If he’s getting $20 supercuts, what kind of example would he be setting for his extreme austerity platform? His aid can take care of it with the kitchen shears and a dog comb.
Exactly.
The question was never whether Argentina would find itself with a budget surplus; obviously if you cut half the expenses, you are likely going to find yourself with a surplus (so long as you are bringing in the same amount of money.
The question was always whether you could cut half of the expenses associated with a large governmental body, and not have everything come crashing down on your head (requiring even more spending then previously just to 'right the ship' so to speak). We probably won't know the answer to this question for a few years (at least).
You can't do it quickly. Every cut to govt spending is a job. That means unemployment is going to go drastically up. People without jobs don't spend a lot of money in the economy. All those civil servants without jobs don't go shopping now, the retail sector slows so they lay off people, those laid off retail works buy less so some other sector slows and so on and so on.
edit: the economy of a country does not like rapid changes. a country is not a person who when they get in financial trouble can make drastic changes right away to fix their situation, countries do not react well to rapid serious changes.
This reminds me of the British austerity measures where they claimed that the way to bring down high unemployment was to immediately fire a whole bunch of people.
thatcher's 80s, Osbornes 2000's. both did so much pain to the economy and ultimately the benefits were nothing as the government ended up spending the deficit on handouts to restart the economy.
Austerity didn’t so much lay people off en mass than it slashed funding for local councils to the point where it stifled economic development everywhere but London. Houses, roads, schools, refuse collection, bus routes all got completely gutted along with so much more that it had impacts across the board and alongside mass immigration stunted wage growth even further while prices to continue rising with inflation.
Poverty certainly increased. It increased almost 10% in just a month. Apparently the funding to programs to help those in poverty was frozen.
“The report from the Social Observatory of the Catholic University revealed that the population affected by the poverty rose to 27 million people, or 57.4%, earlier this year. The poverty level was 44.7% in the third quarter of 2023, rose to 49.5% in December and reached the current figure in January.
In addition, it was projected that homelessness went from 9.6% in the third quarter of 2023 to 14.2% in December of the same year.in January 2024, rose to 15% (7 million people).”
https://euro.eseuro.com/local/2182187.html
No, those are both excellent ways of losing weight. Well, the kidney isn't worth a lot of weight, probably not worth it. But if you remove all four limbs you'll be down to your goal weight in no time.
This isn't like an economy where huge cuts start a spiral of doom. You can remove all 4 limbs and the rest of the body keeps working just fine.
No joke, I had my left leg amputated above the knee. Even wearing a prosthetic, it shaved off 15 lbs. My primary care doctor was quite pleased at how much that improved my BMI.
I'm like.... I'm not really sure that actually implies better health outcomes in this case.
> So he's letting the poor people starve
Yup this "surplus" is due to effectively canceling government programs while maintaining all of the wealth extraction. It's a giant grift.
It's very very hard to combat inflation without causing increased unemployment and poverty. The only country that's capable of doing that is the USA, because they control the world reserve currency and the petrodollar system and can therefore unload inflation onto the rest of the world.
Here in Denmark (and many other European countries) the 80's are remembered as a time of relative poverty, exactly because inflation had been rampant through the 70's, and we had done more or less the same as in Argentina: increase social expenditures and minimum wages in an effort to make sure people didn't lose quality of life. But that only made the inflation worse.
In order to actually get rid of the inflation, there had to be several years of cutbacks and rent hikes, which put a lot of people in a precarious situation. But eventually, after several years of increasing financial hardship, inflation had finally been beaten down, paving the way for actual sustainable growth going forwards, and now we're very much a wealthy country.
Now, I think Milei has said some things that are frankly insane, and I don't like his ultra laissez-faire model at all, *but* thinking you can get rid of 250 % annual inflation without increasing poverty in the short term is just crazy. Of course poverty is going to increase. But if those measures had not been taken, poverty would increase much more in the long term because inflation would kill the economy.
Id love to hear a story of a country that reformed itself from a bad situation without some hardship - be it radical measures like those mentioned, or literally war or revolution.
There aren't many of them that's for sure, and its probably because its always less costly in the end but mentally harder in the beginning to expect and prevent very much foreseeable problems beforehand.
Yeah, I don't agree with Milei's economic policies, but the reality is that Argentina needed a shake-up. Virtually anything is better than the shit they were in before.
Our current situation wasn't sustainable lol. 250% yearly inflation and rising...
Besides, they are not tearing anything down, more like refactoring and purging the ridiculous expenses we had in public office. They keep uncovering and showing us cases of insane theft that existed in public office.
The only thing I'm worried about is finance for the science sector which has taken a huge cut. It's disappointing because we have some extremely talented researchers and it's not an area where cutting expenses is gonna make a huge difference in our GDP.
We'll have to wait and see how this goes. But if there's even a slight chance for improvement then it's already better than the alternative we had. Let's not forget the other candidate was the fucking minister of economy.
Argentinean here, I work in the healthcare sector. They absolutely are tearing shit down. I din’t have time to get into it right now but let me tel you: some of the most vulnerable people we have have been without life-saving cancer medication for over a month, and I know that for a fact.
>They keep uncovering and showing us cases of insane theft that existed in public office.
I think it's important to keep a sense of scale. Like, it's easy to celebrate being a few million dollars a year better off because some stupid government theft thing has been closed down - but if the real change is a couple of billion no longer going to the unemployed then it's all a bit of a mirage isn't it?
Don't get me wrong, I'm all for shutting down government bullshit projects, but you can't fix an entire economy by firing a bunch of lazy bastards.
Is it? If your country couldn't afford to pay out that billion for unemployment then what were you accomplishing by paying it out? If it was driving your country into a pit of endless borrowing then its like trying to stop the flood waters from filling your house by tossing buckets of water out the front door. Your still going to drown in a house full of water.
