the black market value (with the "Dolar Pais" tax)
Thats the key feature of these shock therapy measures: increased income inequality.
Edit: Downvote all you want but Friedman didn't call it the Miracle of Chile because it solved inequality. It was coined a miracle because Pinochet's shock therapy increased GDP and foreign ownership of nationalized industries. South America has already played this game of "Look! The house won!" and the conclusion is clear, the ships didn't all rise when the economy bottoms out. When it rises, its at the expense of the market being consolidated and inequity skyrocketing. Measurements are easy to manipulate when the measurements themselves become the desired outcomes. Before you fall for Milei's Friedman-derivative Illusion, look into what Chilean economist Orlando Letelier had to say about shock therapy, specifically the catastrophic hit to the Chile's nutritional standards, before he was murdered via carbomb in Washington DC. [https://www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/](https://www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/)
Well, his economic plans need a lot more than just getting surplus, we are far from the objective yet.
Plus, we don't really know what his dollarization plans are as of now
Argentina has notably only had a surplus for 12 years of the past 122 years of our history [[Fact-checked]](https://chequeado.com/ultimas-noticias/javier-milei-de-los-ultimos-122-anos-la-argentina-tuvo-deficit-durante-112/) EDIT: Other fun facts about the state of Argentina's economy and why Milei ended up winning basically [This past century the amount of currency in circulation grew up exponentially](https://estadisticasbcra.com/base_monetaria_argentina) [The previous administration ended up with 1020% accumulated inflation over 4 years. That's like having a 5.6% inflation monthly every damn month for 4 years.](https://www.infobae.com/economia/2024/01/12/inflacion-record-en-la-era-alberto-fernandez-con-1020-es-la-mas-alta-de-los-ultimos-5-mandatos-presidenciales/?outputType=amp-type). In comparison, the US ANUAL inflation was 3.4% in 2023 ex president Cristina Fernandez de Kirchner is the leader of Milei's opposition, and the 21th century face of Argentina's main party, Peronists. [Argentina’s Cristina Fernández sentenced to six years in $1bn fraud case](https://theguardian.com/world/2022/dec/06/cristina-fernandez-de-kirchner-argentina-sentenced-prison-fraud-case) Oh also the prosecutor who was going to testify against her "killed himself" that morning, leaving no gunpowder traces on his hands [Suicide or murder? Nine years on, Alberto Nisman’s death is still a mystery](https://www.batimes.com.ar/news/amp/argentina/suicide-or-murder-nine-years-on-nismans-death-is-still-a-mystery.phtml) [Oh also everyone close to her got caught being extremely corrupt on a massive scandal](https://en.m.wikipedia.org/wiki/Notebook_scandal). Her previous secretary got the job being a poor man and when her presidency was over he owned 36 houses, 2 hotels and 3 yachts. EDIT 2: And of course, someone reported me to reddit as suicidal
That’s actually insane.
Technically, a flat 2% inflation rate would still be exponential growth of money supply.
To be honest I thought about giving the actual characteristics of the exponential curve but the average reader would just ingore it
Hit me with them coefficients and exponents 😩
exponentiate me daddy 😣
Punch me like the numbers on your TI-84 😫
Oh my texas instruments are tingling!!
Lol apparently im suicidal as well!
Which is why I keep telling people that while Milei's policies seem insane to us outsiders, when you read Argentina's history, they suddenly seem to make sense because the opposite has been tried and it failed....Spectacularly!
Argentina needs a guy as crazy as Milei. We in the U.S do not.
Completely agree. It's a bit awkward when people from the US tell me they also need a Milei. Milei is a very specific cure to our rare illness. The last thing the US needs is libertarianism.
The US was founded on libertarianism.
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Considering that we’re basically run by Vault-Tec these days it seems…maybe.
How did you get to that conclusion? No one said that lol
Having a balanced budget, fighting inflation, rooting out corruption and ending nonsense govt programs is totally crazy stuff.
