Argentina: has Javier Milei proved his critics wrong?
Posted by SunderedValley@reddit | anime_titties | View on Reddit | 88 comments
Posted by SunderedValley@reddit | anime_titties | View on Reddit | 88 comments
Isphus@reddit
Inflation-adjusted wages going 11% up in under a year? Check.
Debt going down? Check.
Taxes going down? Check?
MASSIVE growth? Actually, check. The public spending cut was 12% of the GDP. The GDP dropped 3%. Where did the other 3% go? They went from a GDP of 44 for the government and 56 to the private sector to 32 for the government and 68 to the private sector. MASSIVE growth for the non-leech part of the economy.
Poverty rate going down? Check.
Inflation at a tenth of what it was before? Check.
Cost of rent going down? Check.
Cost of food going down? Check.
Violence going down? Check.
Every available metric shows he's doing great, and that's before we consider that the ones most benefiting are the ones in the informal economy. Half of Argentina's workers are informal, a quarter work for the government, and a quarter have formal jobs in the private sector. Those informal workers are the ones who most benefit from low inflation and less of the very regulations that threw them into informality.
MelaniaSexLife@reddit
are you completely mental?
poverty reached a record all-time high in argentina
stores are closing down EVERYWHERE
cost of food went THROUGH THE ROOF
we have US prices with a 4th world country minimum wage!!!
there's unlimited number of shorts on the usual networks recommending to NOT buy in Argentina since it's insanely expensive now
Nukered@reddit
A 38% bajo la pobreza kukardo
Radiant-Ad-4853@reddit
kuka
yUQHdn7DNWr9@reddit
That’s not how GDP is calculated. Spending is not the same thing as production.
Isphus@reddit
True, spending is not the same as production.
But spending is what the GDP measures, and we use it as an estimator of production.
This is why Russia's GDP is booming, even if the economy has gone to shit. Big government spending inflates the numbers, even if its all being spent on paying young men to go die or build bombs that disappear once used and leave you with nothing.
yUQHdn7DNWr9@reddit
Government purchases of goods and services yes, but government spending is largely made up of transfers, which do not have any corresponding production.
TheJewPear@reddit
Government spending is absolutely a component of GDP.
MelaniaSexLife@reddit
not yet. He still needs to fix a million issues.
so far, the poor got poorer, the rich got richer.
There's light at the end of the tunnel, we'll see if he crashes and burns. It's on par for these idiots.
Radiant-Ad-4853@reddit
mejor estas aqui : r/Republica_Argentina
ZumasSucculentNipple@reddit
It's a bubble that's gonna burst five to ten years from now when the consequences of major public spending cuts and deregulation will be really felt. But by then he will be living a comfortable life in the US doing the lecture circuit and blaming his successors for the problems.
blenderbender44@reddit
Over protectionism, regulation and public spending is why their economy was failing. What was it like 40% of the population was employed by the government just to give them something todo, No country on earth could do that without facing eventual economic collapse. Massive deregulation is what they needed to reach a similar level of regulation as most western nations for eg
ZumasSucculentNipple@reddit
Doubting that 40% figure. Argentina has a population of 46ish million. That would mean 18.4 million people are employed by the government in a country where only 14ish million people are actively employed. It doesn't seem like you know what you're talking about.
blenderbender44@reddit
Yeah, I said, "what was it like..." The word "like " in that context means it's a guestimation, because I Didn't want to spend time looking up the actual number and being 100% accurate for the number isn't relevant to my point. Also please don't make me explain the word guestimation
ZumasSucculentNipple@reddit
Yeah, retreat into semantics and pretend that you were guestimating. Just take the L.
blenderbender44@reddit
My wording was accurate, I think maybe you're not a native english speaker? This is how English slang works, it can be difficult for non native speakers to
ZumasSucculentNipple@reddit
You said 40% of the population was employed by the government. This is factually incorrect no matter how many "likes" and guestimations you use.
It's like, factually incorrect.
I found the answer within 30s, so if it's going to take you 10 minutes, that's your L.
Your point is incorrect. Only roughly 25% of the working population were actively employed by the government. At its height, the Argentine government employed 3.5 million people and had a working population of >14 million people.
Like, you're wrong. It's, like, OK to admit that.
blenderbender44@reddit
I said, "what was it like 40%" . It's a question, and your misunderstanding is on you.
You're a non native speaker that's why your having trouble and thats okay. . 25% still reinforces my point?