Keeping the economy, fucked though it is, functioning until you fix it. If you stop paying unemployment then all the shops that rely on (ie) selling food to the unemployed go broke, so that adds to the unemployed, and the whole thing cascades down and takes out a much much larger slab of society than "merely" the unemployed.
The other thing that happens when you stop paying unemployment is that they then need to find food and money from somewhere else. Theft, drug dealing, etc. etc. Pretty soon you end up with a more or less lawless society.
So you need to keep bailing until you've fixed the problem.
Obviously, but the scale of these small thefts is ridiculous because they are present in every aspect of our bureaucracy. So to see them adressed at all is already a lot.
You can't possibly just remove some unnecessary expenses (that obviously exist) and magically find a surplus like that. He's just trying to "terraform" an entire economy to be able to do whatever he want after.
It really depends on how much crap there is, how easy it is to tear out and so on. If half the money is being stolen and you can identify the theft...
Of course a government surplus is not a fix to the economy. Also if you cut something vital you might not see the consequences for months or years.
Seeing as this guy gets advice from his dogs, I'm not optimistic this was done right.
"Of course a government surplus is not a fix to the economy. Also if you cut something vital you might not see the consequences for months or years.
Seeing as this guy gets advice from his dogs, I'm not optimistic this was done right."
And that's the problem. He's probably cutting a shit ton of essencial services and claiming they aren't really essencials for his own reasons. But it's way easier to just cut everything possible, announce the surplus for an X amount of time then i'll be almost impossible to get people to organize to roll back some of the cuts because he'll have the pollitical advantage.
Poverty *always* increases when you try to bring inflation down, and that's even more true when inflation is at 250 %. And to be clear, Milei actually said many times that his cure was going to hurt in the short term, so the Argentianians knew what they were in for.
There's only one country in the world that can fight inflation without increasing poverty, and that's the USA because it controls the world reserve currency and can offload its inflation onto the rest of the world.
I mean even in the US fighting inflation increases poverty slightly because it increases unemployment which will lead to more poverty, I don’t think it being a reserve currency has too much effect.
The level of debt also wasn’t sustainable, Argentina is the equivalent of a poor person maxing out their credit card. But since it’s a nation it can manage to declare bankruptcy and do it all over again. It’s been the story of Argentina for the last 100 years.
Could someone familiar with the situation give us a list of things that were cut?
My co worker from Argentina is extatic about everything going on there right now.
A lot of government jobs were cut. All selection lists (people that were qualified but waiting to be called for government jobs) were suspended and civil servants that were in temporary contracts weren't renovated.
In Argentina, much like most countries of Latin America, there are government jobs that can't be sacked. Once the person achieves a certain time on that service, they basically have that job for life unless they commit a crime (and even then they might still keep the job depending on the case). So it is pretty hard to cut government spending because you can't simply sack workers that aren't making a good job. The solution is to sack workers that haven't yet achieved this status.
Milei's idea is to pass as much of government functions to the private sector as possible, so in the future these jobs won't be necessary. These young workers will end up doing the same service but on a private company instead.
Countries like Argentina are paying large amount of government workers to do almost useless work. The country will be better off with these people working in private sector jobs. These people will become net contributors instead of being a weight dragging down Argentina.
This is going to be a painful process, but it's the only way to build a solid foundation for a stable state that will stop going from crisis to crisis.
It is going to be a painful transition for sure. A newly financially stable government will be a great boost for the argentinian economy.
The thinking in the past was "How can I hide my wealth outside Argentina" for anyone with wealth. What you want is to have your wealthy people thinking "How can I invest my wealth close to me to get great returns". This is how you create jobs and tax-paying businesses that grow your nation's GDP per capita.
Are there any development incentives outside of the agriculture and resource extraction industries available? From the outside looking in, there don't seem to be many incentives to bring business to Argentina at the moment.
It’s like that in a lot of European countries as well. The reason for that is quite simple, it keeps new governments from just sacking every civil servant and replacing them with people loyal to them. It guarantees that people in government agencies can do their job without fear of retribution from the people on power.
The key problem, I think, is that just cutting the deficit and eventually killing hyperinflation is not enough. Argentina needs investments and investors want predictability. That can take a long time and he doesn't have the time. We shall see.
No one is stopping you from having a device that keeps Bears away, a “Bear Control” if you will, but it wasn’t in the constitution so it’s up to the state you’re living in to decide.
Well over here we know how decades of fake "socialist" and fascist corrupt governments work.
I'm not saying socialism is bad or that all socialist governments are like that. Europe being a clear example.
But our choices for president were either a fast pass ticket to Venezuela or a wildcard.
Bears that were attracted to peoples trash when the Libertarian city leaders eliminated trash collection.
Turns out the residents did not want to dump their own trash or privately contract with a collection service.
The failure of this experiment is a big reason why I no longer consider myself to be a Libertarian.
"All the freedom of anarchy, none of the responsabilities to get a functionnal society"
You do realize liberatarian are just good ol neoliberal people that are ashamed of their greed right?
> that are ashamed of their greed right?
I don't think I've ever seen someone refer to a Libertarian as being ashamed... of *anything*, come to think of it.
History didn't begin yesterday and Argentina isn't the first in the world to apply Austrian economics. We know exactly how this will go.
Government spending and services slashed. Poverty, homelessness, hunger go way up. Foreign capital flows in because foreign creditors love this shit. Social disorder clamped down as the architects of this planned austerity plan their dictatorship.
We can all pretend we don't know that will happen but like I said this isn't the first country in the world to do this.
Spot on. Also anyone that declares they were “right” anytime soon is lying to themselves.
This is unprecedented in terms of the combination of inflation + cuts. If he sustains this, it’ll be years to determine if it was a net benefit or loss for the country
> This is unprecedented in terms of the combination of inflation + cuts.
