Baronvonrort wrote on Jun 30th, 2025 at 11:57pm:
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Inflation down GDP up Argentina is going well after cutting government spending on woke crap |
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Jim Chalmers should ignore the ‘gurus’ and look to Argentina for economic tipsAdam Creighton
Thank goodness Argentina’s charismatic, libertarian President, Javier Milei, didn’t listen to mainstream economists. He appears single-handedly to have revived his nation’s economic fortunes, after decades of misery, by doing precisely the opposite of what some of the world’s most eminent economists advised.If only his reforms would be a template for our own political and economic elite, collectively addicted to ever more intrusive regulation and public spending.
Ahead of his election in November 2023, 170 economists from around the world, including such luminaries as France’s Thomas Piketty and India’s Jayati Ghosh, warned Milei’s supposedly “extreme right” proposals centred on slashing regulation and public spending would cause “devastation” and “social chaos”.
“A major reduction in government spending would increase already high levels of poverty and inequality and could result in significantly increased social tensions and conflict,” they wrote. His agenda was “fraught with risks that makes (it) potentially very harmful for the Argentine economy and the Argentine people”.
Milei’s administration slashed the number of ministries from 19 to nine, including departments of climate change, diversity and “social development”, insidious fonts of ridiculous regulations the world over. The turnaround in Argentina’s misfortunes has been stunning, even surprising his supporters.
In the second quarter of this year the economy grew 7.6 per cent, practically all of it an increase in GDP per capita given the nation’s relatively slow population growth. Milei has managed all this without resorting to the tried and failed method of endless deficit spending, actually overseeing a budget surplus in 2024 of 0.3 per cent of GDP.
Yes, there has been the odd street protest organised by militant unions, but they appear to have ignored the fact the poverty rate has declined sharply too, from 53 per cent in the first half of last year to 38 per cent in the second half. Even UNICEF, hardly a hotbed of libertarian thought, conceded in May that 1.7 million children had been lifted out of poverty since Milei took office.
“The disgusting liberals, the politically correct people, the ‘cool’ leftists, the ‘sensitive’ ones, those who love the poor so much that all they do is multiply them; they all would tell us that we were going to generate an explosion of poverty … the ‘insensitive libertarians’ lifted more than 10 million people out of poverty,” the President said when that data emerged.
His angry, mocking tone is understandable in a nation, once among the richest in the world, that had fallen to well below 50th by the time he won office after decades of socialist meddling.
Perhaps the most extraordinary results have occurred in the housing market. Milei abolished rent controls last year amid predictable fears those nasty landlords would jack up rents. On the contrary, supply of rentable dwellings almost tripled and rents actually fell.
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None of this is to smear all economists or economics; indeed, Milei was an economist himself. But it’s a reminder to beware conventional wisdom, and the inevitable tendency of economists in the modern era to have a bias toward bigger government, which often through academic grants, commissions and salary underpins their livelihoods.
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