Milei's effectiveness in controlling inflation produce modest surplus

3,190 Views | 38 Replies | Last: 5 mo ago by vansprinkle
akm91
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Quote:

So how is he en route to deliver such a massive shock to the stale economic orthodoxy? Fundamentally, he got three big calls right.

First, even without a majority in parliament, he has been ruthless. Whole government departments have been closed down overnight, regardless of the immediate consequences. The Ministry of Culture was axed, so was the anti-discrimination agency, and the state-owned news service. Only last month, he unveiled plans to fire another 70,000 state employees.


Milei hasn't attempted to cut gradually, to control budgets, or to ease people out with early retirement, or hiring freezes. Instead, he has, as promised, taken a 'chainsaw' to the machinery of the state, yielding huge savings in the process.


Next, he has been bold. The president massively devalued the peso on day one, taking the financial hit upfront, and then tore up rent controls, price restrictions and state subsidies. He pared back workers' rights, reducing maternity leave and severance compensation, and allowed companies to fire workers who went on strike.

If only we can do this; EPA, Dept. of Education are two that comes to mind immediate. PBS funding should be pulled as well.

Milei has been wildly effective in slashing inflation from over 300% to 11% in just few short months.

Milei controlling inflation


DrEvazanPhD
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Ag87H2O
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If Trump wins, he needs to follow this model. Don't listen to the complaints and whining. Just do it, fade the heat in the short term, and reap the long term benefits.

Reagan acted boldly early in his first term and made decisions that were universally lambasted by the Democrats and the media. It was painful at first, but by 1983, things started turning around dramatically for the better.

Conservatism works every time.
Hungry Ojos
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But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.
akm91
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I'm sure they have some type of welfare program but he's most likely cut back those programs. He has reduced severance compensation as noted in the quote above.
Definitely Not A Cop
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Hungry Ojos said:

But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.


He laid them off too.


(I don't actually know if he did or not)
Madman
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Watching the reporting on this guy is wild. My youtube feed at any given moment will have videos not older than 12 hours with titles either telling me he is failing completely, or that he is a completely successful. Nothing in the middle.


javajaws
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akm91 said:

Quote:

So how is he en route to deliver such a massive shock to the stale economic orthodoxy? Fundamentally, he got three big calls right.

First, even without a majority in parliament, he has been ruthless. Whole government departments have been closed down overnight, regardless of the immediate consequences. The Ministry of Culture was axed, so was the anti-discrimination agency, and the state-owned news service. Only last month, he unveiled plans to fire another 70,000 state employees.


Milei hasn't attempted to cut gradually, to control budgets, or to ease people out with early retirement, or hiring freezes. Instead, he has, as promised, taken a 'chainsaw' to the machinery of the state, yielding huge savings in the process.


Next, he has been bold. The president massively devalued the peso on day one, taking the financial hit upfront, and then tore up rent controls, price restrictions and state subsidies. He pared back workers' rights, reducing maternity leave and severance compensation, and allowed companies to fire workers who went on strike.

If only we can do this; EPA, Dept. of Education are two that comes to mind immediate. PBS funding should be pulled as well.

Milei has been wildly effective in slashing inflation from over 300% to 11% in just few short months.

Milei controlling inflation



There's so much fat in our fed government they would probably have to have a $1B study to identify what to cut!
akm91
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Deposit the $1B in my account please, I already outlined 2 agencies to axe and PBS funding to get pulled.
Galt
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Definitely Not A Cop said:

Hungry Ojos said:

But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.


He laid them off too.


(I don't actually know if he did or not)



sam callahan
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Dude is going to eat a CIA bullet.
kag00
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Interesting. Slash and burn to reshape everything has got to be painful. What is the plan to grow the economy from here? Eliminating gvt bureaucracy and waste should spur growth but will it be enough fast enough to offset the short term pain of the cuts?
Fightin_Aggie
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News Flash!

Government stops the printing presses and life gets better

News at 11
rocky the dog
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rocky the dog
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rocky the dog
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Try it a third time...

Elections are when people find out what politicians stand for, and politicians find out what people will fall for.
Heineken-Ashi
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kag00 said:

Interesting. Slash and burn to reshape everything has got to be painful. What is the plan to grow the economy from here? Eliminating gvt bureaucracy and waste should spur growth but will it be enough fast enough to offset the short term pain of the cuts?
When you have gone through / are going through rapid hyperinflation (prices literally doubling in the blink of eye continually), the only solution is to sacrifice the short term to have ANY CHANCE at a long term.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
DTP02
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Ag87H2O said:


If Trump wins, he needs to follow this model. Don't listen to the complaints and whining. Just do it, fade the heat in the short term, and reap the long term benefits.

Reagan acted boldly early in his first term and made decisions that were universally lambasted by the Democrats and the media. It was painful at first, but by 1983, things started turning around dramatically for the better.

Conservatism works every time.


It would be nice. But Trump doesn't really have conservative fiscal views and hasn't shown the capacity to execute an ambitious gameplan. It would take someone who is not only principled but also skilled as an executive to accomplish.

