Connect with us

Economy

Argentina’s Milei Goes All in on ‘Shock’ Policies in Bid to Save Country’s Economy

Published

7 minute read

From Heartland Daily News

Originally published by The Daily Caller.

“It’s a real shift worth celebrating, given that most investors did not have confidence in his ability to reduce the deficit just a few weeks ago. If anything, perhaps he’s going overboard in some ways.”

Javier Milei, Argentina’s newly elected libertarian and self-described “anarcho-capitalist” president, is embracing sweeping reforms to save the country’s struggling economy, even in the face of overwhelming obstacles.

Despite challenges arising from lawmaker opposition and a soaring inflation rate that has plagued the country for years, Milei’s “shock” adjustment actions have improved market and investor confidence both among the Argentinian population and abroad. Milei inherited a 140% inflation rate, an impoverished population and hundreds of billions in debt when he took office in December.

Milei acknowledged on the day of his inauguration that Argentina’s economy would temporarily get worse while he embraced “shock” adjustments to start making fixes.

“They have ruined our lives … There is no money!” Milei said during his inauguration speech. “Therefore, the conclusion is that there is no alternative to adjustment and no alternative to shock … this is the last straw to begin the reconstruction of Argentina.”

One of Milei’s first actions as president was to slash Argentina’s bureaucratic ministry from 18 to nine in a bid to reduce government spending, fulfilling a promise he made on the campaign trail, according to Reuters. Milei and his supporters saw several of the agencies as ineffectual and bloated with cash, including the Ministry of Transportation and Public Works, Tourism and Sports and the Ministry of Environment and Sustainable Development, which were absorbed by other existing ministries, according to the CATO Institute.

Milei also allowed the value of the peso currency to plummet by 50% in December to reduce export costs while also increasing the import costs, according to The Associated Press. The goal is to close the trade gap, making Argentina a bigger global trade competitor and stem the flow of money leaving the country, which would increase the stockpile of its exhausted foreign currency reserves.

The eventual plan for Milei is to replace the peso currency entirely with the U.S. dollar, another promise he made on the campaign trail, according to NPR. The U.S. dollar is prized in Argentina because it is generally stable and holds its value longer than the peso.

Temporary tax hikes were imposed by Milei’s administration to reduce the national debt and start balancing the budget according to the AP. Argentina’s budget deficit currently sits at 3%, and Milei has promised to balance it this year, according to Reuters.

Milei sent an omnibus reform bill to Congress in December that would privatize state-owned companies and raise export taxes, and remove limits on bonds issued overseas and on debt restructure rules, according to Reuters. He also issued a separate presidential decree in December to deregulate Argentina’s economy.

These actions are already having positive impacts. Argentina’s monthly inflation slowed down to 15.3% in February, much lower than the spike in December, according to Reuter’s forecast. The country also saw a monthly budget surplus in January for the first time in over a decade.

“The Milei administration has inherited a steep stabilization task, but has already taken some important steps toward restoring fiscal sustainability, adjusting the exchange rate, and combating inflation,” U.S. Secretary of Treasury Janet Yellen said during a press conference in late February.

Argentinian citizens have deposited over $2.3 billion in dollar-denomination banks since Milei took office, restoring the entirety of the banks’ losses from the last year and signaling that the population feels stability, as withdrawals typically increase during unsteady times, according to Bloomberg. Argentina’s bonds are at four-year highs and the country’s risk index has fallen to a two-year low, according to Reuters.

“The market is becoming very optimistic about Javier Milei’s conviction,” Javier Casabal, a Buenos Aires-based fixed-income strategist at Adcap Grupo Financiero, told Reuters. “It’s a real shift worth celebrating, given that most investors did not have confidence in his ability to reduce the deficit just a few weeks ago. If anything, perhaps he’s going overboard in some ways.”

Milei still faces several roadblocks. Inflation is still at record highs and poverty continues to consume much of the Argentinian population. Major provisions in Milei’s reform bill were blocked in early February by the country’s Congress, which he has referred to as a “nest of rats,” according to Reuters

Milei vowed to Congress during a speech on March 1 that he would “speed up” his reform plans, encouraging them to join his efforts but warning that he did not need them to accomplish his goals, according to Reuters.

“We won’t back down, we’re going to keep pushing forward,” Milei said. “Whether that’s by law, presidential decree or by modifying regulations.”

Milei’s government is now considering breaking up the reform bill and passing provisions separately through Congress, according to Reuters. He is requesting lawmakers to agree to a 10-point social pact, which would include negotiations in discussions on economic reform, by May 25.

