Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Argentina’s Paradigm Shift

by November 21, 2023
November 21, 2023
Argentina’s Paradigm Shift

Ian Vásquez

Argentina’s president‐​elect, Javier Milei. (Getty Images)

Javier Milei’s victory over the Peronist‐​party candidate in Argentina’s presidential election Sunday was crushing. Milei won by 11 points and in almost all electoral districts. He received the support of young people and of all socio‐​economic classes, including strong support from the middle and lower classes.

He did so with a message that, for the first time in almost 80 years, did not propose to simply adjust the corporatist, client‐​patron system imposed by Juan Domingo Perón, but to dismantle it completely because it is impoverishing and immoral. In clear language, Milei proposed a paradigm shift: to return Argentina to the classical liberal tradition that made that country one of the richest on the planet a century ago.

His campaign speeches focused on the importance of freedom, long lost under the weight of an oversized Argentine state. Before a national public, he incessantly repeated his definition of liberalism (in the classical sense), borrowed from the distinguished Argentine liberal Alberto Benegas Lynch Jr., whom he cites as a sort of national hero: “Liberalism is the unrestricted respect for the life project of others based on the principle of non‐​aggression and the defense of the right to life, liberty, and private property.”

Guided by this vision, Milei proposes to shrink the state and expand the role of the private sector and civil society. In practice, he proposes a significant reduction in public spending and taxes; dollarization and the elimination of the central bank; free trade; the elimination of bureaucratic obstacles; the reform of public administration; labor sector flexibility; and education reform that includes increased competition and school vouchers, among other proposals.

Will he be able to accomplish this ambitious agenda? It will not be easy. The economy is in crisis and the outgoing government has left an economic time bomb that any incoming government would have to deal with. Argentina has an annual inflation rate above 140 percent, a fiscal deficit exceeding 5 percent of GDP (or about 10 percent of GDP depending on how it’s measured), poverty above 40 percent of the population, a bankrupt central bank, interest rates over 130 percent, government debt at an all‐​time high, a recent splurge in public spending, debt payments coming due soon, and a shrinking economy. Any adjustment—which will include significant hikes in the price of gasoline, electricity, transportation, and so on—will be harsh.

Moreover, Milei does not have the support of Congress. His party has only thirty‐​eight deputies in a chamber of 257 deputies. Of the seventy‐​two senators, only seven are from his party. His possible coalition also falls short of a majority in the Chamber of Deputies or the Senate. Milei has a popular mandate and will try to use it to promote his agenda. But it is a given that the opposition will obstruct him in the legislature, in the courts, and in the streets. He will face obvious political limits on what he can achieve.

But he will be able to make important changes. As president, he can repeal some of the previous government’s regulations. He can free up prices by decree and, in due course, get rid of capital controls. He can cut some subsidies and reduce the number of ministries by decree.

Will he be able to carry out the main economic proposal of his campaign—that is, to replace the peso with the dollar? That too will have to go through Congress. But as the economic crisis worsens, the reform will become more politically feasible. As Milei and his team well know, dollarization is a fundamental reform because it eliminates irresponsible monetary policy, puts some limits on reckless fiscal policy, and forms the basis for other necessary reforms.

If Milei were only able to implement dollarization, it would be a great achievement. What Milei has already accomplished, however—articulating a clear, liberal alternative to Peronism with popular support and electoral success—represents a remarkable change in a country that really could be great again.

Note: This article is based on a version that was originally published in El Comercio (Peru) on November 21, 2023.

0
FacebookTwitterGoogle +Pinterest
previous post
The National Security Bureaucracy Is Unwell
next post
NRSC lobs attacks against Arizona lawmakers Sinema, Gallego: ‘We are going to keep exposing the truth’

You may also like

FBI Budget

May 19, 2023

“Our Allies Then Bent Over Backwards to Help...

March 11, 2024

U.S. Ranks 17, Hong Kong Plummets, Argentina in...

December 19, 2023

Congress Should Embrace the Cuts in Trump’s Skinny...

May 2, 2025

The Case for Conditioning Disaster Aid to California

January 24, 2025

Machines Do Feed Families

October 16, 2024

Idaho Leads the Nation Toward Expanding Pharmacists’ Scope...

August 14, 2023

Friday Feature: Saint Joseph Academy

November 4, 2024

Ninth Circuit: Prop 65 Warnings Can Count As...

March 29, 2024

Diseased Illegal Immigrants Aren’t “Invading” the United States

January 21, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved