An update on Argentina's recovery
In the words of an actual Argentine.
Photo: Reuters
Greetings Prosperous Souls,
Cory and I have been following Argentina closely. We’re fascinated by the question: can Argentina free itself from the bondage its own government has created?
Keep in mind, Argentina used to be a thriving country. Sowell writes in his book, Wealth, Poverty and Politics:
In the early twentieth century, Argentina was one of the world’s most prosperous nations—ranking above France and Germany... But, by the middle of the twentieth century, disastrous political policies had dropped Argentina out of the front ranks of nations economically.
What was the cause? Sowell writes:
Messianic political demagoguery and class warfare rhetoric and policies…
In other words, empty political slogans and corrupt big government. Sowell continues:
As of 2015, The Economist magazine reported that Argentina’s economy had “barely grown for four years,” was running a budget deficit and had an inflation rate of about 25 percent per year.
It’s a true horror story that shows how great nations can fall when governed by poor leaders.
Libertarian firebrand and president, Javier Milei, has vowed to bring Argentina back. But can he do it?
He not only faces resistance within his own government, but he also endures an uphill battle in transitioning from socialist policies to free market thinking.
Can the people outlast this adjustment? Or will they return to big government policies that brought them here in the first place?
I could speculate all day, but I wanted an Argentine’s perspective. Fortunately, I know a few people there. Here’s a snippet from a recent email conversation I had with a pastor in Argentina:
Stephen’s message:
Hola Amigo
Can you listen to this podcast and share your thoughts with me?
It’s very short listen. My son and I are admirers of Milei. We are praying for Argentina.
God bless,
S
Here’s his reply:
Hello libertarian friend!! (hahaha) What a surprise to receive your message. I also really like Milei.
I listened to the podcast and I have some observations to share with you.
What Milei has achieved in 6 months in our country is incredible! Historic!
He has reduced inflation from 25% monthly to 8.8% monthly and it keeps decreasing.
It’s true that economic activity has slowed down, but that’s because the government stopped spending more than it had and stopped printing money (pesos) to cover debt. This is what was causing unbearable inflation.
Regarding the Argentine Peso, it’s true that it has little value, but in the last month, it was the second most valued currency in the world.
Regarding dollarizing the economy, Milei said it would be an option in his government, but he would let the market choose the currency. What he did promise, and hasn’t been able to fulfill yet (we have to understand that it’s only been 6 months in government), is to close the Central Bank so that no one can print bills anymore. He will do this in a later stage. Also, it’s important to consider that it benefits the USA for countries to adopt the dollar as their currency, as it helps them contain their own inflation caused by excessive money printing (I understand that Forbes might have interests behind these statements).
It’s true that in Argentina there’s a 55% poverty rate, and this is the result of 20 years of socialism, not Milei’s policies. But at the same time, Milei is assisting people in poverty better than the socialists, as he does it directly (without intermediaries taking people’s money).
Milei has accomplished a lot in these months and is uncovering a lot of corruption. In just one month, he was able to reduce a deficit of 13 points of the GDP by eliminating unsustainable public spending.
Of course, we need to pray for him because Argentina doesn’t have any more chances than this. We need to pray for God to guide him, to confuse his enemies, and for those who need to go to jail to go. We need to pray that no attempt to harm him succeeds.
There you have it: the words of an actual Argentine, living on the ground, dealing with economic results in real time.
Let’s partner with his request and pray for this nation: that corrupt bureaucrats would be exposed, that Argentines would rise from poverty, and that disastrous economic policies would be reversed.
Praying for Argentina,
Stephen K. De Silva
About: Stephen K. De Silva is an author, speaker, and financial coach. From 1995 until 2017, he served as the CFO of Bethel Church, and a member of the senior leadership team. Stephen’s blend of experience, training, and gifting make him a pioneer in the subject of money. You can reach Stephen at hello@prosperoussoul.com