Argentine President Javier Milei, a libertarian, came into office with a promise of slashing inflation and cutting massive numbers of government jobs. These economic reforms have been effective. 30,000 government jobs have been removed and monthly inflation has gone from a whopping 25% to 2.7%. This has sparked debate in the country, but the numbers are pretty staggering.
Government subsidies have also gone the way of the dinosaur under Milei's leadership as he's engaged in deregulating markets, as well. It has been fiscal discipline, say supporters, while detractors claim he is "prioritzing austerity over social welfare," writes the EconoTimes. There have been complaints and protests, and 30,000 is not a small number of people to plunge into unemployment. It is, however, what was promised when he took office, to much fanfare from supporters.
However, a year after his win, Reuters reports that "Milei has managed to pull off a gravity-defying feat: keeping that fervor burning and avoiding tipping the country into fiery protest even as he rolls out severe spending cuts that have crimped the economy and pushed up poverty."
Milei was able to use the funds reclaimed by cutting those 30,000 government jobs to stabilize the economy. He dollarized the Argentine economy, replacing the wavering peso with the US dollar. In defending his policies, he said that "Argentina was on the brink of collapse. These measures are not easy, but they are necessary to save our nation."
"Milei has made huge cuts, which has generated a major recession," Reuters quotes economic analyst Facundo Nejamkis as saying, "and yet, the people who voted for him continue to back him. This is what marks Milei out."
Voters are giving Milei time to get everything sorted out and he appears to be tackling his mandate one step at a time, cutting, stabilizing, and then, ideally, growing. "Reviving the stalled economy," Reuters notes, will be the next step in the plan. Unions officials have not been particularly enthused about the cuts so far.
"They've taken away medicines from retired people, they've fired over 45,000 government workers and they keep making budget cuts to the lower classes," said a State Workers Association union official during one of the protests that have sprung up amid the cuts.
In the US, President-elect Donald Trump has also vowed to cut government waste and he's put two businessmen, entrepreneurs Vivek Ramaswamy and Elon Musk, in charge of making recommendations to that effect. The Department of Government Effieciency, or DOGE, intends to review the massive spending at the dozens of government agencies under the federal government and suggest areas that waste can be purged.
Like Milei, Trump's sweeping mandate from American voters will ideally give him time to get these things sorted out before backlash begins in earnest.
