Not long after socialist activists flooded into Buenos Aires to protest President Javier Milei's sweeping budget cuts and reforms, it has been announced that Argentina is enjoying its first monthly budget surplus since August 2012. The budget fix (and $589 million positive balance) took Milei only one month in office to achieve and leaves the political left with some embarrassing questions to answer.
Milei is considered a "far right" libertarian, but his extensive economic background has so far made him perfectly placed to begin repairs to Argentina's long suffering fiscal system.
A balanced budget is the first step towards removing the country's economy from under the thumb of the International Monetary Fund and the organization's $44 billion loan. Though Argentina has a long way to go to solvency, the socialist policies of previous administrations only served to trap the population in a prison of persistent debt. This has led to a series of stagflationary crisis events and a greatly devalued peso. The economy is currently suffering from a 250% inflation rate.
Pro-establishment critics have asserted for months that Milei would "destroy" Argentina's financial framework, but frankly, that happened long before he entered office. As we have seen in many western nations the past decade, kicking the can down the road only leads to increasingly more volatile economic consequences.
Once a country is addicted to socialist subsidies over the course of decades, convincing the populace that the government handouts they have grown to rely on are a form of bondage becomes very difficult. Milei's methodology of tearing off the band aid and setting wholesale fire to socialized programs may be the only way to force the public to stop being dependent. At the very least, it's the only solution that hasn't been tried, which is often a good sign that it will work.