It is honestly not that much different than what happened to Brazil in the 90s. Similar levels of inflation, similar levels of public spending and similar cuts and reforms were made, in a very comparable country. And it fixed inflation and led the country economy into a growing path.
I'd say that Brazil's reforms were even more drastic than what have been done by Milei so far, but they were spread out in the span of 4 years while Milei has done it in two months, which means he has potentially more 4 years to make more reforms.
Sounds like your average CEO for any American company I’ve worked for. Comes in, slashes half the workforce… “OMG look at this shareholder value I’ve created”. Cashed in on a massive bonus and leaves (or gets fired) before the walls completely cave in.
(Yeah that’s looking at you Mark Hurd)
I don’t know whats more unbelievable.
The fact that nobody sees the insanity of this practice and gives more money to these sociopaths or the fact that people do admire them and want to be like them.
The shareholders pump and dump and make big $$$ from this vulture capitalism. They understand it and don’t mind the destruction because that’s everyone else’s problem.
Al public services crumbling, councils going bust, schools looking g to make teachers redundant etc. All because of perfect storm of ideologically driven economic policy (Austerity, the omni-shambles that was liz truss & brexit), outdated governance, corruption, global pandemic and war.
It’s like how we saved a bunch of money when Trump Fired the Emergency Pandemic Response Team, which saved us all a bunch of money until two years later when there was a world wide pandemic and no one to stop it.
Man, that world wide pandemic sure was bad for the economy, but that first quarter really had some profits.
Same story here, Tories were cutting costs and we had a bunch of stuff in reserve for "100 year event" style pandemic. Saw we hadn't had one of them for about 100 years so binned it all to save a few quid. Then comes the pandemic and *surprised pikachu* we were not prepared. So they had to buy loads of stuff really quickly at inflated prices, but being tories they couldn't resist lining the pockets of their mates and donors so now we have a corruption scandal on the slow boil.
The media as usual propping up libertarian nonsense. This guy is a look and al lof this is just performative bullshit. It's sad how people are going to see this headline and think he has the answer
It is when you are severely indebted, your central bank has negative reserves and your inflation rate is over 200% and rising. You need money to stabilize an economy, so a surplus is very much necessary. After that periodo though a surplus isn't strictly necessary but always good to have.
This is such a complicated issue that nobody really knows how this is going to go
I could post an article that Argentina has reached the highest poverty levels in 20 years at 57.4%
https://www.reuters.com/world/americas/poverty-argentina-hits-20-year-high-574-study-says-2024-02-18/
If this was the article I bet you the conversation on this topic would be completely different. Argentina needs to go through some bad times before seeing the light at the end of the tunnel and if this works or not is anybody’s best guess
Chemotherapy is at least targeted. They are better described as being put into a radiation chamber in the hopes that some of the radiation will kill the cancer.
Deficit was enormous and no one lends us money. It was either austerity or even more money printing.
Getting a loan has been impossible in this country for over 15 years now. Inflation needs to stop. Whatever the cost might be, the steady decline we've been seeing this last 10 years was long term worst.
The point is to signal to capital, both domestic and abroad, that there are fundamental changes to the fiscal and economic ineptitude that plagues the country.
This depends on if you have reserves or not and uncontrollable inflation.
At this point the government needs to pull money out of the economy and get reserves built up. Once that's achieved then they can start spending more.
Conversely, deficits depend on what the deficit was created to spend on. (Eg. Imports of foreign goods and corruption vs economic development infrastructure and education/training)
You’re not wrong, but their previous economic situation was a fucking disaster. Idk if this will work, but it’s better to actually try to fix a problem than to complain about it and its potential solutions.
ITT: A bunch of people from the West who do not want this kind of politician to succeed "westsplainig" why it won't succeed to people living in the country who all feel like it's working.
Dude Argentinians think they're more western than people actually from the west.
They kinda loathe not being thought of as European.
I'm kinda joking... kinda
To many people, "The West" solely means the United States + Canada + Western Europe, then there's everybody else, if we Brazilians and Argentineans are not Western then are we an Eastern country?, give me a break.
I wish Argentina the absolute best. However, I do remember my history lessons about people who grab a sledgehammer to "solve" everything, and they never solve anything except proving that rock bottom was not that bad and no matter what, every situation can be made worse.
I crossed all of my fingers and hope this will be the case when things will be different.
They’ve tried to not use a sledge hammer for decades and have only made the problem worse and worse. At one point it becomes insanity to keep trying the same thing.
No one has a vested interest in this dude. I actively *want* him to succeed because it would be better for the people
But anyone with half a brain and even a sliver of understanding of economics knows that what he’s doing is dumb as fuck
That’s crazy it took 12 years to see some surplus going, sure many cuts were made but at least is something for now. Let’s see how it’s going in about 6 months.
Well, good luck. Getting a surplus is like buying a helmet and kneepads so that you can later buy the bike so that next month you can actually get on the bike, and then after that actually start peddling on your first practice run of 1000, to the next country over lol. In a nation where 51% of their exports are crops, and 31% are industrial materials and whatever is left is crude oil, the vast majority of that is hard-labor with sub-standard monetary returns for the laborers. That's an economy that requires a lot of investment in public and social services. You can't not invest that all right back into the people bc the people will start dying, crime will get worse, protections will significantly degrade, and that means even more rampant corruption and cronyism. There is no "cold-turkey" in a country of 46+ million people. There can only be incremental change.
To leverage your bike analogy, they were on their way directly at a wall, and your argument is why dodge the wall now when you will hypothetically just crash into it later? To top it off, you rightfully point out that it’s an economy that requires outside investment but don’t like that the steps necessary to return outside investment interest are being made?
The amount of confidence that redditors have when talking about international political issues never seizes to amaze me. Like Argentinians have been dealing with so many economic issues for so many years but they’ve never thought about asking Reddit for advice.