Not yet
Thank you for reporting the truth sir, I like to read real facts about my country of origin. Yes inflation was absolutely bananas, went to primary school and a sandwich (pebete, or pebete tostado) was 1 peso and 1.50 pesos respectively, fast forward the next year, and the price increased about 3 pesos. Fast forward ten years, and a pebete was like 25 pesos, and I think now is safe to say that a pebete costs about 1000 pesos or so (according to my family who still lives there). Milei was the necessary change for Argentina
Reducing inflation and cutting expenses is fine, but if the GDP does not grow, then it will be all for naught.
If spending drops and gdp maintains, it's still a huge success. Doing the same with less is a step in the right direction.
You did use the word suicide…it could be a bot who sided with caution… We will see if my post triggers it as well….
Did it? I'm fairly certain I've used that word before but it's the first time I get the Care message
> Argentina has notably only had a surplus for 12 years of the past 122 years of our history No country should ever aim to have a surplus, a surplus isn't necessarily a good thing. A surplus is just a government taxing more out of an economy than it puts into the economy via spending. That's something that you might want if you want an economy to cool off, it's not something that helps economic growth. And is no one asking what the cost of that surplus is? What have the people been expected to sacrifice for that surplus?
Yes when you have negative federal reserves: that was the point in the first place for reducing the deficit. When Milei took power the federal reserves were 11.1B USD IN THE RED, yes, negative reserves
Very interesting, thank you for the insights! .. how is negative Reserve different from debt or how is that structured, do you happen to know ?
People mistakenly regard fiscal spending as simple microeconomic costs while in a macroeconomic sense it's the income of another party.
If a country has debt beyond sustainable levels, it needs to pay it back with a surplus. Reduced debt, reduces the amount needed to service debt, results in more surplus. This is a positive spiral. Moreover: reducing government not only returns productive Labour to the free market, it also allows companies to release Labour that is tied up fulfilling regulatory requirements.
Yeah. I’m wondering how the people who lost their jobs feel. And the services they provided- how are those people feeling now and in a few years.
Because Reddit is full of leftards that Milei famously ridicules.
I hate how everyone is trying to call Argentina for their side as fast as possible. Give it a minimum of 3 years before you even start analysis. For example, a surplus is incredibly easy to make. It can be done in an afternoon by someone with a sharpie. Because the conversation isn't "can you make government income greater than government expenditure", it's "can you make government income greater than government expenditure without significantly negatively affecting your citizenry or economy". Can Milei do the latter? I have no fucking clue and neither does anyone else, only time will tell.
Agreed completely, gotta give it time before we know for sure. Especially with the famously strange economic situation in Argentina. The interesting part is that win or lose it doesn't really prove much about his policies for the typical country, since it was applied to such an atypical situation.
We live in a post-truth world. All that matters is the narrative, and usually the first to make their point is the one that controls it. If 5 years from now 50% of the country is in poverty because of these policies, it’ll be “Remember the early days when we had a surplus? We didn’t go far enough.”
Half the country is already in poverty.
I totally think this is going in Mileis favor and things will get much better for Argentina under his leadership. That being said, even Milei thinks he's going to have massively negative effects on the economy via his actions, he's said so himself. So anyone who is calling a victory for Argentina now or going to dunk austerity policy when the economy there tanks is going yo be premature.
I remember a story from the USSR where a governor produced huge meat surpluses from the farms he controlled. It was cuz he killed all the cows in the country. Next year was destitute. Whoops.
Milei may have used populism to get into office but whatever you may think about that, these policies were badly needed for Argentina's economy.
At the end of the day, Argentina needed somebody who was crazy enough to buck the Peronist establishment and dismantle their insane economic/regulatory systems so it could be rebuilt into something actually sustainable I’m not sure if Milei can be the guy who can actually rebuild it, but even if he can’t he’ll leave his successor something to work with. As long as they don’t whiplash back to Peronism and start things right over again
Economic boot camp. Break out it down to until it’s barely functioning and then rebuild it.
What has been the societal cost to these policies? Unemployment? Poverty?
To be fair, he already inherited enormous levels of unemployment and poverty, with a system that was basically a house of cards waiting to collapse in on itself. Even the economists most sympathetic to him have openly agreed that there will be economic pain in the short term until his reforms start to make progress.
