Javier Milei Ended a DC-Sized Deficit in...Nine Weeks

[NeoWonk]

Argentina’s Javier Milei is racking up some solid wins, with the fiscal basket case seeing its first monthly budget surplus in 12 years.

Apparently, it took Milei just nine and a half weeks to balance a budget that was projected at 5% of GDP under the previous government. In US terms, he turned a 1.2 trillion-dollar annual deficit into a 400 billion surplus. In 9 and a half weeks.

Our brilliant Harvard and Oxford educated economists and central bank PhDs have been trying for decades to balance the budget, and yet little ole Javier Milei did it in only 9 1/2 weeks.

They're already talking about the "Belgrano School of Economics" displacing "The Chicago School of Economics" as the preeminent macroeconomic theory.

Javier Milei Ended a DC-Sized Deficit in...Nine Weeks | Mises Institute

How did he do it? Easy: he cut a host of central government agency budgets by 50% while slashing crony contracts and activist handouts.

mises.org

 

[Aztangogirl]

Our brilliant Harvard and Oxford educated economists and central bank PhDs have been trying for decades to balance the budget, and yet little ole Javier Milei did it in only 9 1/2 weeks.

They're already talking about the "Belgrano School of Economics" displacing "The Chicago School of Economics" as the preeminent macroeconomic theory.

Javier Milei Ended a DC-Sized Deficit in...Nine Weeks | Mises Institute

How did he do it? Easy: he cut a host of central government agency budgets by 50% while slashing crony contracts and activist handouts.

mises.org

And this is a good thing? Sorry. I don't agree.

 

[mikic007]

And this is a good thing? Sorry. I don't agree.

I take it as sarcasm.

 

[dlish]

If DC also shut down half the state’s departments and services with zero regard for the impact on the lives of its residents, they’d also end their deficit. It’s not very impressive. If he reduced the deficit while not destroying quality of life for Argentine citizens - that would be impressive.

 

[Ruta Otto]

If DC also shut down half the state’s departments and services with zero regard for the impact on the lives of its residents, they’d also end their deficit. It’s not very impressive. If he reduced the deficit while not destroying quality of life for Argentine citizens - that would be impressive.

Not to mention the US military spending is 20% of the total budget while Argentina spends .41% on its military. Apples to watermelons.

 

[NeoWonk]

If DC also shut down half the state’s departments and services with zero regard for the impact on the lives of its residents, they’d also end their deficit. It’s not very impressive. If he reduced the deficit while not destroying quality of life for Argentine citizens - that would be impressive.

If DC shut down half the government's departments and services - the average Joe wouldn't even notice.

 

[sts7049]

If DC also shut down half the state’s departments and services with zero regard for the impact on the lives of its residents, they’d also end their deficit. It’s not very impressive. If he reduced the deficit while not destroying quality of life for Argentine citizens - that would be impressive.

there have been decades of citizens getting screwed by their government with zero regard for their futures. it's far more impressive to make any progress reversing this so quickly.

 

[NeoWonk]

And this is a good thing? Sorry. I don't agree.

Although, I respectfully disagree, I'd still rather take macroeconomic advice from a tango dancer than the Bozos that are currently running things in Brussels and Washington DC...

 

[redlobster]

Our brilliant Harvard and Oxford educated economists and central bank PhDs have been trying for decades to balance the budget, and yet little ole Javier Milei did it in only 9 1/2 weeks.

It's like praising Stalin for increasing GDP per capita by killing a bunch of people. Irrational worshiping of some economic numbers with blatant disregard for the actual negative impact.

 

[FrankPintor]

It's like praising Stalin for increasing GDP per capita by killing a bunch of people. Irrational worshiping of some economic numbers with blatant disregard for the actual negative impact.

I wouldn't go quite so far as the Stalin analogy, let's not invoke Godwin's Law here just yet, but essentially you're right. This was published last week:

Financing Milei’s fiscal surplus: Stories behind Argentina’s reduction in state spending

Argentina recorded its first monthly budget surplus in nearly 12 years in January, President Milei’s first month in office. But according to one analysis, a third of those spending cuts came from a refusal to update pension payments for inflation. A look at the faces behind the figures.

batimes.com.ar

Some quotes: "...a third of those spending cuts came from a refusal to update pension payments for inflation", and "The total saved was 2.7 trillion pesos with the biggest spending reductions coming in pensions (down 885.074 billion pesos), energy subsidies (down 366.451 billion), direct real investment (down 321.474 billion) and total transfers to provinces (down 310.781 billion). Those four items contributed 70 percent of total savings".

So, pensioners, not the "caste" are paying for a large part of the "savings", and the provinces are being impoverished by cutting (potentially illegally, though that's not important to our toddler-president) back their previously agreed funding for, among other things, transport and paying teachers.

I understand that a major part of Argentina's economic problems is that the provinces are profligate, and can independently assume debt, but simply cutting off funding isn't sustainable.

And while all this was going on, our toddler-president tried to sneak through a 48% salary increase for him and his gang, with a decree he himself signed off on in February and then denied. And some people would have us believe he's honest . Though there is some discussion that he might have been so distracted picking fights online with singers and teachers that he simply has no idea what he's signing.

Oh, and inflation data for February is due today. We already got to see who wants to manipulate INDEC's figures now, by claiming that prices are coming down because of discounts and 2x1 offers. Honesty all round it seems