Argentina's Javier Milei Unveils His 'Austerity Budget' to Crush Inflation and Crony Capitalism

Red State ^ | 12/17/2023 | streiff

[SeekAndFind]

Argentinian President Javier Milei has rolled out a program of austerity measures designed to bring Argentina's economy out of the death spiral that it is in. Once the wealthiest nation in South America, Argentina suffers from a Bidenesque annual inflation rate of 180%. Despite population increases, its economy has shrunk by almost half the years since 1980. Credit for businesses and consumers is nearly impossible to come by...thanks to the triple-digit inflation. Needless to say, there is virtually no foreign investment. Local businesses are hamstrung by regulations that seem designed to prevent business creation or growth. The public sector is bloated and even more unproductive than one would expect. This is all the legacy of Juan Peron's populist socialism that empowered government and discouraged the private sector.

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After abolishing 12 of 21 government ministries on his first day in office (Javier Milei Takes Office in Argentina, and His First Move Immediately Triggers All the Right People), Milei is starting to work on the rot that has kept Argentina poor.

Less than a week into office, Argentinian President Javier Milei is about to sign a 300-page long "emergency executive order" with a list of business regulations that are repealed.

The first page reads very simply:

REPEAL


pic.twitter.com/tVD4uiz6xX— Daniel Di Martino 🇺🇸🇻🇪 (@DanielDiMartino) December 15, 2023

On Tuesday, Milei's Economy Minister announced a series of emergency economic measures. The goal is to balance Argentina's budget in 2024. The cut is the equivalent of the US reducing its $6.4 trillion budget by $1.4 trillion.

• All government employees hired in the last year will be fired. Caputo said this is to end "a habitual political practice of incorporating friends and family before the end of a presidential term."
• All government advertising will be suspended for a year. "There is no money for expenses which are not strictly necessary and far less to sustain with tax-payer funding media which were only created to sing the praises of the incumbent government," Caputo said.
• Reducing government ministries to nine and secretariats from 106 to 54 will cut senior political posts by over 50%, and the number of political posts will be cut by 34%.
• Transfers of money to provinces will stop except for the bare minimum. These transfers have previously been used to reward friends and buy political favors. Not mentioned is that the government jobs they supported will also go away along with the transfers.
• All public works contracts are canceled unless the project is already underway.
• Energy and transportation subsidies will be reduced. The transportation subsidies are essentially a jobs program.
• Current welfare programs will continue, but an emphasis will be on paying recipients directly rather than through a web of intermediaries. Payments for child care and food will be doubled.
• The Argentine peso is devalued by 54%.

• Quotas and licenses for exports and imports are abolished. In the past, businesses had to get government permission for foreign trade. Caputo said, "This takes the discretionary element out of the process of approving imports, guaranteeing transparency. Whoever wants to import can now do so, full stop."
• Taxes on non-agricultural exports and imports will be raised to the same level as those on agricultural products.

This is a great plan, but the world is cluttered with great plans. Whether this succeeds will come down to who has the strongest will. Argentina's labor unions have vowed to fight Milei's reforms.

Union leaders called urgent meetings as Mr Milei announced more details of his “shock therapy” plans, while Axel Kicillof, the governor of Buenos Aires province from the left-leaning populist Peronist movement, promised: “We are going to fight boldly … we will have to be much more creative and much more militant.”

...

Union founder and campaigner Juan Grabois described economy minister Luis Caputo as a “psychopath on the verge of massacring his defenceless victims”. He said on X: “Do they seriously think people aren’t going to protest? … People won’t allow themselves to be led to slaughter.”

Milei is preparing for the worst from the leftist unions.

Protesting individuals and organizations will be identified with “video, digital or manual means” – and then billed for the cost of sending security forces to police their demonstrations, said Milei’s security minister, Patricia Bullrich, as she announced the new protocol on Thursday.

“The state is not going to pay for the use of the security forces; organizations that have legal status will have to pay or individuals will have to bear the cost,” Bullrich said.

If children show up at demonstrations, their parents are going to jail.