Originally published by The Daily Caller

For more public policy from The Heartland Institute.

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Economy

‘What constitutes a border crisis?’ Sanctuary cities have found out

Published on

Migrants and migrant bedding inside O’Hare International Airport in Chicago.                 

From The Center Square

By

Yeah, you liked them when it wasn’t your problem because you’re not a border state. And then when they show up in Chicago and New York, you’re like ‘What the [expletive] are we going to do with these people?’”

In March 2021, the Los Angeles Times published a story with a headline that asked, “What constitutes a border crisis?”

The story quoted then House Republican Leader Kevin McCarthy as saying, “There is no other way to claim it than a Biden border crisis.”

Then the LA Times asked, “But is it a crisis?”

Just a month later in April 2021, New York City Mayor Bill de Blasio released a statement about his city being a sanctuary city.

“New York City is proud to be a welcoming and inclusive city for immigrants,” de Blasio said at the time.

The debate in the U.S. on migrants took off in April 2022 when Texas Gov. Greg Abbott decided to take a stand against President Joe Biden and what Abbott called an open border policy.

Abbott stated that Biden’s repeal of Title 42 – a pandemic-era policy that allowed the government to quickly expel arriving asylum seekers – had created an “unprecedented surge of illegal aliens” into the country with as many as 18,000 apprehensions a day.

Abbott said that Texas border towns were being overrun by migrants and were overwhelmed. His solution was to bus many of the arriving migrants to sanctuary cities across the U.S.

In August 2022, when the first bus of migrants leaving Texas arrived in New York, Abbott was clear why he had his state paid for the trip. New York had a new mayor by then.

“New York City is the ideal destination for these migrants, who can receive the abundance of city services and housing that Mayor Eric Adams has boasted about within the sanctuary city,” Abbott stated in a news release. “I hope he follows through on his promise of welcoming all migrants with open arms so that our overrun and overwhelmed border towns can find relief.”

And just over a year later, New York Gov. Kathleen Hochul was on CNN in September 2023 pleading with immigrants to “go somewhere else.”

How it has played out was not lost on liberal comedian Bill Maher.

“Could everyone just stop the posturing?” Maher said on a July 2023 podcast with Sharon Osbourne. “Don’t pretend that you love migrants so much and then when we send them to you, you don’t like them. You know? You’re full of [expletive]. And we can see that. Yeah, you liked them when it wasn’t your problem because you’re not a border state. And then when they show up in Chicago and New York, you’re like ‘What the [expletive] are we going to do with these people?’”

New York wasn’t the only destination for Abbott’s buses. He also targeted other sanctuary cities, such as Washington, D.C, Chicago and Denver.

The New York Times published an article in July 2023 that had a headline that asked, “Is Texas’ Busing Responsible for the Migrant Crisis Across Cities?”

On June 14, Abbott’s office stated that it had bused 119,200 migrants to six sanctuary cities since August 2022. That included 45,700 migrants to New York City and 36,900 migrants to Chicago since August 2022. There were also 19,200 migrants bused to Denver since May 2023 and 12,500 migrants bused to Washington D.C. since April 2022.

But Abbott wasn’t alone in busing migrants from the border to locations throughout the country. The Democratic-run city of El Paso also bused migrants north.

Democratic Arizona Gov. Katie Hobbs stated in September 2023 that Arizona was “overwhelmed” by the flow of migrants into her state. Arizona spent $10.5 million transporting 10,247 migrants out of state as of September 2023.

That’s just part of a bigger surge of migrants into the U.S. Since Biden took office in January 2021, about 12 million illegal border crossings have been documented, according to U.S. Customs and Border Protection data and a compilation of “gotaway” data obtained from border agents by The Center Square. Gotaways is the official CBP term to describe those who illegally crossed the border between ports of entry but who were not apprehended. CBP does not publicly release “gotaway” data.

The increase in migrants has hammered the budgets of sanctuary cities.

Washington, D.C. created an Office of Migrant Services with an initial start-up cost of $10 million in 2022. In 2025, the city budgeted $39 million for that office.

Chicago has spent $299 million on migrants since 2022, according to a March 2024 report by the Illinois Policy Institute, and that does not include the hundreds of millions of dollars state taxpayers have paid for costs such as migrant health care.

New York City Mayor Adams said in August 2023 the migrant crisis may cost his city $12 billion over three years.

