President-elect Donald Trump and Argentinian President Javier Mire at Mar-a-Lago on November 14, 2024
Courtesy of the Presidential Palace of Argentina
Self-proclaimed anarcho-capitalist president Javier Miley Argentina’s president becomes first foreign leader to visit president-elect Donald Trump Milley arrived in Florida on Thursday for a dinner at Trump’s Mar-a-Lago resort, where Milley has been since winning a second term. VIP Speaker.
Milley said that after Trump was elected, “the world has become a better place and the wind of freedom is blowing stronger.”
he called Trump wins on November 5“, “The greatest political comeback in history, even risking his life to challenge the political system.
Milei also checked the name of another attendee in the party crowd: Tesla and SpaceX CEO Musk.
“I want to thank the great Elon Musk for the great work he’s doing to save humanity,” Milai said through a translator.
Milley’s appearance in Florida on Thursday and his glowing words for Trump and Musk provided a glimpse into two U.S. billionaires and a man promising to rescue Argentina’s long-troubled economy through “shock therapy” important changing dynamics among leaders.
Musk and Mire are already big fans of each other. They met several times, and Mire visited the Tesla factory and posted photos of the two together.
A photo Milley posted in September showed Musk wearing a “dark MAGA” hat, Trump’s campaign symbol, with black lettering on a black background.
Photos from Thursday night’s party posted on social media showed Musk, Milley and Trump smiling together.
Musk spent time at Mar-a-Lago last week, serving as one of Trump’s closest advisers as the president-elect fills his cabinet with unexpected picks — several of whom have pledged to own shock therapy into the federal agencies they are responsible for.
Trump also announced that Musk and entrepreneur Vivek Ramaswamy would lead a “Government Efficiency Department” dedicated to deep cuts in the federal budget.
The announcement fulfills Trump’s campaign promise to give Musk a major role in advising the administration. government spending. Despite the name, DOGE will not be a federal agency but will serve as an outside advisory group to the White House Office of Management and Budget.
Still, Musk claims he can cut $2 trillion from the roughly $6.75 trillion U.S. budget. The only country to implement such massive cuts in recent years was Argentina under Milais.
“All government spending, either becomes inflation or it becomes direct taxation. The Department of Government Efficiency is going to fix that,” Musk said at a Trump rally at Madison Square Garden last month.
To understand the genesis of Musk’s idea to cut the federal budget by one-third, consider what Milei has accomplished.
Since taking office in December, Mire has cut Argentina’s Federal spending reduced by 32%according to data from the Argentine Center for Political Economy (CEPA).
In a country with an annual inflation rate of 300% and leading to national instability, in October this year, Argentina’s inflation rate hit its lowest level since 2017: 2.7%
Much of Milley’s agenda boils down to eliminating federal spending. According to Milley, Musk has sought a solution from Argentina’s leadership.
“The United States has taken notice and is following our example,” Milley told the META Day Argentina conference in Buenos Aires on Tuesday. “Musk is working with (Deregulation Minister) Federico Stessin to discuss how to deregulate the U.S. economy.”
In Argentina, Mire reduced the number of ministries by 13, leaving only nine. More than 30,000 public sector workers were laid off. He halted all infrastructure projects.
Deep cuts had equally severe consequences, plunging Argentina’s economy into a deep recession. Argentina’s GDP fell by more than 5% in the first quarter of 2024.
However, the World Bank estimates that the worst is over and the overall contraction will be around 3.5% by the end of this year. The bank also predicts that Argentina’s GDP will grow by 5% in 2025.
To be sure, cuts of this magnitude may be harder to implement in the United States than in Argentina. First, Argentina’s national budget is much smaller than that of the United States, at about $101 billion, and smaller than New York City’s budget.
But unlike Milley, it’s unclear whether U.S. voters have authorized Trump to cut spending, just as Argentinian voters have authorized the president.
Reducing the federal budget was Milley’s top campaign promise. On the campaign trail, he often carried a chainsaw to symbolize his determination to eliminate bloated government spending.
Milley won last year’s election by 10 percentage points, suggesting a clear majority of voters supported his plan.
Trump, meanwhile, campaigned on securing the border and improving the economy, mostly through tax cuts and tariffs. Fiscal austerity did not figure prominently in Trump’s campaign platform.
This reality is not lost on the market.
Long-term U.S. interest rates have risen significantly since Trump’s election, suggesting that so-called “bond vigilantes” may be making a comeback.
The term “bond vigilantes,” coined in 1983 by Ed Yardney of Yardney Research, refers to the tendency of bond markets to impose higher borrowing costs if fiscal and monetary authorities do not rein in spending. to control spending.
