“Out with all of them,” Argentine President Javier Milei exclaimed in another one of his tirades against the political elite in Argentina—a message indicating the drastic change he sought to bring [1]. Elected in 2023, President Javier Milei has worked to fix the economy with his radical “anarcho-capitalist” reforms. His fiscal policies have faced notable backlash due to their radical approach and apparent disregard for economic growth. Nonetheless, his plans remain the best path forward for the South American nation.

Argentina has an arduous history of economic management. The Argentine government has often overspent over the past century, resulting in repeated economic downturns [2]. The overspending cycle always began when the central government requested loans from the International Monetary Fund (IMF) and then made central fiscal reforms, which were succeeded by provinces overspending and breaking the economic plan [3]. Poor financial decisions meant that Argentina soon found itself in a similar situation of needing an IMF loan, thus restarting the process [4]. Recurring economic blunders have caused Argentina to default on its debt nine times, earning it a junk bond rating [5]. Argentina had accumulated the largest amount of IMF debt as of 2024, owing nearly three times more money than the second-greatest debtor [6].

In response to this economic crisis, Javier Milei burst onto the Argentine political scene, seeking to cut government spending and get Argentina out of debt. As an outsider and staunch libertarian, he immediately gained political enemies [7]. He positioned himself as the solution to the economic problems that have historically plagued the nation. Milei ran for and won the Argentine presidency in 2023. He advocated for a shock treatment to the economy, changing it rapidly in order to ameliorate past mistakes [8]. Milei identifies as an “anarcho-capitalist,” which involves cutting fifteen percent of public spending [9]. All of this, Milei claims, is in an effort to balance the books and get Argentina back on the right economic track [10]. 

Milei has stayed true to his “anarcho-capitalist” words on the campaign trail since taking office in late 2023. His first year in office has seen multiple economic successes as a result of his libertarian policies. Milei established the Ministry of Deregulation and State Transformation to streamline the Argentine government and decrease costs early into his first year [11]. Soon after, he passed the Bill of Economic Adjustments, which reduced federal government expenditures by thirty percent in 2024 [12]. Other initial reforms consisted of repealing restrictions on foreign ownership of rural land, deregulation of domestic trade, and increasing freedom of contracts [13]. Milei took immediate action to set the tone for his administration: he would be true to his libertarian claims. Legal changes included privatizing formerly government-owned companies and declaring a public emergency in administrative, economic, financial, and energy matters for one year [14]. The former change has worked to decrease government expenditures, while the latter has given Milei law-making authority normally reserved for the legislature [15]. 

Though divisive, Milei’s shocks to the Argentine economy are functioning as intended. The government ran a budget surplus for nearly every month in 2024, highlighted by a streak of six months from January through June [16]. The Argentine government has not recorded such a surplus since 2008 [17]. Monthly inflation dropped from 25.5 percent when he took office to just 2.7 percent in October 2024 [18]. The nation’s debt to Gross Domestic Product (GDP) ratio has also greatly improved—it was 156 percent in 2023, dropped to seventy-seven percent in 2024, and is projected to be just fifty percent in 2026 [19]. 

The global economic community has taken note of Milei’s reforms. The IMF has publicly praised the enacted austerity measures [20]. However, the organization has not yet committed to extending any loans to the nation in the future [21]. Additionally, the credit agency Moody’s increased Argentina’s credit rating from Ca to Caa3 [22]. Though Argentina continues to have among the lowest credit ratings of any nation, it is a notable improvement from previous downward trajectories [23]. While international signs of recognition have caveats, they are nonetheless vital indicators that the global community believes in Argentina’s austerity measures. External support will be critical for Milei as he will likely face backlash for his plans if the Argentine public continues to feel the negative aspects of austerity. 

In the past year, the strength of the Argentine peso has increased despite government attempts to devalue the currency [24]. There has long been a gap between the listed and street exchange rates between the Argentine peso and the U.S. dollar. The Milei administration sought to diminish and eventually dispel this gap by devaluing the peso [25]. They began by immediately devaluing the peso fifty-four percent in December 2023, after which they instated a crawling devaluation of two percent per month [26]. These efforts have been successful in bringing the exchange rate gap from 150 percent to between ten and twenty percent [27]. The gap has once again widened within this range as inflation outpaces the devaluation [28]. 

