Why is the US going to bail out Argentina?

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Mother-Win-3557@reddit

My understanding is that many of Argentina's creditors are US entities, private equity funds, exporters to Argentina, banks and similar. These entities are in danger of losing their money. They are buddies with Sec Bessent and Mr Trump. So, the good news is that the money remains in the US, out of the ordinary hard-working American taxpayer's paychecks into the pockets of billionaires. Doesnt that give you a warm glow, knowing that you have added another layer of 24K gold to their toilets?

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talksomesmack1@reddit

My bet is like the Nazis after WW2 the magats will need to flee somewhere and once again it will be Argentina.

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andrewxxalexander@reddit

libertarianism, if it worked. wouldn't literally require a starving population or foreign bailouts.

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rawautos@reddit

The United States wants to pretend that Milei’s style of governing will work. Trump touted him all through his campaign and Republicans were saying that Argentina would be the proof that the United States needs to do the same thing with all of our agencies and social programs/policies.

If Argentina fails, Democrats will highlight it as yet another one of Trump’s failures. So Trump can’t let the country fail.

But, like others have said, if we protect Argentina then they’ll be our greatest ally in the region.

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Comfortable-Toe-3814@reddit

but doesn't the fact that Argentina needs a bailout prove that they've already failed?

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rawautos@reddit

100%. But Trump and his fans will always come up with an excuse.

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ComfortableTwo80085@reddit

It was already tried (to a lesser degree) in the US with the Kansas Experiment under KS Gov Sam Brownback. Republicans cheered on this "red-state experiment", then when it not only failed to deliver the promised results, the state went into a full blown financial crisis. To this day libertarians and conservatives argue it wasn't given enough time and not enough of the budget was cut (what Melei has done).

The problem though is KS was projecting massive economic growth always predicted by supply-side economics but reality proves that growth doesn't materially happen. Why? Because business owners have the free will to do what they want with their tax savings (a good thing), and overwhelmingly choose to keep those savings for themselves instead of making labor/capital investments that actually drive economic growth.

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Objective_Web533@reddit

They are not bailing out argentina they’re bailing out the dumb hedge funds that bet on milei. And screwed American soybean farmers in the process. Masterclass in economics

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Son_of_Sophroniscus@reddit

Whatchu mean? Haven't heard anything about this...

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VeterinarianWorth911@reddit

Average informed American voter

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SlightRiverBend@reddit

Idk why the downvotes because this is real lmao

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chrisfathead1@reddit (OP)

https://www.ft.com/content/731a7ddd-128e-4b54-86b6-d7a423167ad5

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mmmmjlko@reddit

If the article in question is about a tweet, I would link the original tweet.

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trav_12@reddit

Paywall

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Pale-and-Willing@reddit

The $20 billion taxpayer-funded rescue package for Argentina, announced last week by the Treasury Secretary Scott Bessent, delivers an enormous windfall to hedge fund billionaire Rob Citrone.

Citrone has a longstanding personal and professional relationship with Bessent.

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ThorndikeTactics@reddit

I tried asking this on u/Trump, and the moderators removed it lmao

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No_Ambition_6141@reddit

I have no idea what's going on with Argentina but I know I'm against the US bailing out ANY country.

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mmmmjlko@reddit

Basically a currency crisis

Oversimplified TL;DR: Argentina tries to control the peso's value by raising interest rates and selling forex reserves. Peronists won the election in the biggest province, so people thought Peronists might win the national midterms in October and make economic policy worse. This caused people to sell the peso. Argentina tried to maintain the value of the peso by manipulating demand for it: raising interest rates and using foreign currency reserves to buy pesos. But high interest rates are bad for the economy, and foreign currency reserves are finite. You also need foreign currency to pay foreigners (imports, debt). There are legal limits on how corporate deposits of foreign currency can be used.

Currency manipulation is not libertarian policy, and can be quite dangerous (see: Argentinian Convertibility plan, Asian financial crisis). However, midterms are in October and Milei's popularity depends on the peso's exchange rate. Moreover, relaxing exchange controls would increase inflation in pesos, especially because some prices in Argentina are set in USD.

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Similar_Addition_603@reddit

good information. but why does Trump care about this? Is it because he wants a right wing Trump-lite figure to stay in power? If so, this is an unacceptable use of our money.

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LogicJunkie2000@reddit

He might be trying to make closer connections with other countries on the continent that might help him with action against Venezuela? - or at least be more willing to look the other way.

