You may find it instructional to watch what is happening in Argentina as its newly elected president, Javier Milei, takes some steps to bring the country back to a sound monetary basis, cut rampant inflation, and rebuild its economy. Only two months in, it is already a difficult journey filled with pain, and it will take two years to know if his actions have succeeded. We do know, however, that things will get worse in the short-term before they get better in the long run. This is what it takes to unwind the damage socialists have done to the country and its financial systems.
This kind of economic disruption is what we have to look forward to if we hope to return to the U.S. to a sound financial footing. Similar steps must be taken, with similar results. Hopefully, a turnaround here could be easier because we are not as far down the path as Argentina, however, we are a much larger economy. And then there are our politicians. Because we lack the political willpower to make tough decisions, a change is unlikely. Without change, things will continue to get worse, one government program at a time.
Milei calls himself an anarcho-capitalist and a free-market proponent. The U.S. is supposedly a free-market economy, but in reality we left that behind. Today, our so-called free market is regulated by Congress, the administration, and the courts. Every time you hear the word “subsidy” or someone says “tax incentive,” they are interfering with the free market. Every time a regulation bans something, taxes a behavior, or prohibits an action, the free market is less free. Milei seeks to undo that, and he is finding momentum is pushing back against his actions.
Our Last Free-Market President
The closest the U.S. has come to having an anarcho-capitalist behind the Resolute Desk in the Oval Office was Ronald Reagan, who was in favor of balancing the federal budget, cutting federal spending, and reducing regulations. He also simplified the tax code, reducing the number of deductions and the number of tax brackets.
Trump tried many of the same approaches, reducing taxes and requiring that they removed two regulations from the books for everyone that was added, but with less success. He may have slowed the rise of socialism in the U.S., but he could not overcome its momentum.
A Tough Slog Ahead
When you take away government-funded programs, when prices rise after subsidies disappear, or when government stops giving people goodies they are used to getting, the public gets upset. That’s what’s happening in Argentina right now. That is why our politicians don’t have the balls to cut back on freebies, subsidies, and so-called entitlement programs—because people feel entitled to them and will vote said politicians out of office. Worse yet, they may grab their pitchforks and torches (or bricks and fireworks) and march on the capital. Or camp outside their homes and threaten the politician’s families.
The kind of massive change we need to steady our slow slide downhill and rebuild our economy will not come easy. Just as you need to prepare for an economic collapse, you need to prepare for an intentional man-made economic turnaround that upsets our current economy and causes significant economic pain.
Wil it Work?
Will Milei succeed? Will politicians follow him, or will the citizens remove him from office? When we look back in 2026, will inflation have been tamed, their currency stable, their foreign reserves rebuilt, their spending under control? Or will Argentina be mired in an even worse financial situation? Only time will tell.
Even if Milei is successful and Argentina regains its former economic strength, do not expect our politicians to learn from it. We will have to force these changes down our politician’s throats; they won’t take this kind of leap on their own.
So keep your eye on Argentina. Observe their successes and failures. Think what would work here, and consider what you must do to survive the first few years of such a transition, because it will be a long, ugly slog.