Radiant-Ad-4853@reddit
you are not 100% wrong. several provinces like formosa and yuyuy have nearly 50 % of people employed by the state.
blenderbender44@reddit
If you want to provide evidence that that 25% of the population being employed as social welfare was not a big factor in their economic problems, go for it, otherwise my point remains
ZumasSucculentNipple@reddit
If you want to provide evidence that 25% of the population was employed by the Argentine government, feel free to do so. That should be about 11-12 million people. Find me those figures.
blenderbender44@reddit
Again, I don't care enough to spend the time, Im doing more important things. You stated 25%, that sounds right and I believe you. and about what I remember, And that sort of high number, as well as trade protectionism (High import and export tax) was a major factor in their economic issues.
There's some interesting docos on youtube about it i'd rather send you
ZumasSucculentNipple@reddit
Nah. I'm bored of this since you're missing my point either on purpose or otherwise and I'm no longer interested in wasting my time. Cheers.
blenderbender44@reddit
Here you go, this video is good, here's a specific number, argentina was spending 62% of their federal budget, on welfare.
https://youtu.be/oJh1pSYjOy0?si=PyU-8YW3AcDAHfKt
Pretend_Age_2832@reddit
One statistic to bear in mind while we tear apart the "what was it like 40%" employed by the government speculation: more than 50% of the employees are 'informal', (or 36%, depending on your source) meaning they're not contributing to pensions or paying taxes, or protected against labor abuses. It's not uncommon to buy something in a respectable store (or have a tradesman visit), and get a 10-15% discount for paying cash. People seem unconcerned about an AFIP investigation (their IRS, for US readers).
The discount for cash sales used to be a semi-legit policy, because inflation meant that by the time they got paid by the CC company, the pesos were worth less, and the business took a hit. Now that's not really an excuse, but you still get a cash discounts. Practically no one here reports all income, and it's normal for the upper classes to have an offshore account in Miami.
This gets complicated, and i can't say I totally understand it, but Milei offered a program to bring offshore assets back to the country 'laundered' (without penalty, but with some tax). This seems to have added over a billion dollars to the official banking system, but that program is set to end in March 2025(?). Like I said, it's complex and I don't pretend to fully grok it. But it certainly pumped up the numbers. A lot of people down here expect the peso to fall relative to the dollar once the program ends, and people return to offshoring wealth.
People are in the habit of keeping physical US dollars at home, or locked in a safety deposit box, since they don't fully trust the banks (see the 2001 Corralito). This has not changed. There's no 'velocity of money', with high interest rates (32%) and mortgages practically nonexistent.
Suffice to say, they have systemic economic problems other than government spending. As we learned in the 2024 US election, good macro indicators don't always 'trickle down' to the man on the street, so don't be too surprised if people's patience wears thin. Milei has made six trips to the USA in his first year, because if he doesn't get investment or favorable trade deals, this whole thing is going to fizzle out.
blenderbender44@reddit
Yes that makes sense, what about the other factors like trade protectionism, where Argentina had really high import and export taxes, making Argentina really uncompetitive on the export market?
Pretend_Age_2832@reddit
It's weird to me that Milei's not lifting import taxes on electronics, which is where a lot of people feel the pain (they can be 2x the price of the USA). They're not making iPhones locally, so that's just a revenue generator, from what I see.
Other things like clothes and appliances are manufactured here, and those industries will be destroyed if they have to compete with imports from China. Do they really have high export taxes? They seem to export a lot of commodities. People couldn't live on Chinese wages, so I don't see how they. compete on a lot of other things. Feel free to tell me about specific markets where they could be exporting more, I don't follow that.
His road ahead is tricky. Prices on food have gone up a lot since they ended subsidies, same with electric and public transport. So the 'Casta' is not really bearing the brunt of the adjustment, and wages haven't kept pace with real COL.
I see what he's done so far in a negative light, but I'm not a business owner or investor down here, just someone who spends a lot of time over the past decade (and has friends who watch every peso now). I would guess the end result is a lot of privatization and a smaller middle class, but some people at the top will make fortunes.
Zipz@reddit
Just to add to this
The United States goverment for example employs only about 15% of the workforce.
Doing 40% isn’t sustainable
TheJewPear@reddit
Even 15% is high when you think about it. That would be like 15% of a company’s staff being HR and finance. It just makes no sense.
ZumasSucculentNipple@reddit
In what word do you think that the majority of government workers are HR and finance? I mean this as respectfully as possible, but are you stupid?
TheJewPear@reddit
Government workers don’t produce direct value, they create the environment for others to produce value. They’re supposed to keep people safe, healthy and educated so that they can go on to create value. In that sense they are similar to HR, finance and administration staff in companies, whose only purpose is to create the best environment for everyone else to produce direct value.
You could also take a bit of time to think about the meaning of what people write before taking it literally and calling them idiots. Then again, our governments have been really bad at keeping people educated, so I cannot fault you alone for your comment.
