Nostr Web Client

Well Millei sold us on thinking that he was the next Hayek who was going to "afuera" all the wasteful spending and use Austrian economics principles to restore the Argentine economy, seems like he is more of an MMT-er than an Austrian.

Boris_Badenov 3mo ago

From AI:

Economic Outlook

Under President Javier Milei's administration, Argentina has made notable fiscal improvements, turning a 5% fiscal deficit in 2023 into a 0.3% surplus in 2024, while reducing annual inflation from nearly 300% to under 40%. GDP growth is projected to reach 5.5% in 2025, which should help improve the debt-to-GDP ratio through economic expansion.

The debt-to-GDP ratio is expected to continue declining in the coming years as the economy stabilizes and grows, with projections showing a gradual improvement from the current elevated levels.

The Reality of Modern Economies

The search for Austrian-style economies reveals a stark truth: pure free market economies do not exist in the modern world. As one analysis notes, "in practice, no country in the world has ever achieved a 100% capitalist, 'laissez-faire,' or free-market economy. All capitalist economies are mixed to one degree or another".

Even the most market-oriented economies maintain significant government intervention. Countries frequently cited as examples of free markets - including Singapore, Hong Kong, and the United States - all feature substantial state involvement in economic planning, regulation, and monetary policy that would be anathema to Austrian economists.

Reply to this note

Please Login to reply.

Discussion

Kudzai Kutukwa 3mo ago

Well the one area that AI sometimes doesn't too well is nuanced discussions. Millei definitely has had some wins and was probably the best man to win the election given the other alternatives on the table. My issue is more with how he branded himself, what he promised to deliver and what he has actually delivered. Here are a few things that Ai probably missed but are worthy of consideration:

1. Since he took over about two years ago, money supply (M2) has exploded by about 114%

2. Between $40b - $80b worth of gvt debt is being rolled over with maturities that are less than a year, meaning less money for productive businesses but to servicing the interest payments. A huge reason why inflation is still running hot despite all the benefits AI pointed out above

3. His failure to close the central bank is the reason why the two problems above persist and will likely continue to persist

4. Argentina today, after the recent IMF bailout which Millei begged for, now has the highest outstand debt to the IMF in IMF history. Debt that everyone knows can never be repaid, esp when you consider that Argentina alone makes up 40% of the IMF's lending portfolio. Not to mention an additional $42B that was borrowed from intl lenders like the WB, under Millei

5. GDP growth is an easy metric to manipulate in the short term when you are printing like crazy, which is exactly what Millei is doing. That's to say nothing of how useless a metric GDP is for measuring economic growth objectively

I could go on, the point is that he isn't what I thought he was. Chainsaw theatrics and economic realities are two different worlds