The city of Denver stated in April 2024 that the increase in migrants has cost it $63 million.

The cost to taxpayers in the state of Texas was $13.4 billion in 2023, according to the Federation For American Immigration Reform. Only California had a higher cost at $30.9 billion.

Ira Mehlman, spokesman for the Federation For American Immigration Reform, said Abbott’s busing strategy has worked.

“His busing policy exposed the hypocrisy of many sanctuary jurisdiction politicians who extolled the virtues of mass immigration regardless of its legality, but are not so happy when they actually have to deal with the real impact of large numbers of migrants,” Mehlman said in an email to The Center Square. “So long as it was someone else’s problem, they were happy to virtue signal and criticize others. Once it became their problem, they demanded that Abbott and others stop sending them migrants. For years, these sanctuary proponents claimed that illegal aliens were a benefit to the country, but are now demanding federal assistance to manage to cover their costs, exposing the fact that illegal immigration imposes huge fiscal costs.”

Managing Editor

Continue Reading

Economy

Toronto, Vancouver named “Impossibly Unaffordable”

Published on

From the Frontier Centre for Public Policy

By Courtney Greenberg

Two Canadian cities — Toronto and Vancouver — have earned the title of “impossibly unaffordable” in a new report.

“There has been a considerable loss of housing affordability in Canada since the mid-2000s, especially in the Vancouver and Toronto markets,” according to the Demographia International Housing Affordability report, which is released annually.

“During the pandemic, the increase in remote work (working at home) fuelled a demand increase as many households were induced to move from more central areas to suburban, exurban and even more remote areas. The result was a demand shock that drove house prices up substantially, as households moved to obtain more space, within houses and in yards or gardens.”

Vancouver was the least affordable market in Canada, and the third least affordable out of all of the 94 markets observed in the report. The West Coast city’s affordability issue has “troublingly” spread to smaller areas like Chilliwack, the Fraser Valley, Kelowna, and markets on Vancouver Island, per the report.

Toronto was named as the second least affordable market in Canada. However, it fared slightly better than Vancouver when it came to the other markets, ranking 84 out of 94 in international affordability.

“As in Vancouver, severely unaffordable housing has spread to smaller, less unaffordable markets in Ontario, such as Kitchener-cambridge-waterloo, Brantford, London, and Guelph, as residents of metro Toronto seek lower costs of living outside the Toronto market,” the report says.

The findings of the report have “grave implications on the prospects for upward mobility,” said Joel Kotkin, the director at the Center for Demographics and Policy at Chapman University, a co-publisher of the report along with Canada’s Frontier Centre for Public Policy.

“As with any problem, the first step towards a resolution should be to understand the basic facts,” he said. “This is what the Demographia study offers.”

The report looked at housing affordability in 94 metropolitan areas in Australia, China, Ireland, New Zealand, Singapore, the United Kingdom, the United States and Canada. The data analyzed was taken from September 2023. The ratings are based on five categories (affordable, moderately unaffordable, seriously unaffordable, severely unaffordable, and impossibly unaffordable) with a points system to classify each area.

The report determined affordability by calculating the median price-to-income ratio (“median multiple”) in each market.

“There is a genuine need to substantially restore housing affordability in many markets throughout the covered nations,” said Frontier Centre for Public Policy president Peter Holle, in a statement. “In Canada, policymakers are scrambling to ‘magic wand’ more housing but continue to mostly ignore the main reason for our dysfunctional costly housing markets — suburban land use restrictions.”

Toronto and Vancouver both received the worst possible rating for affordability, making them stand out as the most expensive Canadian cities in which to buy a home. However, other Canadian markets — like Calgary, Montreal and Ottawa-gatineau — stood out as well. They were considered “severely unaffordable.”

“This is a long time coming,” senior economist with the Canadian Centre for Policy Alternatives David Macdonald told CTV News.

“We haven’t been building enough housing, we certainly haven’t had enough government investment in affordable housing for decades, and the chickens are coming home to roost.”

The most affordable Canadian city in the report was Edmonton, which was given a rating of “moderately unaffordable.” The city in Alberta was “at least twothirds more affordable” than Vancouver.

Overall, Canada ranked third in home ownership compared to the other regions observed in the report. The highest home ownership rate was in Singapore, at 89 per cent, followed by Ireland, at 70 per cent. In Canada, the rate was 67 per cent.

First published in the National Post here, June 17, 2024.

Courtney Greenberg is a Toronto-based freelance journalist writing for the National Post.

Continue Reading

Trending

X