I'm guessing he's messing with Venezuela to get rid of the current regime so corporate interests can move in on resources, or perhaps simply to control the news cycle under the guise of 'stopping drugs'.

I'm not really convinced any of these are the case, just theories based on what seems to make him tick in the past.

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DrakoXMusic1@reddit

Is it because he wants a right wing Trump-lite figure to stay in power.

Pretty much yeah

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YoursINegritude@reddit

Yes. Milei has strange hair, runs about making ridiculous statements and should have never been voted in.

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helemaal@reddit

Trump isnt a libertarian.

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flashnimator@reddit

Milei isn't Libertarian either, maybe he was before he got into politics.

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t234k@reddit

Hes as libertairian as Stalin is communist.

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u01aua1@reddit

He isn't perfectly libertarian, sure, but if he doesn't count as libertarian, there are no and can never be libertarians in office

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Gre-er@reddit

No True ~Scotsman~ Argentinian

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A_Few_Good@reddit

Libertarians will always vote for him over a democrat

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helemaal@reddit

What libertarian votes...?

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A_Few_Good@reddit

You answered your own question

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mmmmjlko@reddit

I'm pretty sure it's just Bessent

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chrisfathead1@reddit (OP)

Well better start getting some cash together because we are sending it to a failed state, mainly because it would be embarrassing to Elon if Milei failed

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Ariakkas10@reddit

Oops the mask slipped

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phdoofus@reddit

Libertarianism uber alles. /s

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dale1320@reddit

For starters, let me say I don't like it or endorse it.

If the US doesn't, I'm sure the PRC will be more than happy to get its claws into another South American country like Equador, Peru, and Columbia.

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crioll0@reddit

"Columbia" is a US state, "Colombia" is the South American country you're thinking of.

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dale1320@reddit

Sorry for the misspelling.

But there is no US State of "Columbia". Several cities and a river with that name, but no state name

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crioll0@reddit

Ah, I always thought DC was kind of like a state in itself. TIL! (I'm not from the US).

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chrisfathead1@reddit (OP)

OK so you are saying it isn't necessary for the US to do it to "save" Argentina, but more to avoid giving a hostile actor more influence. That reasoning makes sense, but I don't know enough to say you're right or wrong. But thank you for the serious answer

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dale1320@reddit

I'm not sure the administration would use that reasoning, either. But it does make sense seeing how the Chinese has been acting with their "infrastructure improvement agreements" around the world.

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ChrisWayg@reddit

Well using trade to improve relations with other nations is theoretically more libertarian than using military bases or military threats.

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dale1320@reddit

Agree.

What China does is offer loans to build infrastructure like roads, bridges, dams, airports, seaports, etc., but with strings, like yo be built by Chinese companies, along with interest rates. Then they extort natural resources to "restructure" the loans diwn the road, effectively fraining the client state into becoming moreem dependent on Beijing. They did thus in several countries in Africa, and Sourh America, including Panama where they threatened to rake over the Canal.

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ChrisWayg@reddit

True, and some countries have warned others to be careful with these Chinese contracts. Sri Lanka lost a harbour to the Chinese due to such questionable agreements. As a result Malaysia renegotiated an also questionable railway project.

China did not use force though, but they took advantage of corrupt and greedy governments. Similar things happened with western mining corporations in Asia and Africa, just to give one example, or with the financing of overly expensive projects from the west with the IMF later taking over economic policy in those countries.

We have experienced both in the Philippines, with China as well as North American companies taking advantage of the country. Recently it has gotten more dangerous with the US building out 7 bases in the Philippines so as to defend Taiwan using every last Filipino soldier in a proxy war similar to the Ukraine - Russia war.

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t0rnAsundr@reddit

"Can someone here, in good faith, explain why the US would need to bail Argentina out if Milei has been the success many on the right paint him to be?"

Why are you asking Libertarians to argue from the right's perspective? If you want to ask that opinion, go find people on the right. The right and the left are both big government spenders, in spite of any fiscally conservative rhetoric they may have spewed in the past.

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chrisfathead1@reddit (OP)

Has Milei been an unmitigated success?

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t0rnAsundr@reddit

I have no idea. And what a strange dodge. Who even talks like that? You clearly want a perspective from the right, so I will ask again, why are in Libertarian asking for a perspective from the right? I have no knowledge of the subject matter at hand. I'm just examining your baited question. Why would you think Libertarians can answer from the right? Do you want the Libertarian analysis and prediction of the right's response, or do you think a Libertarian response is a right leaning response? Either way, it's weird man.