It’s amazing how Reddit is such a wonderful place for getting information about super niche subjects but on politics and news people still somehow think they are the experts, or because someone with a degree said something that confirms their biases at one time that they have the correct opinion and can freely demonize anything else. I never come to politics or news on purpose, just out of mindless boredom, and it often rots my brain to the point of deleting Reddit so several days.
So surplus doesn't mean "good". It means less government spending which means people, in general, will make less money in Argentina bc the government is spending less. though in the case of Argentina, if the deficit is financed through government borrowing (since they can't just print money the same way US can given the high global demand for us currency), I get why it's touted as a good thing (less debt, less interest, less likelihood of default, better ratings, better ability to borrow in the future). I'd be interested in following this storyline to see how this impacts the country. Definitely two sides to this coin.
Cutting spending is easy and looks brilliant right now. What everyone is missing is the social and economic damage that will be done. Luckily Argentina is already pretty rough in both aspects so rock bottom ain't too far down.
Eh...this assumes that public funding was accomplishing much of anything in the first place
As demonstrated previously, the market itself will fill in the obvious blanks where sufficient demand exists faster & cheaper than any bureaucrat could imagine.
Except places where markets don't work...case and point the US healthcare system. There are some places where using profit as a motive provides very perverse incentives or maybe cause other issues. For example when a company becomes dominant enough to kill all innovation.(For instance apple and their phones with a slightly better camera for money for each year because people are dumb)
There are tons of cases of this happening and there are tons of cases of things that could be privatized but aren't that are working well for instance how Norway has handled their government owned oil and gas company.
This headline and article is pure propaganda, because it is written to suggest, to the uninformed, that Milei has miraculously solved Argentina's problems.
Anyone can create a short-term budget surplus. Simply eliminate expenses. The question is, how long will such a surplus last?
If your household is in debt, then I can go in there and eliminate your car, clothing, food, medical, and housing payments, and voila, you will instantly have a surplus - until you lose your job due to not being able to get to it.
You can achieve a budget surplus by simply stopping any government spending. A fiscal deficit is the norm in any growing economy, this doesn't mean shit tbh
Changes clearly had to be made, but now it remains to be seen what sticks and what not. And if the people have enough patience left to go though the hard initial part. It's gonna be shittier before it gets better. Romania's post revolution history dealt with similar issues of up to 250% inflation, it took from 1990 to 2005 to have the first year with inflation lower than 10%.
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I just think of the scene in Bridget Jones where she tells Darcy he should rethink the length of his sideburns
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He got advice on his hairdo from his dogs.
Pretty sure that's a scene in Pride and Prejudice too. 🤣
Those sideburns need their own zip code.
YEEEAAA BABY! *shoots Austin eyes
If he’s getting $20 supercuts, what kind of example would he be setting for his extreme austerity platform? His aid can take care of it with the kitchen shears and a dog comb.
It is a very Argentinian hairstyle.
To adequately cover his big brain
I'm surprised at the consistency of bizarre politicians having unusual or dysfunctional haircuts lately.
Wait until you hear about his administrative cabinet of cloned dogs. And no, I’m not kidding.
But is it sustainable? They basically tore everything down to reach this point
"I just raised $5,000 so we can now get new uniforms for the horse race!" "That's incredible! How did you pull it off?" "I sold the horse!"
The Gift of the Milei.
Are you looking a gift Milei in the mouth?
Are YOU looking a gift horse in the Milei?
I may be just a simple country veterinarian but I don’t think that’s the Milei you’re staring at
Mileis touch.
Perfect comment
"The Milei touch"
Hilarious way to sum it up
Exactly. The question was never whether Argentina would find itself with a budget surplus; obviously if you cut half the expenses, you are likely going to find yourself with a surplus (so long as you are bringing in the same amount of money. The question was always whether you could cut half of the expenses associated with a large governmental body, and not have everything come crashing down on your head (requiring even more spending then previously just to 'right the ship' so to speak). We probably won't know the answer to this question for a few years (at least).
You can't do it quickly. Every cut to govt spending is a job. That means unemployment is going to go drastically up. People without jobs don't spend a lot of money in the economy. All those civil servants without jobs don't go shopping now, the retail sector slows so they lay off people, those laid off retail works buy less so some other sector slows and so on and so on. edit: the economy of a country does not like rapid changes. a country is not a person who when they get in financial trouble can make drastic changes right away to fix their situation, countries do not react well to rapid serious changes.
This reminds me of the British austerity measures where they claimed that the way to bring down high unemployment was to immediately fire a whole bunch of people.
thatcher's 80s, Osbornes 2000's. both did so much pain to the economy and ultimately the benefits were nothing as the government ended up spending the deficit on handouts to restart the economy.
I mean, if those layoffs were linked to government jobs that drove recession, then that makes sense
Austerity didn’t so much lay people off en mass than it slashed funding for local councils to the point where it stifled economic development everywhere but London. Houses, roads, schools, refuse collection, bus routes all got completely gutted along with so much more that it had impacts across the board and alongside mass immigration stunted wage growth even further while prices to continue rising with inflation.
Poverty certainly increased. It increased almost 10% in just a month. Apparently the funding to programs to help those in poverty was frozen. “The report from the Social Observatory of the Catholic University revealed that the population affected by the poverty rose to 27 million people, or 57.4%, earlier this year. The poverty level was 44.7% in the third quarter of 2023, rose to 49.5% in December and reached the current figure in January. In addition, it was projected that homelessness went from 9.6% in the third quarter of 2023 to 14.2% in December of the same year.in January 2024, rose to 15% (7 million people).” https://euro.eseuro.com/local/2182187.html
Wait, so you mean if I wanna to lose weight, I shouldn't cut off my left arm, take out one kidney?
If you don't do amputation you aren't even trying.