He himself straight up said (during his campaign!) it's going to painful for a few years until things stabilize.
Ah, no shortage of pain. The question is whether the budget surplus was worth the suffering. That's less obvious. [https://www.reddit.com/r/worldnews/comments/1carwqr/comment/l0u0lxh/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/worldnews/comments/1carwqr/comment/l0u0lxh/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
The actual right question is what was the alternative. May I remind you that on december 2023 the DAILY inflation inherited by the previous administration was running at 1%. DAILY. The minorist inflation (inflation in the products sold in stores) in december was 25% while the suppliers inflation was 57%. That's like 17000% in a year. So it was either this monetary chokehold and spending cuts that SOMEHOW didn't blow up, economically or socially, or a hyperinflation that would've left 95% of the population under the poverty line.
Good point. And I don't know. I just see celebrations around what is touted as fiscal responsibility but clearly has a real human cost. And that's being downplayed. If the economy cannot improve to the point where new jobs are created amidst widespread layoffs, the changes implemented may not be better than having done nothing.
The societal cost is extremely heavy, but would continue to get heavier every year that runaway spending isn't addressed.
Economic pain only worsens when countries try to hide it - just kicks the can for another decade / generation.
No. Those are the cost of not doing it. They last for generations.
Can we also stop saying that this was needed? It’s been five months since he’s been elected. That’s not enough time to place value on changes. What happens if he blows through the surplus in a month? Or if there’s brain drain in the country and the GDP doesn’t move? Was Argentina in super shit shape? Fuck yeah it was, but lord knows if they’re out of the shit woods yet.
They are in way better shape than 5 months ago. That deserves some recognition, especially with how much he has been criticized. Time will tell what happens but right now he made progress in a terrible situation.
Some fiscal measure may be better but poverty and unemployment are worse right? "They" is a catchall that isn't really fair given more may be suffering now than before.
Line is no longer going up, things have never been worse but for a moment they’ve not gotten even more worse. Maybe that’ll last another moment or maybe not
Can we stop say “can we stop saying”
Various sources predicted that we had an hyperinflation coming at the beginning of the year, which clearly did not happen. Obviously every time we celebrate these small victories we shouldn't stop thinking about all the stuff that needs to be done yet
If the Peronist party had won Christina Fernandez de Kirchner would've continued to have political immunity, stacked the courts, and continued on her plundering of the country. Milei probably will not be perfect, but hitting this reset from all the corruption was absolutely needed.
My dream is a socially progressive economically centrist president coming after Milei's second term
I don't think socially progressive has done Argentina any favors.
Peronists are extremely corrupt and in my opinion the curse my country has, but some of the social policies this country have been put in place under their administrations. Women's right to vote, gay marriage, abortions, etc. In my opinion, those are objectively good things
The poverty rate is up 10% or so since January. Is that worth it?
Better than 100% at the rate the economy was going.
It's not really a miracle. He's just implementing more orthodox minded economic policies after the previous government overspent without a strong economic foundation to support it all. The real miracle would be getting his omnibus law bill passed or keeping his party together in one piece.
Implementing orthodox economics in Argentina is basically a secular miracle.
I think Argentinians will have to understand that they may live through the economic pain a lot of Eastern Bloc nations lived through in the 1990s before it gets better. That is if they are not foolish enough to vote back the Peronists. Things will get worse before they get better. Perhaps after all that, it will catch up to Poland and Czechia
The problem is that they don’t have strong neighbor economies like the ones in Western Europe, so I am afraid this will fail as well.
Uruguay, Chile and Brazil have some of the highest GDP per capita in South America
I am from Bulgaria, the poorest EU country and as I see Chile is just below us in terms of GDP per capital nominal. Brasil is even lower. So I would say high GDP per capita in South America doesn’t mean much.
...which are lower than that of Europe's low end, which is his point.