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chrisfathead1@reddit (OP)

You OK?

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t0rnAsundr@reddit

Fuck off troll. You don't even have a post history scroll through as you said in you OP.

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mmmmjlko@reddit

Can someone here, in good faith, explain why the US would need to bail Argentina out if Milei has been the success many on the right paint him to be?

Argentina is experiencing a currency crisis caused by an unsustainable currency regime and triggered by a Peronist victory in the largest province.

if Milei has been the success many on the right paint him to be

The probability of a currency crisis is determined mainly by the country's currency policy, not overall economic progress (see: Asian financial crisis, Argentinian convertibility plan).

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AlexThugNastyyy@reddit

Love how Milei is getting shit about the currency issues when they are caused because people believe his adversaries will get more power, not because of anything he specifically did.

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mmmmjlko@reddit

A currency regime's survival should not depend on its proponents' political fortunes.

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Tdot-77@reddit

Argentina is huge and full of resources.

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TrainingBid3238@reddit

I don’t think you’re being disingenuous, it’s a fair question. The “Milei is a total success” line is mostly political cheerleading. Reality is, Argentina’s economy was a train wreck long before he showed up… decades of inflation, debt, and corruption don’t vanish in one year just because a libertarian gets elected.

What Milei has done is slash spending, cut bloated ministries, and try to drag Argentina toward a freer market. That’s why people on the right hype him… he’s actually swinging the axe. But in the short term, that kind of shock therapy hurts, and the international lenders still have Argentina by the throat.

So when talk of a “US bailout” comes up, it’s not about Milei being a fraud, it’s about the fact that Argentina’s hole was so deep, no one could fix it without external help. The left spins that as “he failed,” the right spins it as “he inherited an impossible mess.” Both things can be true at the same time.

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OriginalSkyCloth@reddit

Milei was mashing great strides in opening markets and reducing poverty, inflation, etc. The lefty commies aren’t winning back power in recent elections. The progress Milei made is DOA now. Investors are pulling out and the economy is in turmoil again. Lefties want to reignite the Peso printer and buy votes at the expense of the working class. I don’t support my taxes being stolen for any reason, I hope Argentina voters can see through the veiled bribes of the lefty scum and continue in their success. https://www.france24.com/en/americas/20250908-argentina-milei-electoral-buenos-aires-vote

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chrisfathead1@reddit (OP)

So he can't stop the left from sabotaging things? He's President

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HelpImRunningOutOfSp@reddit

It’s not just what the situation is now, markets are forward looking. What’s happening is that after the recent election results the odds of Milei losing power and his policies being reversed have increased. The market is accounting for that possibility.

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AToastyDolphin@reddit

It’s sort of like how a Republican president can’t get anything done when the House and Senate are Democratic and vice versa. Milei’s party doesn’t have much support within the government

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chrisfathead1@reddit (OP)

So what changed from before he was elected that is prompting the US to give them a bailout beyond anything they've ever done

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namethatsavailable@reddit

What changed is that the “free money for everyone” Peronists massively outperformed expectations in a recent election. Just the thought of them taking control has sent the economy into a tailspin as everyone tries to jump off the soon-to-be-sinking ship

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Similar_Addition_603@reddit

the peronists are not in charge now, the right wing party is, and apparently the economy is so bad, the U.S. needs to prop up their currency.

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namethatsavailable@reddit

I think you understand my point, you just pretend not to.

Or you have no understanding of how financial markets work

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OriginalSkyCloth@reddit

That’s not how democracies are supposed to work. Also losing your support in the legislature extremely knee caps your ability to enact lasting change.

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chrisfathead1@reddit (OP)

Do you think he bears any responsibility for the Argentina being in a position where the US needs to bail them out?

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mmmmjlko@reddit

Milei definitely does. His economy minister's policy of fixing the exchange rate was (1) very interventionist, and (2) very risky.

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OriginalSkyCloth@reddit

Possibly, I don’t know all the Xs and Os. But elections have consequences and the foreign money flight after the election is a sign it wasn’t him. He was on good roll.

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chrisfathead1@reddit (OP)

Fair enough. Thank you for engaging sincerely

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Pleistarchos@reddit

To seize and control its natural resources for getting a bail out. Fortress USA and The Monroe Doctrine is back in full force.