ZumasSucculentNipple@reddit
Oh so if we pretend "HR and finance" mean whatever you want it to, then yes. If we like to live in a world where words have meaning, then no.
TheJewPear@reddit
That’s what they mean. HR and finance don’t build products, don’t market and sell products, don’t support customers, their only function is to enable the rest of the company to do those things. Similarly, it should be people and private enterprises that build products, sell them, support them, etc - and the role of the government is to enable all of that, by keeping everyone safe, by protecting workers and consumers, etc.
Don’t you agree?
ZumasSucculentNipple@reddit
This is probably a lie. Federal government only employs like 5 million people or something and the US has a working population of nearly 170 million.
Old_Wallaby_7461@reddit
This is the opposite of a bubble.
Argentina's problem- unlike in so many other cases (Germany under Merkel...)- actually is overspending which caused runaway inflation. The remedy to that is radically reducing the money supply, which is exactly what he's doing.
There's no other way to beat inflation unless you can magic up an equivalent amount of goods and/or services to spend that money on.
Platypus__Gems@reddit
Milei started a recession tho, the GDP has shrunk.
So while he decreased money supply, he also decreased the goods and services. Which means economy is getting fucked either way.
Old_Wallaby_7461@reddit
That's how it works.
The US had sticky inflation caused by excessive Vietnam war spending during the 1970s and it didn't get fixed until Paul Volcker of the federal reserve cranked interest rates all the way up to 17% and caused a big recession 1980-1982.
The latest US inflation spike is just about the only one that didn't get ended by a recession.
Wilder9507@reddit
So, let me get this straight: average people have to suffer because the made up rules of made up money.
Radiant-Ad-4853@reddit
yes thats how it works. latin america has been like this for centuries. for an example look at fujishock in Peru in 1992 short pain was rewarded by the 30 years of non stop growth.
Old_Wallaby_7461@reddit
There's no free lunches in monetary policy. Spend too little and people suffer immediately. Spend too much and people are okay at first and suffer later.
Wilder9507@reddit
Perhaps this is an indication that modern humans fixation with money is incredibly stupid and we should move toward a moneyless society.
Old_Wallaby_7461@reddit
What does a 'moneyless' society look like, and how would you recompense people for doing shit but necessary jobs in such a society?
lewllewllewl@reddit
The people who make food, housing, and life saving medication will simply continue to do so, we can just ask them nicely
BluffJunkie@reddit
There was a technical recession in 2021-2022 in the US. But they didn't go by that definition for some reason.
Old_Wallaby_7461@reddit
Nope. Economy only shrank in Q1 2022. Grew the rest of the time.
That was when inflation was highest, too. Didn't go down until growth picked back up again.
BluffJunkie@reddit
I'll have to look again. But I swore 2021 Q4 was also down. Either way. It was close if it wasn't for all those stock buy backs and interest rate changes happening it could have been terrible.
__DraGooN_@reddit
If your country is in a giant hole dug by decades of overspending and frivolous socialism, I don't think there is a way to get out of the hole without significant pain or hardship to the population.
Disastrous_Visit_778@reddit
"frivolous socialism"
NP_equals_P@reddit
It's a disaster. The economy shrunk 3.5%, there are no investments, the central bank's net assets are billions in the negative, the amount of dollars produced by the country is less than the interest on the IMF loan.
MelaniaSexLife@reddit
to be fair, there could be investments next year. Since Riesgo Pais went down in half, then loans for business have more availability.
Now... will someone actually invest in Argentina? Will they?
NP_equals_P@reddit
That's the whole thing: with inflation down, less public spending, etc. now should be the moment to attract investments. But Milei did everything wrong internationally isolating the country. The EU-Mercosur agreement could help but will take time. Also now is a period of months that no payment is due to the IMF so it should happen now. When next payment is due (I guess february, but i'm not sure) it will be a mess. Meanwhile the private creditors will try to go for the central bank that lost autonomy and other sovereign assets. From an investor/vulture point of view it makes more sense to wait until the whole thing collapses and resources will be up for grabs.
Fettlol@reddit
It made a handful of people very rich at the expense of the broad majority, so it's a success by libertarian standards
NP_equals_P@reddit
Yeah. The amount of Black dollars held by argentines is estimated in 277 Billion, the largest amount of dollars outside the US, and it's not coming back.
cheaptissueburlap@reddit
Which is the only way to get enough disinflation to come back to reasonable rates. That's typical globalistt takes, manipulation of the narrative.
Disastrous_Factor_18@reddit
He’s done well. These types of extreme libertarian economics have historical proven well in devastated economies and he’s pulled the strings well enough.