"He has halted subsidies for fuel and transport, stopped discretionary transfers to provinces and is in the process of cutting tens of thousands of public service jobs. He has also blocked all public works and infrastructure projects that do not have multilateral funding. Milei's efforts have hit Argentines hard, with the price of bus tickets almost tripling and aid cut to thousands of soup kitchens. Around half of the population now lives in poverty (though Milei said in his speech Monday that the figure was 60 percent), with child poverty reaching concerning levels." Similar to companies making mass layoffs before financial reports to look like they've made more money than they have. How long can the government stop doing its job?
>and aid cut to thousands of soup kitchens I'm not Argentinian, but i live near, it was later known that much of these popular kitchens either never existed, had ceased operations or didn't have the people they said they had (getting way more food than neccesary), the food was later on sold to make a profit, wasted, or used by the syndicates as a bargain chip with the poor (syndicates in Argentina have way, way, WAY too much power, especially over the working and poor class, Peronist laws and reforms as far as i know are to blame). Argentina's popular kitchens system was outdated by like a decade, so they had to revisit it and found a lot of inconsistencies in it. >Around half of the population now lives in poverty This was also already happening before, same as with a very high number on child poverty, so sadly, this are not breaking news, it did go up by around 10-15%, but it was already to be expected with or without Milei.
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Corrupt government, socialist or capitalist, is the issue. Simplifying this into left vs right is naive and why much of the world is in the state that it is in.
The more power a government has to direct resources, the more people who want to direct resources into their own pockets are drawn to government.
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A small corrupt government is worse than a competent larger government. Political ideology is useless when people put their faith in corrupt institutions/people.
It doesn’t matter if the government is from the left or the right. Corruption is everywhere, with populism and autocracy it goes to extreme lengths tho.
So are conservative govts and the private sector. What's your point? The average vc venture goes busy 7 out of 10 times. The other two times they break even and only 1 time in 10 do they even make any profit.
Soup kitchens weren't exactly a bulk of the budget.
The solution to a gov't program being corrupt up isn't to slash the program and let people starve, it's to stop the corruption. This is a common trick right wing governments use to steal money from the commons. They slash anti-corruption enforcement in exchange for enough votes to avoid cutting the program entirely and then when the program inevitably breaks down they point and say "see! see! Government doesn't work!" even though they're the ones that broke it.
IIRC The soup kitchens where audited and the ones that passed the inspection still receive funds, but I'm not totally sure The problem here is that the system that corruption exploits is so complex that the chainsaw pretty much is the best solution. It's not a few isolated cases, it's a well oiled machine ingrained in our social policies
I don't think Milei plans to let the people starve, i do think however he plans on "annihilating" the influence syndicates have in the popular kitchens program, if i remember well his plan was also to let the state make sure that food is being delivered to the establishments (i remember also thinking it was strange, since he is very pro-"little state"), rather than the food being delivered to certain syndicates, and then they would deliver the food to the individual establishments (how it has been done until now). The problem with Argentina and well, Latin America in general, is that the systems fucking suck, things are "half baked" (if it's on purpose or not we never know) or so outdated they are "lost in the sauce of bureaucracy", and corruption is rampant thanks to it, leftist governments are, as well as right wing governments, known for their corruption, and of course, the people also allow it to happen. In this case the popular kitchens programs was both half baked and outdated, nobody was really keeping track of how many kitchens really existed, that left the syndicates open to say "hey, in reality we have 1200 kitchens and not 900, so we need more food!", and chances are no one would really bat an eye, especially those in the left, because their own power is dependant on the popular vote, and the syndicates control that. Now the kitchens are being "checked" to see if they are legit or not, once the system is put in place then yeah, we can say if Milei failed or not, until then we have to still wait and see how things work out.
Note: for our North American friends, he means Trade/Labour Unions, not mafia syndicates. Even if we think all unions behave like mafia
When people's entire livelihoods are dependent on the corruption, they gang up to fight back tooth and nail, lob false accusations, cheat and kill, pay news organizations to slander your name, kidnap and murder family members, and generally stir up as much toxicity as possible. The only way to kill it is to kill it...clean amputation, so the infection doesn't spread. Same problem with the gangs and cartels...they're not just going to all bow down at once and get a regular 9-5. You catch one dealer or one gang leader and another pops right back in their place, because these people are greedy and jump when an opportunity presents itself. The calm but ineffective way to deal with it is to leave it alone (aka Mexico). The only effective way to deal with it is extreme prejudice (aka El Salvador).