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ThisIsMyCoffee@reddit

"Someday, and that day may never come, I will call upon you to do a service for me. But until that day, accept this justice as a gift..” The Godfather

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L_ast_pacifist@reddit

A. Argentina's Milei supports Israel
B. Israel controls foreign policy of the USA Gov through AIPAC / And other "schemes"
C. USA's Trump will help Argentina.

A + B = C Israel is helping his only ally (besides USA).

Proof : guess which country (and not the insignifiant random islands) besides the USA who voted against UN resolution on an immediate ceasefire ? Argentina out of (140+ countries who voted for).

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Pedromac@reddit

I think it's another money printing operation to have a third/second world company open it's legs to multinational corporations and the US is financing the operation. I'm sure money will go missing. I'm sure money will go where it isn't supposed to. And I'm sure Blackrock will win.

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AbbreviationsActual9@reddit

"Thanks to Trump’s political support, the government agreed to a $20 billion bailout with the International Monetary Fund last April — to which the country still owes another $40 billion — and achieved a measure of calm, but it lasted barely three months."

and now...

" In the last three days of last week, the Argentine Central Bank had to sell a total of $1.11 billion of its meager reserves to maintain the floating exchange rate regime in force in the foreign exchange market. In this critical context, Milei revealed on Friday that he was negotiating a loan from the United States Treasury to help him meet $8.5 billion in debt maturities next year."

" the Republican administration of the United States announced that it “is willing to do whatever is necessary within its mandate to support Argentina.” This support, Treasury Secretary Scott Bessent explained, could take the form of a currency swap, the purchase of foreign currency, or the purchase of Argentine debt denominated in dollars. A Trump bailout would bolster Milei’s hopes of stabilizing the South American country’s currency, reassuring the financial markets and improving his prospects for the october 26 elections."

it's a bandaid to ride out their failed peso collapse until after the elections.

I also hear there's a marvelous new ballroom being built and the donation basket is out. maybe milei can drop a couple of those $LIBRA shit coins he endorsed and some magic US currency will pop out.

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nerd_life@reddit

Please take this with a grain of salt because I haven't been following it closely and it's just conjecture: I assume the Libertarian interest in this story is: wanting a very fiscally conservative government to succeed, NOT in advocating for a US intervention in another sovereign nation's financial affairs. Politically I can see how the Trump administration would want a stable Argentina even if they had to intervene.

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Similar_Addition_603@reddit

I don't think Trump cares about a stable anything. Argentina must have something he wants or as someone else said, he is looking for a puppet state.

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chrisfathead1@reddit (OP)

I agree with this 100%, I assumed this was a given to anyone reading the story. My question is, it would look better for anyone on the right if Argentina were to flourish under Milei without the US stepping in to save them. All I have heard in right leaning/libertarian type subs is that Milei has been an overwhelming success and it's proving beyond doubt that his type of governance will result in success. I want to hear the perspective of someone who believes this to be the case on why the US would need to bail them out in Milei has been an overwhelming success

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Acceptable_Taste9818@reddit

I would guess because Javier Milie is an ally to Trump. And with Brazil and Venezuela cold he needs a strategic partner in South America.

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Certain_Winner6220@reddit

I haven't heard much about it but my gut tells me its either

A. The US government wants to take credit for milei's success

B. The US wants a puppet state

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LagerHead@reddit

gif

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SlavaAmericana@reddit

The Treasury Secretary stated today that they are considering to buy their currency and or buy their debt to help with economic issues they are having.

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chrisfathead1@reddit (OP)

The stories I saw said that Argentina is not doing well at the moment, not that Milei is having great success

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Certain_Winner6220@reddit

Argentina has been really bad for a really long time and if you compare Argentina under milei to Argentina under anyone else the numbers are pretty clear. Argentina is doing amazing compared to how it was before melei.

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chrisfathead1@reddit (OP)

Again, correct me if I'm wrong, but the US is now discussing a direct cash bailout to Argentina, whereas in the past it has been done on a smaller scale through the IMF. Wouldn't that suggest Argentina is in worse shape now than it was previously?

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Certain_Winner6220@reddit

Argentina's annual inflation dropped from 211 percent when he took office down to 33.56 percent as of today.

Argentina's interest rates have fallen down to 29% compared to the 126% rate just before he took office.

The only real negative that persists currently is that argentina's GDP has declined since he took office. This is due to the fact that Argentina no longer borrows recklessly and government spending has been cut by a fuck load. Its short term pain for long term gain.

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chrisfathead1@reddit (OP)

So then again, why didn't they need to be bailed out when before and they do now?

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AcceptableEditor4199@reddit

We want beef.

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