When Argentina’s anarcho-capitalist, chainsaw-wielding President Javier Milei took office in late 2023, much of the mainstream commentary, and even many economists, predicted chaos. A hard-line libertarian, well-schooled in Austrian economics, pledged to slash spending, devalue the currency, and dismantle large swaths of the Argentinian state. Even free market economists were skeptical that the student of Mises and Hayek would be able to beat back decades of decline under Peronist rule, or that Argentine voters would tolerate Milei’s “shock therapy.”
Milei inherited one of the biggest fiscal crises anywhere in the developed world. In late 2023, monthly inflation hit 25.5% with annual inflation surging above 200%. The peso was collapsing and the government was running massive deficits financed by money printing, further feeding a generational cycle of hyperinflation. Austerity was necessary, and Milei did not fail to deliver.
The Argentine president immediately halted over 2,000 public works projects, ended many energy and transportation subsidies, and slashed the federal workforce. Argentina’s temporary or freelance state workforce was cut by over 55%; 5,000 new contracts were canceled; and as of last month, 63,000 permanent government jobs have been eliminated. Milei shuttered the nation’s state-run news agency and reduced the number of Cabinet ministries from 18 to nine. Price-control agreements on consumer goods, property rentals, and medicines were promptly eliminated.
President Donald Trump made the United States’s commitment of $20 million in currency swaps and an additional $20 billion in private sector investment contingent on Milei’s reelection late last year, and Trump’s faith in Milei paid off. Despite polling data to the contrary, Argentine voters held fast in their support of their president and dramatically increased the La Libertad Avanza party’s share of both houses of the legislature.
Like chemotherapy, Milei’s “chainsaw austerity” caused some short-term pain. Inflation spiked initially as wages decreased. Milei devalued the peso by 50% to bring the currency closer to market realities after years of artificial centralized controls. The results, nearly 2 1/2 years after his inauguration, have been encouraging.
Monthly inflation has sunk to the low single digits, and annual inflation, while still high, sits at 31%, the lowest level in eight years. This kind of disinflation over such a short period is nearly unheard of, especially without artificial suppression or price controls. GDP growth in 2025 was a respectable 4.4%, up from an estimated -1.6%, or worse, in 2023. Despite entering a recession in 2024, the Argentine government posted its first surplus in over a decade. The nation survived Milei’s much-needed shock therapy. Argentina is not out of the woods, at least not yet, but the economy has stabilized, and the president is showing no signs of slowing down.
Stabilization is not the same as transformation. Time will tell whether the Argentine people allow Milei and the free-marketers to continue correcting decades of communist policy. Milei has proven that no-nonsense free-market economics can save a country. It is now up to Argentinians to build an economy that leads to long-term growth and prosperity.
Judging by the Trump administration’s actions in Venezuela and the apparent impending collapse of one of the world’s last true communist strongholds in Cuba, the president and Secretary of State Marco Rubio clearly have a vision of a Pax Americana in the Western Hemisphere. A free, prosperous, and strong Argentina, once one of the wealthiest nations in the world, would be an important counterweight to the leftist holdout nations in Central and South America.
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Under Milei’s leadership, Argentina has rejected BRICS membership and distanced itself from China and its leftist neighbors in Venezuela and Nicaragua. Milei has gone out of his way, both symbolically and politically, to align closely with the U.S. and its allies, including Israel, and supports U.S. foreign policy goals. Milei and the Argentine government is betting on the American horse, and the U.S. government should continue to bet on Milei and the future of Argentina.
Brady Leonard (@bradyleonard) is a writer, musician, and host of The No Gimmicks Podcast.