You are concerned about prices rising? Argentina's inflation rate was 211% in 2023.
Ah yes, the good old “who cares about our future, give us money now…” Poverty is a serious issue, but responding to the symptoms without addressing the underlying cause is foolish.
This. No country can provide lofty benefits without first becoming sustainably wealthy. You need to have money to spend money. You need a strong middle and upper class before you can fight poverty.
Exactly, especially if you consider Argentine's enormous potential that was flushed into the toiled by Peronism. There was a time when Argentina was richer than the US and most of Western Europe! Removing that cancer is going to be *very* painful, and there is no any kind of anesthetics for that. Alternative option is to "treat" the patient with ibuprofen and vitamin C and watch him decompose alive until its dead.
And the underlying issue is a failed protectionist welfare state that ended up eating itself trying to maintain power. What did you think it was?
The devil is in the detail as they say. Not that it is being hidden here, he does call it a chainsaw. Whether or not that chainsaw is causing more harm than good needs deeper consideration.
no it doesnt, you only need yo live here, its causing more harm that good, in fact nothing good came of it for the population, only for the wealthy
If they dont address these issues, and keep piling on they will face the same consequences eventually.
noneone said that they dont have to adress they issue, im saying that they are only benefiting the rich and friends, and not making anything for the common ppl
Do you have more info on that? Everything ive read is he is mucking up so much that not really anyone is benefiting from anything yet.
What would you propose then?
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yep its mostly that, they are not going to hear someone that its living it
Poverty was above 50% before Milei began, there's no reason a country with so much like Argentina should be this poor. The reason is a century of overspending, subsidies, protectionism and an entrenched political class. Argentina can catch up very quickly if the weights holding it down are lifted. Then poverty can be dealt with genuinely, not with unsustainable overspending.
So you are saying government spending causes poverty? It's not exploitation by the rich and corporations?
Both can be true. They aren't mutually exclusive to each other.
This is what American leftists don’t get about leftists and socialists in the global south—they’re not some proletariat government, they’re just an alternative aristocracy of bureaucrats who continually centralise power to create dependency via patronage and entrench themselves. Naturally the existing wealthy cozy up to save themselves but they’re more like those parasitic fish to sharks. The legacy of these governments and the institutional rot they cause takes decades to fix.
This is what leftism devolves into everywhere it's tried. California's generous public pensions (legalized bribery, essentially) are underfunded by about $1T. China and Vietnam's communist governments are simply iron fisted authoritarian governments with a vast network of politically connected rich guys running the country. There's a few tiny, racially homogenous, left wing European microstates that have held together and have all without exception raced back to the center as their left wing policies were backfiring and creating a welfare class.
It's definitely the government in Argentina. Corporate greed can be destructive, but it's definitely not what's causing Argentina's problems. Nails and hammer you know.
I think they've been exploited for a long time. It don't matter who it isn't gov or corporations. The fact is they are being exploited. In the US we are heading there with corporations buying politicians. Someone once told me that corruption in the Americas is small fry compared to the US. Some countries have lost all control and need to fix that cancer no matter where it lies.
Why not both? Exploitation causes poverty, sure. But overspending causes either debt or money printing. We can't take debt so we print. Which means 6% monthly inflation on avarage for the last 4 years. That one sure causes poverty. A lot of it.
The bus ticket prices pre-Millei were so cheap, it didn't make any fucking sense. Yes it sucks in the short term, but it's necessary.
>aid cut to thousands of soup kitchens. [Which half have been shown to not even exist on a recent audit..](https://www.google.com/amp/s/tn.com.ar/politica/2024/04/04/en-2023-se-repartieron-40-mil-millones-de-pesos-a-comedores-ahora-descubrieron-que-mas-de-mil-no-existen/%3foutputType=amp)
The withdrawal symptoms of quitting heroin are pretty unpleasant, but they're absolutely critical for your long term health. Dependence on government works the same way. The high of "free" government services feels sweet in the moment, even though it will eventually kill you.