The better hope with Trump is more some policy reversals (think Green new deal) and marginal cuts and at least stopping the increases.
dahouse
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I was making $135K per year last time I was laid off, worked out to about $2,550/week. Unemployment paid me $400/week. That's a big difference.
Cody
Fightin Texas Aggie c/o 04
akm91
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Inflation is now down to 11% from 300% seems to be a pretty damn big gain for the people of Argentina.
They've also already realized a budget surplus for the first time since 2008. Seems like there's some sizable gains being made based on his actions.
Hungry Ojos
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akm91 said:

Inflation is now down to 11% from 300% seems to be a pretty damn big gain for the people of Argentina.
They've also already realized a budget surplus for the first time since 2008. Seems like there's some sizable gains being made based on his actions.
So does this make example #485,352,259 that conservatism works and liberalism does not?
rocky the dog
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Quote:

So does this make example #485,352,259 that conservatism works and liberalism does not?
Elections are when people find out what politicians stand for, and politicians find out what people will fall for.
rgag12
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If you want to make any meaningful change, the remedies will have to be painful.

The US isn't going to solve its budget problems without the entire population swallowing some hard pills
gkaggie08
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You do realize that unemployment isn't equal to salary, right? Looking at our own government bloat, if you fired gov employees making $100k+ and moved them to unemployment that maxes out at $500/week(at least in Texas), you reduced cost by 75% at least. Do that 70000 times and you save a minimum of $500 billion
ABATTBQ87
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Hungry Ojos said:

But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.
make em all hourly employees, cut their hours in half, they lose all full-time benefits and they'll start leaving or quitting on their own

Problem solved
ABATTBQ11
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I've shared this before, but it is a good history on the Argentinian economy and why this may or may not be short lived:



Argentina has had wild swings of prosperity and hardship throughout its history, and what Milei is doing isn't entirely novel. It's just the latest iteration of trying to get Argentina back to a semblance of a self-sustaining and developed economy.
HumpitPuryear
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Definitely Not A Cop said:

Hungry Ojos said:

But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.


He laid them off too.


(I don't actually know if he did or not)

Yeah the genius move would be to lay off all of the staff associated with welfare payments first. So technically welfare is still a program but if no one is there to take applications or write checks…
BCG Disciple
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akm91 said:

The Ministry of Culture was axed


Oh no!
ABATTBQ11
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HumpitPuryear said:

Definitely Not A Cop said:

Hungry Ojos said:

But doesn't immediately firing 70,000 government employees simply mean that you are now going to have to pay those same 70,000 people unemployment and welfare?

So whether the government is giving them a salary, or whether the government is giving them unemployment/welfare? How does it equal huge savings?

Or maybe the flaw in my thinking is assuming that Argentina has welfare/unemployment programs to begin with.


He laid them off too.


(I don't actually know if he did or not)

Yeah the genius move would be to lay off all of the staff associated with welfare payments first. So technically welfare is still a program but if no one is there to take applications or write checks…


The problem with this entire line of thinking is the poverty and government employment levels of Argentina. Much of the economy has historically been propped up by government spending in welfare, government jobs, and projects. Cutting off that tap doesn't magically create the economic activity necessary to employ and support all of the people who then find themselves in even worse poverty. If Milei doesn't generate about 5-10 million decent paying, self-sustaining, private sector jobs in the next 2-3 years, this will probably be a failed experiment.
peacedude
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rocky the dog said:

Try it a third time...


Once
Twice
Three times a Milei
Heineken-Ashi
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ABATTBQ11 said:

I've shared this before, but it is a good history on the Argentinian economy and why this may or may not be short lived:



Argentina has had wild swings of prosperity and hardship throughout its history, and what Milei is doing isn't entirely novel. It's just the latest iteration of trying to get Argentina back to a semblance of a self-sustaining and developed economy.
Not entirely novel?

When in history has something made such drastic cuts and gotten results this quickly?
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
Hubert J. Farnsworth
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Heineken-Ashi said:

ABATTBQ11 said:

I've shared this before, but it is a good history on the Argentinian economy and why this may or may not be short lived:



Argentina has had wild swings of prosperity and hardship throughout its history, and what Milei is doing isn't entirely novel. It's just the latest iteration of trying to get Argentina back to a semblance of a self-sustaining and developed economy.
Not entirely novel?

When in history has something made such drastic cuts and gotten results this quickly?


I've never seen government actually shrink before. This is the first time as far as I know.
YouBet
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Ag87H2O said:


If Trump wins, he needs to follow this model. Don't listen to the complaints and whining. Just do it, fade the heat in the short term, and reap the long term benefits.

Reagan acted boldly early in his first term and made decisions that were universally lambasted by the Democrats and the media. It was painful at first, but by 1983, things started turning around dramatically for the better.

Conservatism works every time.
Trump has no authority to fire people at the agencies. It's a pipe dream.

The Deep State is ingrained and not going anywhere.
VitruvianAg
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sam callahan said:

Dude is going to eat a CIA bullet.


If the drug cartels he's coming down hard on don't get him first... he's using the Bukele model on them...
VitruvianAg
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kag00 said:

Interesting. Slash and burn to reshape everything has got to be painful. What is the plan to grow the economy from here? Eliminating gvt bureaucracy and waste should spur growth but will it be enough fast enough to offset the short term pain of the cuts?


Guy at my mechanics shop (I have a Jaguar, I'm his patron, really we're good friends for 30 years) is Argentine, just got back from visiting his parents in BA. He said things are doing much better, people still love the guy, majority have bought in, specially the non government leaches.

Rosario is a drug cartel problem.
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