Not only is the economic plan ambitious, Milei does not have a majority in Congress to push it through. Milei's government is also facing imminent insolvency as it owes a $4 billion payment to the IMF and sovereign debt holders at the end of January. He may not succeed (Argentina's New President Is Probably Doomed to Fail but the Path Will Be Glorious), but Argentina will never be the same, and now, at least, it has a chance.

[Sequoyah101]

See what happens when this much of the "economy" is curtailed sharply. Hope he can get it done. We need a lot of the same. This gooberment is bloated.

How long will it be before someone tries to kill him? 5,4,3,...

[rllngrk33]

If Trump gets elected, I hope he tries some of the same things.

[Macho MAGA Man]

(How long will it be before someone tries to kill him? 5,4,3,...)

I’m sure the CIA is already plotting it right now.

[Right_Wing_Madman]

Argentina is a good case study on why democracies fail. People always vote for their own demise.

[Owen]

He is certainly attacking the local Swamp.

Her is how it gets interesting. He announces there will be no IMF payments, ever. He has oil and gas. He has farmland.

Food can grow and be transported.

This is a Drain the Swamp guy. Admirable.

[sauropod]

Very interesting article. Thx for posting it.

[AZJeep]

Impressive!
It makes a lot of sense!
I hope he succeeds.

I would think that 9 ministries is probably too much anyway.

The original cabinet of Pres Washington had four - Secretary of State, Secretary of Defense, Secretary of Treasury and Attorney General.
This, I summon, should be enough even now!
But, good start Javier!

[ShawnShawntheLeprecaun]

Finally a govt willing to live as they ask (demand) that we should live. “Buy a chicken, grow a garden, ride a bicycle...”
Get ready for the bitching and moaning from the communists. “Austerity” is a four-letter word to the Left.
Bring on the chaos!

[rarestia]

America has MUCH farther to fall before this sort of stuff would happen. Argentina is insolvent. The people voted in Milei to fix problems, and he’s doing what he promised. A rare sort of politician.

[texas booster]

After abolishing 12 of 21 government ministries on his first day in office ...

Which is why the DS will never lose another national election.

Not to mention the lawfare which will erupt in the courts.

[SauronOfMordor]

Musk was able to fire 80% of Twitter staff and still keep running. Those fired seemed mainly involved in censorship.

I hope this guy has a good personal security detail. Maybe Musk can loan him some of his.

[Sequoyah101]

We may not have missed an interest payment but we can’t pay our debts back. What is that? We are one of those who files 7 to get to 11. If ever there was a too big to fail this is it. We may have Much further to fall but we are falling and it isn’t stopping.

[Methos]

He’s making Argentina great again !

[Flavious_Maximus]

“Union leaders...we will have to be much more creative and much more militant...”

You see, when the left loses an election they resort to militancy. They don’t just sit on their hands (like the Republican party in the USA) and let the conservative party govern. The left is ALWAYS on the attack, even when they lose badly.

In 13 months, a huge correction is coming to America. Pain and suffering is on the agenda for the likes of Lizard Cheney, Adam Kinzinger, Banjo Boy and his adulterous wife, etc. Glorious revenge and retribution will be given to those treacherous bastards. /spit

[Bishop_Malachi]

You see, when the left loses an election they resort to militancy. They don’t just sit on their hands (like the Republican party in the USA) and let the conservative party govern. The left is ALWAYS on the attack, even when they lose badly.

________________________________________________________

This is why - when the radical Left takes control - a nation must have a politician who is willing to match their ferocity in order to establish some semblance of order and decency.

[Socon-Econ]

He needs to pursue growth — via tax and regulatory incentives — as well as austerity. Ronald Reagan did this successfully, giving us growth to counteract the pain from the high interest rates need to stop inflation.

[Rappini]

I hope he has a top notch protection service.

[Oystir]

Trump loves spending and he loves aggrandizement. If Joe gets to spend X trillion, Trump thinks he get to spend 5X trillion.

[Forward the Light Brigade]

Argentina may well, if this fails, go for a fascist like Evita and Juan Peron. They may have no choice. That or a Communist like China.