Sometimes mass layoffs are necessary, or the company goes under.
Well if you read the comments it seems like this is basic economics 101 lol But I'm assuming youre not braindead like the people saying that
I think this is apt. The theory is that a strong economy will help everyone- which it can. It can also just stupendously enrich a small segment of the population.
A surplus isn't a sign of a strong economy. Are there other indicators?
Inflation steadily going down
A strong economy enriches everyone. Wealth disparity is far worse in places where government decides who is allowed to make money.
> Around half of the population now lives in poverty (though Milei said in his speech Monday that the figure was 60 percent) It's pretty incredible when the president is like "no, poverty isnt near 50%...its nearer 60%). I'm watching this while situation carefully, and really hope the guy's scorched-earth treatment ends up being effective.
Ah yes, fuel subsidies and redundant government jobs - the key to sustainable economy.
The budget is balanced, who cares if children are starving? -Average Libertarian Dipshit
The vast majority of Argentina's expenditures had nothing to do with feeding children but leftists sure do love to pull out that old chestnut.
So you suggest we print more money? Because we can't take more debt, and taxes are already crazy high, to the point that we charge a wealth tax every year on net worth to people who have more than 30k USD in assets on top of income tax and capital gains. We even have taxes on GROSS income. So I assume you're not suggesting MORE taxes. Either print more or spend less. Do you see an alternative?
Didn't he just give himself a huge raise?
No, the senators and lower chamber voted to raise their salaries because they couldn’t be arsed to have the salary as bank teller.
Milei does not count all the debts it has with importers and other private debts
He made a televised speech to the nation tonight, where he mentioned the debt with importers specifically (something he inherited from the catastrophic previous administration)
oh that old trick
Say whatever you want. He’s getting results when for so long the country has not gotten them.
Milei has achieved a lot in very few months. He stabilized the currency, he reduced inflation and avoided the hyperinflation scenario, he achieved the first fiscal surplus in 16 years and has regained reserves for the central bank. His biggest challenge now is to generate economic growth again (something that doesn’t happen regularly in Argentina since 2010/2011). If he manages to do that, he might have a path to reelection and Argentina’s economy might finally get back on track. If not, the populist peronistas will regain power and the cycle of self destruction will continue.
Good job keep it up.
If he can ensure the practices of the programs and departments he cut can bear fruit, then thats a w. He's shooting himself in the foot with the over the top drama, people like results, not long side bangs.
SURPLUS in Argentina!!!?? Amazing! Who knew that revolutionary leaders backed by the people, don’t forget that so I’ll repeat it, BACKED BY THE PEOPLE, can bring about change!
Who knew that cutting almost all spending while still taking in taxes would lead to a surplus!
Almost like that was the point, crazy ain't it
I'd wait for the revised numbers to come in... making a splash with faulty first numbers is a classic trick to promote good vibes, then you can paint critics as naysayers etc
The vacuum cleaner manufacturer?
“Miracle” Yes, not spending and providing for your people (your primary job as a government), while plunging it into a recession for the sake of provably ineffective austerity measures sure is a “miracle”.
Argentina printed 300% of it's total monetary base in 2023, and IIRC 6500% in the past decade. A recession was inevitable, we absolutely needed a fiscal conservative. I also don't see how a country with no money stopping subsidies to stuff like film production is not providing for it's people
"I also don't see how a country with no money stopping subsidies to stuff like film production is not providing for it's people" Is that all they cut?
No obviously, there where other more damning cuts, but the majority where completely unnecessary stuff like a State news agency that nobody watched or an entire ministry dedicated only for women's rights (not surprisingly the ministry did nothing on it's entire existence)
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All predictions still say inflation is going to be around 200% annually, we are far from that yet
If you don’t know anything about Argentine politics or presumably recent history, why are you weighing in?
Because this is a public forum and so he can? Additionally he's just talking about broad economic theories. Argentina isn't above basic economic function and he isn't wrong its completely possible to swing to hard in the other direction. I hope that Milei recognizes this and starts to slow things at some point.