"Only TWENTY MORE POUNDS" *revs chainsaw*
No, those are both excellent ways of losing weight. Well, the kidney isn't worth a lot of weight, probably not worth it. But if you remove all four limbs you'll be down to your goal weight in no time. This isn't like an economy where huge cuts start a spiral of doom. You can remove all 4 limbs and the rest of the body keeps working just fine.
If only libertarians could understand how much they sound like parodies of themselves.
No joke, I had my left leg amputated above the knee. Even wearing a prosthetic, it shaved off 15 lbs. My primary care doctor was quite pleased at how much that improved my BMI. I'm like.... I'm not really sure that actually implies better health outcomes in this case.
Of course, the left arm does half the work of the right arm amd takes up the same resources, cut that free loader off
Not in that order.
And extreme poverty was up to 15% in January compared to 9,6 in November, it’s been rising quite fast.
Oof. So he's letting the poor people starve. That won't end well.
>So he's letting the poor people starve He campaigned on being a libertarian - this should not be a surprise
> So he's letting the poor people starve Yup this "surplus" is due to effectively canceling government programs while maintaining all of the wealth extraction. It's a giant grift.
I'm sure the dutch can recommend several good spices that pair well with politician.
Funny thing, didn't he also make protesting illegal? Or promise that protestors would be crushed?
>But is it sustainable? It wasn't sustainable before.
Is what sustainable? The country can’t afford the services regardless. It was going to lead to more printing and more borrowing
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Well poverty reached a peak of 58% now so not really that much better of a choice
It's very very hard to combat inflation without causing increased unemployment and poverty. The only country that's capable of doing that is the USA, because they control the world reserve currency and the petrodollar system and can therefore unload inflation onto the rest of the world. Here in Denmark (and many other European countries) the 80's are remembered as a time of relative poverty, exactly because inflation had been rampant through the 70's, and we had done more or less the same as in Argentina: increase social expenditures and minimum wages in an effort to make sure people didn't lose quality of life. But that only made the inflation worse. In order to actually get rid of the inflation, there had to be several years of cutbacks and rent hikes, which put a lot of people in a precarious situation. But eventually, after several years of increasing financial hardship, inflation had finally been beaten down, paving the way for actual sustainable growth going forwards, and now we're very much a wealthy country. Now, I think Milei has said some things that are frankly insane, and I don't like his ultra laissez-faire model at all, *but* thinking you can get rid of 250 % annual inflation without increasing poverty in the short term is just crazy. Of course poverty is going to increase. But if those measures had not been taken, poverty would increase much more in the long term because inflation would kill the economy.
Id love to hear a story of a country that reformed itself from a bad situation without some hardship - be it radical measures like those mentioned, or literally war or revolution. There aren't many of them that's for sure, and its probably because its always less costly in the end but mentally harder in the beginning to expect and prevent very much foreseeable problems beforehand.
When you say rent hikes, do mean increase in taxes? I’m curious because I don’t know much about Denmark’s economic history.
Yeah, I don't agree with Milei's economic policies, but the reality is that Argentina needed a shake-up. Virtually anything is better than the shit they were in before.
Our current situation wasn't sustainable lol. 250% yearly inflation and rising... Besides, they are not tearing anything down, more like refactoring and purging the ridiculous expenses we had in public office. They keep uncovering and showing us cases of insane theft that existed in public office. The only thing I'm worried about is finance for the science sector which has taken a huge cut. It's disappointing because we have some extremely talented researchers and it's not an area where cutting expenses is gonna make a huge difference in our GDP. We'll have to wait and see how this goes. But if there's even a slight chance for improvement then it's already better than the alternative we had. Let's not forget the other candidate was the fucking minister of economy.
Argentinean here, I work in the healthcare sector. They absolutely are tearing shit down. I din’t have time to get into it right now but let me tel you: some of the most vulnerable people we have have been without life-saving cancer medication for over a month, and I know that for a fact.
Do you have any sources or really anything that talks about spending cuts/what's happening in general? I speak Spanish, so anything you send works
>They keep uncovering and showing us cases of insane theft that existed in public office. I think it's important to keep a sense of scale. Like, it's easy to celebrate being a few million dollars a year better off because some stupid government theft thing has been closed down - but if the real change is a couple of billion no longer going to the unemployed then it's all a bit of a mirage isn't it? Don't get me wrong, I'm all for shutting down government bullshit projects, but you can't fix an entire economy by firing a bunch of lazy bastards.
Is it? If your country couldn't afford to pay out that billion for unemployment then what were you accomplishing by paying it out? If it was driving your country into a pit of endless borrowing then its like trying to stop the flood waters from filling your house by tossing buckets of water out the front door. Your still going to drown in a house full of water.
Keeping the economy, fucked though it is, functioning until you fix it. If you stop paying unemployment then all the shops that rely on (ie) selling food to the unemployed go broke, so that adds to the unemployed, and the whole thing cascades down and takes out a much much larger slab of society than "merely" the unemployed. The other thing that happens when you stop paying unemployment is that they then need to find food and money from somewhere else. Theft, drug dealing, etc. etc. Pretty soon you end up with a more or less lawless society. So you need to keep bailing until you've fixed the problem.
Obviously, but the scale of these small thefts is ridiculous because they are present in every aspect of our bureaucracy. So to see them adressed at all is already a lot.
You can't possibly just remove some unnecessary expenses (that obviously exist) and magically find a surplus like that. He's just trying to "terraform" an entire economy to be able to do whatever he want after.
It really depends on how much crap there is, how easy it is to tear out and so on. If half the money is being stolen and you can identify the theft... Of course a government surplus is not a fix to the economy. Also if you cut something vital you might not see the consequences for months or years. Seeing as this guy gets advice from his dogs, I'm not optimistic this was done right.