Putin_Is_Daddy@reddit
How’s the poverty rate going
Isphus@reddit
Down actually.
It peaked a little bit when they stopped masking the data, but has gone steadily down since January.
MelaniaSexLife@reddit
poverty is at an all time high. Stop spreading bullshit.
Putin_Is_Daddy@reddit
Source?
Isphus@reddit
[P.S.: Look what else just popped unannounced into my feed]()
Isphus@reddit
One pro-Milei newspaper saying it went down 7.5 percentage points.
One anti-Milei newspaper saying b-but its still high!
Putin_Is_Daddy@reddit
https://www.aljazeera.com/amp/news/longform/2024/12/7/a-year-into-javier-mileis-presidency-argentinas-poverty-hits-a-new-high
Isphus@reddit
Interestingly, the data they use only goes up to the first semester.
Here is the source your article quotes.
And here is a quote from that very link your article provided:
Translated
Thank you for yet another source that proves me right!
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_Kiith_Naabal_@reddit
Dude, it was 41.7% in the second half of 2023. It went up 52.9% by 2024 and you are celebrating that it went down to 49 hah.
Isphus@reddit
Like i said, it peaked in January when they stopped masking the data, and has gone steadily down since.
Read the articles before going against official data.
Disastrous_Factor_18@reddit
It’s increased as it was already trending upwards he came into power as the whole economy was going to shit. I’m not saying his policies have magically improved every facet of life in Argentina but he’s obviously made a major shift at the core of their economy which has had a lot of positive effects and projected positives.
Pretend_Age_2832@reddit
Like all politicians, he blames the bad stats on the previous administration, and takes credit for the good stats in the same time period. Funny how that works.
Disastrous_Factor_18@reddit
This is a lot different. He’s making radical changes that are having radical effects that are obviously linked to his policies.
Pretend_Age_2832@reddit
The effect you see on the ground is more people digging through the trash bins for food and cardboard, and sleeping on dirty mattresses on the street. But I'm sure it looks good on paper.
Disastrous_Factor_18@reddit
Yes there are major economical shifts that are projected at recovering the economy. There are very good indicators on paper.
Pretend_Age_2832@reddit
Javier milei’s backers must spend a fortune on bots, but it seems to be working.
Disastrous_Factor_18@reddit
Great retort and overall great argument made against all of my points that still stand.
Putin_Is_Daddy@reddit
lol it’s gotten a lot worse… he cut all social programs and most federal jobs. It’s not rocket science that people are getting poorer.
Disastrous_Factor_18@reddit
This comment just doesn’t make sense. That’s not how economies work.
Putin_Is_Daddy@reddit
If you don’t have an income then you get poorer, if you have to spend what little you have on things once provided for you then you get poorer. Use your brain for like 5 seconds.
Disastrous_Factor_18@reddit
Terrible logic. Where does the money come from that provides the government aid? Does taking that money obstruct growing an economy? There’s a good chance I’m talking to a teenager right now.
Putin_Is_Daddy@reddit
lol your projection is hilarious.
Disastrous_Factor_18@reddit
Great retort.
ManWithWhip@reddit
Look at the username and proceed to disregard everything he sais.
Putin_Is_Daddy@reddit
Please don’t hit me
pham_nuwen_@reddit
He can't magically change poverty in a year when the previous governments shit the bed
Zipz@reddit
Honestly it’s mind blowing. People expect him to fix the economy over night with no growing pains. Even after he’s clearly said there would be some growing pains.
Putin_Is_Daddy@reddit
Millions of more people entering poverty is just a growing pain lol
Zipz@reddit
Poverty rate has already peaked and is going down. Let alone the inflation rate is down 90 percent.
About 30 percent of the country is employed by the government. In the United States it’s about 15 percent. The numbers aren’t sustainable for Argentina. This needs to happen.
Zipz@reddit
It’s even out and inflation has gone down
giant_shitting_ass@reddit
Anyone who confidently think they have the answer to this is just showing off their ignorance. The long term success of his policies hinge on wherer the Argentine government has the political discipline and capital to do it consistently and competently, which I bet not even Millei himeslf 100% knows.
Also when's the last time you've seen anyone in media or Reddit for that matter correctly predict long term economic trends. (Looking at you WSB)
joaoyuj@reddit
Well. You can always opt to go live there if you think as him as a genius or savior. There is no over spending by the government. What he did was: you can not have debts if you are not expending. But, as soon as the private companies take care of the public goods, the crash will come. The poverty increase and a few is feeding on the loot of what is being dismantled, nothing new, once the stock runs out and there are nothing more to cut down... It is over.