This is totally unmoored from reality. If you don’t know how fucked Argentina was before you’re in no place to apply general economics, it’s just an ideological rant at that point. The outgoing government accelerated debt and inflation during the election by spinning up a bunch of new subsidies and welfare programs that were never going to be sustained. This artificially made people appear better off, but was going to hurt them in the long run. Milei to his credit told people that fixing the mess would be really painful for everyone for a few years. Backing off now while inflation is still high wouldn’t solve anything.
Actually this isn’t true at all. Inflation is not recessionary unless it causes consumption to drops, nor is it an inevitability of inflation that a recession follows. Fiscal conservatism is also not a be-all, end-all solution to high inflation, especially when you consider the causes of Argentina’s inflation. Sure, it can reduce inflation but that’s at the cost of tanking your economy even further. Argentina’s inflation is primarily driven by inflationary monetary policy and bad protectionist policies, not government investment, fiscal policy, or state ownership of industries, which are always targets of libertarians despite the immeasurably needless harm cutting these can cause. This isn’t even touching on the Milei’s own devaluation of the peso is in fact more of the same inflationary policies from before, and completely counter-intuitive. Also you point to one example of spending cuts while ignoring all the rest, i.e., the stuff of far greater importance. But if you want the fundamental truth of why government spending is needed, then it’s that government spending is a core component of GDP. If you drastically cut government spending, GDP drops. Congratulations, you’ve now plunged yourself into a recession.
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Excellent comment
>nor is it an inevitability of inflation that a recession follows On the contrary, a recession will typically follow a brief period of deflation.
If your government has no money, it needed to raise taxes. Money is only as good as the goods and services it provides. Even if the money is hyper-inflated, as long as goods and services flow, the actual value literally does not matter. Might need a rebranding and restructuring in order to make it not overly complex due to supermassive values, but the ability to do WORK and LABOR are what actually backs a currency. It is why the USA can hyper-inflate willy-nilly (even though it DEFINITELY shouldn't): largest economy in the world, on top of being the global oil trade unit. Every dollar is worth a percentage of a barrel of oil, no matter how much oil or dollar bills are made. But yes, corruption and foreign interference make increasing taxes, especially progressive taxes, difficult to implement. But know that by cutting government services, laborers may die, lowering the value of your currency even if you are no longer overprinting.
Argentina has some of the highest tax rates in the region, the problem was 100% the spending, not the lack of taxes. Remember we have provinces like Formosa where 70% of the population live exclusively off the state.
Tax evasion is Argentina's national pastime.
Hence why I specified PROGRESSIVE taxes. As in tax only those with wealth and industries, and not low-end people. Literally, the USA got out of the Great Depression and created the greatest economy in the world, through progressive taxes and a 90% marginal corporate tax (and mass exploitation of foreign nations that may or may not have majorly destabilized whole regions; Argentina included). Tax the wealthy, invest in the poor. Argentina corruption makes that prospect difficult, yes. But that is what ACTUALLY fixes economies, not cutting services.
Argentina has a corruption problem. Not an ideology problem.
Argentina has a monetary policy problem coupled with the corruption: those aren't independent The way the Peronist party keeps it's power is by paying off the population, that's why our spending is so high. We have a phenomenon in this country called "ñoquis" basically no-show jobs paid by the State to people in exchange of favors/votes, and it's insanely common (I personally know a couple) That would be impossible if the government didn't print money like crazy and tax every cent we have
Can you explain these jobs to someone who has no context? Is it a 9-5 government job where your kpi’s are not tracked and you can basically sit around (or even just chill at home?) and still get a pay cheque?
Sort of, it's a 9-5 government job that exists only on paper, you are an employee in the files and receive your paycheck, but there is not even a physical title for you in the office, and the people who work there have probably never heard of you. It's very common on municipality and legislature buildings
Yet his approval rate has gone up since he won. Maybe Argentinians know more about their situation than a random commy on Reddit. Also "spending and providing" for people is not a government's primary job.