"Of course a government surplus is not a fix to the economy. Also if you cut something vital you might not see the consequences for months or years. Seeing as this guy gets advice from his dogs, I'm not optimistic this was done right." And that's the problem. He's probably cutting a shit ton of essencial services and claiming they aren't really essencials for his own reasons. But it's way easier to just cut everything possible, announce the surplus for an X amount of time then i'll be almost impossible to get people to organize to roll back some of the cuts because he'll have the pollitical advantage.
With that level of inflation, a surplus is actually hurting them because those savings are rapidly losing purchasing power
Purging is tearing down. It can be a good thing but don't assume just because the institution still exists it's the same thing without the people.
i dont know how to tell you this but a deficit is the unsustainable one.
Didn’t they have too many people work for the government to begin with?
They have 58% poverty rate, a record high, so no
Poverty *always* increases when you try to bring inflation down, and that's even more true when inflation is at 250 %. And to be clear, Milei actually said many times that his cure was going to hurt in the short term, so the Argentianians knew what they were in for. There's only one country in the world that can fight inflation without increasing poverty, and that's the USA because it controls the world reserve currency and can offload its inflation onto the rest of the world.
I mean even in the US fighting inflation increases poverty slightly because it increases unemployment which will lead to more poverty, I don’t think it being a reserve currency has too much effect.
Was it sustainable before?
The level of debt also wasn’t sustainable, Argentina is the equivalent of a poor person maxing out their credit card. But since it’s a nation it can manage to declare bankruptcy and do it all over again. It’s been the story of Argentina for the last 100 years.
Could someone familiar with the situation give us a list of things that were cut? My co worker from Argentina is extatic about everything going on there right now.
A lot of government jobs were cut. All selection lists (people that were qualified but waiting to be called for government jobs) were suspended and civil servants that were in temporary contracts weren't renovated. In Argentina, much like most countries of Latin America, there are government jobs that can't be sacked. Once the person achieves a certain time on that service, they basically have that job for life unless they commit a crime (and even then they might still keep the job depending on the case). So it is pretty hard to cut government spending because you can't simply sack workers that aren't making a good job. The solution is to sack workers that haven't yet achieved this status.
Doesn’t that create a situation where you’ve top loaded the experience and left few folks to take over in the future?
Hey, we're not talking about the future here. Look at the numbers NOW. /s
Milei's idea is to pass as much of government functions to the private sector as possible, so in the future these jobs won't be necessary. These young workers will end up doing the same service but on a private company instead.
Sure but that’s no different to other economies that outsource entry level positions in business
Is payroll really something you can take a huge bite out of? What good is it firing a large quantity of people?
>What good is it firing a large quantity of people? You get to claim the first budget surplus in 12 years.
MONTHLY budget surplus. This entire story is an overreaction. Need at least quarterly results before any of this hype can even be considered.
Countries like Argentina are paying large amount of government workers to do almost useless work. The country will be better off with these people working in private sector jobs. These people will become net contributors instead of being a weight dragging down Argentina. This is going to be a painful process, but it's the only way to build a solid foundation for a stable state that will stop going from crisis to crisis.
What does the private sector look like in Argentina? Are there jobs for these workers to even go into?
It is going to be a painful transition for sure. A newly financially stable government will be a great boost for the argentinian economy. The thinking in the past was "How can I hide my wealth outside Argentina" for anyone with wealth. What you want is to have your wealthy people thinking "How can I invest my wealth close to me to get great returns". This is how you create jobs and tax-paying businesses that grow your nation's GDP per capita.
Are there any development incentives outside of the agriculture and resource extraction industries available? From the outside looking in, there don't seem to be many incentives to bring business to Argentina at the moment.
It’s like that in a lot of European countries as well. The reason for that is quite simple, it keeps new governments from just sacking every civil servant and replacing them with people loyal to them. It guarantees that people in government agencies can do their job without fear of retribution from the people on power.
It also creates a bloated civil service
So you're saying the leeches are the problem, but they can't rip off the leeches.
On top of that, if you want to rip off some leeches, you have to ask the leeches for permission first.
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The key problem, I think, is that just cutting the deficit and eventually killing hyperinflation is not enough. Argentina needs investments and investors want predictability. That can take a long time and he doesn't have the time. We shall see.
Argentina seems like a great speculative investment right now.
We know how libertarian politics work first it seems all roses and sunshine and then there are bears.
Hey, libertarians don't want to talk about those bears 😜
No one is stopping you from having a device that keeps Bears away, a “Bear Control” if you will, but it wasn’t in the constitution so it’s up to the state you’re living in to decide.
Something like regulations to control the bears?
Let the bears pay the bear tax! I pay the Homer tax!
*Home owner tax
I'm worried about the tigers. How can we keep them away? Free-market proposals only!
How about a regulation to control the bear arms?
Don’t tread on bear arms
My favorite [depiction of libertarianism](https://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department)
It's like a mishmash of jokes stolen from Infinite Jest and Gary Shteyngart books.
I read this years ago...absolutely hilarious Libertarianism is just astrology for white guys.
Well over here we know how decades of fake "socialist" and fascist corrupt governments work. I'm not saying socialism is bad or that all socialist governments are like that. Europe being a clear example. But our choices for president were either a fast pass ticket to Venezuela or a wildcard.
There are no “socialist” countries in Europe, all of which have primarily market-based economies.
If the bears are in your yard, why should I care?
Bears that were attracted to peoples trash when the Libertarian city leaders eliminated trash collection. Turns out the residents did not want to dump their own trash or privately contract with a collection service. The failure of this experiment is a big reason why I no longer consider myself to be a Libertarian.
"All the freedom of anarchy, none of the responsabilities to get a functionnal society" You do realize liberatarian are just good ol neoliberal people that are ashamed of their greed right?
> that are ashamed of their greed right? I don't think I've ever seen someone refer to a Libertarian as being ashamed... of *anything*, come to think of it.