Many Argentines find that necessities have become unaffordable as a result of Milei’s changes to the peso value [29]. Food, rent, and energy prices, in particular, have all risen rapidly [30]. Chileans used to enter Argentina to buy essentials for lower prices; that flow of commerce has now reversed [31]. Poverty is increasing as the nation sees a two-decade-high poverty rate of 52.9 percent [32]. Argentina’s real economic situation is still in decline [33]. The GDP decreased by about four percent in 2024, and the nation faces a worsening recession due to the sudden change in pricing compared to the dollar [34, 35]. There was an approximately ten percent reduction in economic activity in Milei’s first year in office as well as a loss of approximately 100,000 jobs [36]. 

The Argentine public remains confident in Milei’s long-term plan for the nation despite the short-term negative impacts of austerity measures. Economic confidence is increasing: forty-one percent of Argentine adults are optimistic about economic improvement in 2024, an increase from twenty-three percent in 2023 [37]. Additionally, fifty-three percent of Argentines now say that the standard of living is getting better, the first time over half the population has said so since 2015 [38]. Notably, the government is the source of the people’s confidence in the future of the nation, not just the economy. During Milei’s first year in office, Argentine confidence in their government rose from twenty-four percent to forty-three percent, displaying the trust the Argentine people have in Milei’s plans for the nation [39]. 

Milei has faced many criticisms for both his various controversies and economic plans [40]. His controversies include tirades against socialism, accusations of cryptocurrency rug-pulls, and threats to leave the World Health Organization, which all leave a bad impression on many observers [41, 42, 43]. Economic critics claim that Milei does not focus enough on growth [44]. These arguments are valid, but they do not refute the fact that Milei’s plans are working as intended. He aimed to stabilize the economy and that is what he is doing. Milei’s approval ratings remain around fifty percent, an indication that many in the nation are unconcerned by his outbursts and present lack of economic growth [45].

Milei’s austerity measures raise an important question about the morality of political and economic solutions. Even though the people affected by such measures approve of them, is it right to make them bear the brunt of the costs for decisions that were not their own? Austerity measures place large burdens on many of the poorest people in Argentina by making many daily necessities unaffordable [46]. The costs of austerity are placed on the people who are often the farthest away from the decision-making process. In this case, the most important point to remember is that the people still approve of Milei’s actions. His plans are working as advertised. Milei never attempted to hide the difficulties of his plans, and those who voted for him were aware they would likely face the consequences of austerity measures. Argentines are aware of the challenges their nation has grappled with and continues to face. Many view Milei as the change necessary to break their nation’s downward trend of the past hundred years. 

Though it marks a dramatic change compared to Argentina's recent history, Milei’s reform style is not unprecedented in Latin America. His free-market reforms harken back to those implemented by the “Chicago Boys” in Chile during the 1980s. The Chicago Boys were a group of Chilean economists primarily trained at the University of Chicago who implemented many free-market reforms under the Pinochet regime [47]. Chile’s history since the Chicago Boys can be used as an indicator of Argentina’s future due to the similarities between the free market reforms of Milei and the Chicago Boys. 

The Chicago Boys’ policies laid the groundwork for Chile to advance beyond other Latin American countries in per capita income, poverty rate, and other human development indices [48]. However, the nation continues to suffer from extreme inequality, meaning that these economic advances have not been equally spread across the population [49]. Continued inequality causes concerns about the probable results of Milei’s reforms. Is Milei successful if he recreates Chile’s situation? Despite widespread inequality, the Chilean economy is still an improvement compared to that of Argentina. Milei’s reforms have the potential to materially stabilize the ever-fluctuating Argentine economy, thus giving it a chance to grow and bring widespread prosperity.

Milei’s harsh speech and distinctive appearance make him an unforgettable and often controversial figure. However, the efficacy of his economic rehabilitation plan is undeniable. Inflation is decreasing, and Argentina can finally work towards paying back its international debts. What’s more, the population wants these changes and is prepared for the strains that come with austerity. Milei is the leader Argentina needs to fix its economy and work toward a prosperous future.