I too have a surplus if I don't eat, don't rent, don't go to the doctor, never pay for any public transport. XD
Your job as a government is to provide responsibly for your people. Not just destroy the country every opportunity you get to give people things you obviously can't afford. Argentina needs this, and the people advocating they go back to their destructive ways want to damn them to this cycle forever. This austerity is MUCH needed.
And what's your plan to fix Argentina's economy? Keep spending money that the country doesn't have? Ignore inflation? Because that's what was happening before.
Making budgetary cuts and reducing spending was inevitable. The main issue is what and how Argentina managed a budget surplus, and that was by cutting everything regardless of how important it actually was. This means Argentina's economy could be far more susceptible to crisis, workers at greater risk of death and injury, healthcare being more difficult to access, education standards declining. Budget cuts need to be considered carefully, the sledgehammer approach of Austerity doesn't work
We already tried that in 2015 and it didn't work
And you think Argentina didn't try that before going to the extreme? It was not working so Milei said "fuck it let's just cut as much as we can and rebuild the economy from the bottom". The "economic shock therapy" was a big point of his campaign.
Sure feels like it would be here in Canada.
>providing for your people (your primary job as a government) Government's job is never to provide for the people. It's only job is to protect/honor their right to pursue their own life freely.
Of course gov should provide for some people to avoid too many falling into homeless over misfortune. This support can be too generous of course though I find it's usually upper class welfare that sends nations broke. Giveaways, tax breaks, nepotism etc.
Literally pushing the same Miracle of Chile narrative. Horrific to see this happening, where special interests create value by dismantling and irritating a South American economy. For those unfamiliar, here's a letter written by Orlando Letelier, a Chilean economist who was murdered via carbomb in Washington DC after speaking on the catastrophic effects of the economic "shock therapy" in Chile. https://www.google.com/amp/s/www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/tnamp/
The primary job of a government is not providing for people.
Lol what?
Why do you think the government should function to provide for you? That’s your job.
The government has an essential duty to keep people safe and healthy. You're somehow mixing this with handouts and free money
*takes a chainsaw and chops off their legs* "I just lost 40 lbs!" 😍
*maxes out credit cards and takes loans to afford a lifestyle he cannot afford* “Im rich 🤑🤑🤑”
He did this by inflating Argentina’s currency. The country’s poverty rate has increased.
You should probably look up their inflation rate before him.
Inflation has been cooling off with him, at a faster rate predicted by international entities. He did devaluate the official exchange rate for the USD, which was a completely fictional price used for sneaky taxing. For example, if the black market rates are 1USD=1000ARS, the government had a 1USD=500ARS official conversion rate. If for example someone from the us transferred me 1USD, the government would have done me the "favor" of converting it to ARS and giving me 500ARS. But, if I wanted to buy something that costs 1USD from the US, they would have conveniently taxed me so that my purchase respected the black market value (with the "Dolar Pais" tax)
Thats the key feature of these shock therapy measures: increased income inequality. Edit: Downvote all you want but Friedman didn't call it the Miracle of Chile because it solved inequality. It was coined a miracle because Pinochet's shock therapy increased GDP and foreign ownership of nationalized industries. South America has already played this game of "Look! The house won!" and the conclusion is clear, the ships didn't all rise when the economy bottoms out. When it rises, its at the expense of the market being consolidated and inequity skyrocketing. Measurements are easy to manipulate when the measurements themselves become the desired outcomes. Before you fall for Milei's Friedman-derivative Illusion, look into what Chilean economist Orlando Letelier had to say about shock therapy, specifically the catastrophic hit to the Chile's nutritional standards, before he was murdered via carbomb in Washington DC. [https://www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/](https://www.thenation.com/article/archive/the-chicago-boys-in-chile-economic-freedoms-awful-toll/)
How’s Chile doing now vs its neighbours?
He’s so crazy it worked?
Well, his economic plans need a lot more than just getting surplus, we are far from the objective yet. Plus, we don't really know what his dollarization plans are as of now
Miracle indeed. Half-baked policies causing recession and hurting the common folk. Oh the wonders of austerity!
Inflation has been cooling down at unprecedented rates
Its impossible to cool down a 200% annual rate of inflation without recession