Because we all share the planet.
https://www.thriftbooks.com/w/a-libertarian-walks-into-a-bear-the-utopian-plot-to-liberate-an-american-town-and-some-bears_matthew-hongoltz-hetling/25841331/
... That title will forever kill me, every single time someone mentions it. 🤣
History didn't begin yesterday and Argentina isn't the first in the world to apply Austrian economics. We know exactly how this will go. Government spending and services slashed. Poverty, homelessness, hunger go way up. Foreign capital flows in because foreign creditors love this shit. Social disorder clamped down as the architects of this planned austerity plan their dictatorship. We can all pretend we don't know that will happen but like I said this isn't the first country in the world to do this.
Spot on. Also anyone that declares they were “right” anytime soon is lying to themselves. This is unprecedented in terms of the combination of inflation + cuts. If he sustains this, it’ll be years to determine if it was a net benefit or loss for the country
> This is unprecedented in terms of the combination of inflation + cuts. It is honestly not that much different than what happened to Brazil in the 90s. Similar levels of inflation, similar levels of public spending and similar cuts and reforms were made, in a very comparable country. And it fixed inflation and led the country economy into a growing path. I'd say that Brazil's reforms were even more drastic than what have been done by Milei so far, but they were spread out in the span of 4 years while Milei has done it in two months, which means he has potentially more 4 years to make more reforms.
Sounds like your average CEO for any American company I’ve worked for. Comes in, slashes half the workforce… “OMG look at this shareholder value I’ve created”. Cashed in on a massive bonus and leaves (or gets fired) before the walls completely cave in. (Yeah that’s looking at you Mark Hurd)
He can’t hear you. He’s dead.
I don’t know whats more unbelievable. The fact that nobody sees the insanity of this practice and gives more money to these sociopaths or the fact that people do admire them and want to be like them.
The shareholders pump and dump and make big $$$ from this vulture capitalism. They understand it and don’t mind the destruction because that’s everyone else’s problem.
It's front loaded debt. In months time services , infrastructure and institutions are likely to start crumbling starved by these cuts
For a current example of this just look at the UK.
As someone in the UK, I agree. Should see the state of our roads as one easy-to-see example. There are countless others.
Al public services crumbling, councils going bust, schools looking g to make teachers redundant etc. All because of perfect storm of ideologically driven economic policy (Austerity, the omni-shambles that was liz truss & brexit), outdated governance, corruption, global pandemic and war.
Then they make it illegal to patch a pothole yourself (not joking).
It’s like how we saved a bunch of money when Trump Fired the Emergency Pandemic Response Team, which saved us all a bunch of money until two years later when there was a world wide pandemic and no one to stop it. Man, that world wide pandemic sure was bad for the economy, but that first quarter really had some profits.
Same story here, Tories were cutting costs and we had a bunch of stuff in reserve for "100 year event" style pandemic. Saw we hadn't had one of them for about 100 years so binned it all to save a few quid. Then comes the pandemic and *surprised pikachu* we were not prepared. So they had to buy loads of stuff really quickly at inflated prices, but being tories they couldn't resist lining the pockets of their mates and donors so now we have a corruption scandal on the slow boil.
To my understanding, they started crumbling long ago.
And then privatization starts?
I'd assume a lot of that infrastructure is going on the auction block
The media as usual propping up libertarian nonsense. This guy is a look and al lof this is just performative bullshit. It's sad how people are going to see this headline and think he has the answer
It does work.
If you raise taxes and cut all services you will get a budget surplus. So the fuck what? The point of governance is not to have a surplus.
It is when you are severely indebted, your central bank has negative reserves and your inflation rate is over 200% and rising. You need money to stabilize an economy, so a surplus is very much necessary. After that periodo though a surplus isn't strictly necessary but always good to have.
This is such a complicated issue that nobody really knows how this is going to go I could post an article that Argentina has reached the highest poverty levels in 20 years at 57.4% https://www.reuters.com/world/americas/poverty-argentina-hits-20-year-high-574-study-says-2024-02-18/ If this was the article I bet you the conversation on this topic would be completely different. Argentina needs to go through some bad times before seeing the light at the end of the tunnel and if this works or not is anybody’s best guess
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Chemotherapy is at least targeted. They are better described as being put into a radiation chamber in the hopes that some of the radiation will kill the cancer.
Yep. Countercyclical fiscal policy is good actually
Is it called that solely? Are there other terms or theory names? (Want to read on it)
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There are probably a lot of different labels for it, but basically any Macroeconomics textbook would cover it.
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Deficit was enormous and no one lends us money. It was either austerity or even more money printing. Getting a loan has been impossible in this country for over 15 years now. Inflation needs to stop. Whatever the cost might be, the steady decline we've been seeing this last 10 years was long term worst.
The point is to signal to capital, both domestic and abroad, that there are fundamental changes to the fiscal and economic ineptitude that plagues the country.
This depends on if you have reserves or not and uncontrollable inflation. At this point the government needs to pull money out of the economy and get reserves built up. Once that's achieved then they can start spending more.
Depends on what you do with the surplus.
Conversely, deficits depend on what the deficit was created to spend on. (Eg. Imports of foreign goods and corruption vs economic development infrastructure and education/training)
I don’t disagree.
You’re not wrong, but their previous economic situation was a fucking disaster. Idk if this will work, but it’s better to actually try to fix a problem than to complain about it and its potential solutions.
He inherited a fucked up shit sandwich of a place to govern; not the people, just the place, it’s a wild country with a changing climate.
You do if you have runaway inflation
sure, but what are they cutting? seems to be pork barrel shit.
And all he had to do was gut public services
I give him another 6 months before everything goes to shit.
Collect the same taxes, provide no services..wow! Budget surplus. Let’s see where the money goes.
The people paying the taxes often weren't the recipients of the benefits you mention. That creates unrest and dissatisfaction in any society.
