Editors of National Review Online assess a South American economic success story.
“Instead of talking about growth at Chinese rates, the world will soon be talking about growth at Argentine rates,” President Javier Milei of Argentina said in April. And here we are in July doing just that.
Argentina’s economy is growing at 7.7 percent, according to the latest year-over-year data. It grew by 1.9 percent in April, the most recent month for which data are available. The Chinese economy is growing at a rate of about 5 percent per year (if you believe the official statistics, which there are good reasons to doubt).
Argentina is achieving this growth not through a strategic industrial policy or a mercantilist trade policy. It’s achieving it by rolling back the overextended public sector, slashing the government budget, controlling the money supply, and removing price controls.
Milei eliminated rent controls in Buenos Aires, and the apartment market was flooded with new properties and the average real price went down. He turned a budget deficit into a surplus in his first full year in office. He eliminated half of the country’s cabinet departments.
When Milei took office in December 2023, inflation was 25 percent per month. In May, it was 1.5 percent. The initial shock of the policy change led to a spike in the poverty rate, but it has been falling since the second half of last year and is now lower than when Milei became president.
As is routine whenever a leader proposes shrinking government, “Over 100 Economists” signed a letter in 2023 saying that Milei’s policy proposals were “fraught with risks that make them potentially very harmful for the Argentine economy and the Argentine people.” When the Argentine people were subject to decades of statism that turned them from one of the world’s richest countries into an economic disaster zone, “Over 100 Economists” were silent. It was only when Milei, an economist himself, proposed to do something about it that “Over 100 Economists” found their voice.
The post Argentina’s ‘miracle’ vindicates free markets first appeared on John Locke Foundation.
Click this link for the original source of this article.
Author: Mitch Kokai
This content is courtesy of, and owned and copyrighted by, https://www.johnlocke.org and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.