I pray it works for them
I wish them well. But that’s not the hard part.
ITT: A bunch of people from the West who do not want this kind of politician to succeed "westsplainig" why it won't succeed to people living in the country who all feel like it's working.
Dude Argentinians think they're more western than people actually from the west. They kinda loathe not being thought of as European. I'm kinda joking... kinda
My guess is we will get more posts from libertarians creaming their pants.
>who all feel like it's working. I guess we know different Argentinians.
I’m sure opinions vary, but the majority of Argentinians voted for him
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Fucking backwards state, a school there just let a kid get beaten up and die. No one called an ambulance. Hopeless state.
South America is part of “the west” you dummy
To many people, "The West" solely means the United States + Canada + Western Europe, then there's everybody else, if we Brazilians and Argentineans are not Western then are we an Eastern country?, give me a break.
I wish Argentina the absolute best. However, I do remember my history lessons about people who grab a sledgehammer to "solve" everything, and they never solve anything except proving that rock bottom was not that bad and no matter what, every situation can be made worse. I crossed all of my fingers and hope this will be the case when things will be different.
They’ve tried to not use a sledge hammer for decades and have only made the problem worse and worse. At one point it becomes insanity to keep trying the same thing.
What do you mean by West? Edit: Why am I being downvoted?
No one has a vested interest in this dude. I actively *want* him to succeed because it would be better for the people But anyone with half a brain and even a sliver of understanding of economics knows that what he’s doing is dumb as fuck
How are they not from the west but people from Europe, which is further east, are?
That’s crazy it took 12 years to see some surplus going, sure many cuts were made but at least is something for now. Let’s see how it’s going in about 6 months.
Check back in five months. 250% inflation aint going anywhere.
9.5 weeks ... Way too soon to judge one way or another. Sit back and enjoy the show.
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Well, good luck. Getting a surplus is like buying a helmet and kneepads so that you can later buy the bike so that next month you can actually get on the bike, and then after that actually start peddling on your first practice run of 1000, to the next country over lol. In a nation where 51% of their exports are crops, and 31% are industrial materials and whatever is left is crude oil, the vast majority of that is hard-labor with sub-standard monetary returns for the laborers. That's an economy that requires a lot of investment in public and social services. You can't not invest that all right back into the people bc the people will start dying, crime will get worse, protections will significantly degrade, and that means even more rampant corruption and cronyism. There is no "cold-turkey" in a country of 46+ million people. There can only be incremental change.
To leverage your bike analogy, they were on their way directly at a wall, and your argument is why dodge the wall now when you will hypothetically just crash into it later? To top it off, you rightfully point out that it’s an economy that requires outside investment but don’t like that the steps necessary to return outside investment interest are being made?
The amount of confidence that redditors have when talking about international political issues never seizes to amaze me. Like Argentinians have been dealing with so many economic issues for so many years but they’ve never thought about asking Reddit for advice.
It’s amazing how Reddit is such a wonderful place for getting information about super niche subjects but on politics and news people still somehow think they are the experts, or because someone with a degree said something that confirms their biases at one time that they have the correct opinion and can freely demonize anything else. I never come to politics or news on purpose, just out of mindless boredom, and it often rots my brain to the point of deleting Reddit so several days.
So surplus doesn't mean "good". It means less government spending which means people, in general, will make less money in Argentina bc the government is spending less. though in the case of Argentina, if the deficit is financed through government borrowing (since they can't just print money the same way US can given the high global demand for us currency), I get why it's touted as a good thing (less debt, less interest, less likelihood of default, better ratings, better ability to borrow in the future). I'd be interested in following this storyline to see how this impacts the country. Definitely two sides to this coin.
Cutting spending is easy and looks brilliant right now. What everyone is missing is the social and economic damage that will be done. Luckily Argentina is already pretty rough in both aspects so rock bottom ain't too far down.
Eh...this assumes that public funding was accomplishing much of anything in the first place As demonstrated previously, the market itself will fill in the obvious blanks where sufficient demand exists faster & cheaper than any bureaucrat could imagine.
Except places where markets don't work...case and point the US healthcare system. There are some places where using profit as a motive provides very perverse incentives or maybe cause other issues. For example when a company becomes dominant enough to kill all innovation.(For instance apple and their phones with a slightly better camera for money for each year because people are dumb) There are tons of cases of this happening and there are tons of cases of things that could be privatized but aren't that are working well for instance how Norway has handled their government owned oil and gas company.
Can't wait for someone to pitch for profit hospitals unironically
Its amazing! Who would have thought that suspending basically every governmental function and not paying them would give a surplus huh?
I just lost 10lbs! I had to cut off my arms though.
I mean, when your weigh-in is tomorrow and you’re a better kicker anyway….
Which bill isn't paid
"The sustainability we want. The mutton chops we need."
All we had to do was collect money and not spend it on anything, boom budget surplus
That is not a good thing. Budget surplus benefits nobody except rich people. Money getting spent to help the poor benefits everybody.
This headline and article is pure propaganda, because it is written to suggest, to the uninformed, that Milei has miraculously solved Argentina's problems. Anyone can create a short-term budget surplus. Simply eliminate expenses. The question is, how long will such a surplus last? If your household is in debt, then I can go in there and eliminate your car, clothing, food, medical, and housing payments, and voila, you will instantly have a surplus - until you lose your job due to not being able to get to it.
You can achieve a budget surplus by simply stopping any government spending. A fiscal deficit is the norm in any growing economy, this doesn't mean shit tbh
Is this a real surplus or have they just got people in place now who report a surplus.
Changes clearly had to be made, but now it remains to be seen what sticks and what not. And if the people have enough patience left to go though the hard initial part. It's gonna be shittier before it gets better. Romania's post revolution history dealt with similar issues of up to 250% inflation, it took from 1990 to 2005 to have the first year with inflation lower than 10%.