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Economy
'So Much for America First': Trump Admin Says Argentina Bailout Doubling to $40 Billion
The bailout is aimed at boosting Argentina's flagging peso, which has fallen by nearly one-quarter against the US dollar this year. A decade ago, $1 was equal to 18 pesos. Today, a single dollar will buy 1,361 pesos. That's a loss of more than 99% in value over the past 10 years.
The Argentine peso has lost more than 99% of its value against the US dollar over the past decade. (Image by xe)
Although poverty in Argentina has fallen significantly from over 50% shortly after Milei's election, around 30% of Argentinians remain poor and prices and inflation are again rising significantly. While Milei has drastically slashed inflation, the reduction has come via the devaluation of the peso and massive cuts in government spending, including the evisceration of social programs resulting in more expensive housing, healthcare, and education.
Bessent's announcement comes ahead of Argentina's October 26 midterm elections that will test the mandate for Milei—an admirer and close ally of President Donald Trump—to continue with his slash-and-burn approach to streamlining government.
While meeting with Milei at the White House Tuesday, Trump said the bailout is contingent upon the Argentine president remaining in power.
“If he loses, we are not going to be generous with Argentina,” Trump told reporters. “I think he’s going to win, and if he wins, we’re staying with him, and if he doesn’t win, we’re gone.”
The combination of fiscal austerity, gutting of government agencies, dangerous deregulation, inflation, and currency devaluation have caused Milei's unfavorability rating to soar to over 60% in some polls, it's highest level ever.
Milei—a self-described anarcho-capitalist who was elected in November 2023 on a wave of populist revulsion at the status quo—campaigned on a platform of repairing the moribund economy, tackling inflation, reducing poverty, and dismantling the state. He made wild promises including dollarizing Argentina’s economy and abolishing the central bank.
However, the realities of leading South America’s second-largest economy have forced Milei’s administration to abandon or significantly curtail key agenda items, leading to accusations of neoliberalism and betrayal from the right, and hypocrisy and rank incompetence from the left.
“Let’s not get confused: Milei went to beg for money and a photo of Trump because his economic plan failed," Argentine lawmaker Emilio Monzó said Tuesday.
Another lawmaker, Margarita Stolbizer, said on social media Tuesday that "freedom is crawling."
"Trump tells us Argentines that if we don't vote for Milei, we'll be punished," she added. "The interference is absolute, the libertarian surrender is total. Let's have confidence in the pride of our people: We are millions who don't want to be told what we have to do."
US singer and political commentator Blakeley Bartley skewered Milei, "the based anarcho-capitalist conservative," in a social media post on Wednesday."
"He was gonna get in power, cut government spending," Bartley continued. "Remember, all your favorite right-wingers and American media said, 'You gotta support him, man, he's a based conservative that's gonna save Argentina."
"What's that?" Bartley added. "Oh, that's right, he drove the economy into the fucking ground and now he needs a welfare check from Daddy America."
Others—ranging from progressives angry over tens of billions of dollars being spent on foreign bailouts while so many people are struggling and suffering in the US to hardcore MAGA supporters—are asking, how is bailing out Argentina "America First?"
"Trump wants to DOUBLE Argentina's bailout to $40 billion to save his political ally," Sen. Bernie Sanders (I-Vt.) said on social media. "Yet he is doing nothing to prevent 15 million Americans from losing their healthcare and 20 million from seeing a doubling in their premiums. Is this what Trump means by America first?"
Sen. Elizabeth Warren (D-Mass.) said: "Apparently $20 billion of our taxpayer money wasn't enough to bail out Argentina. Now Trump wants US banks to divert ANOTHER $20 billion away from lending to American businesses, farmers, and families to prop up Milei's corrupt presidency and failing economy."
Former US Labor Secretary Robert Reich said, "So much for 'America First.'"
John Bartam, a soybean farmer from Illinois, slammed the bailout in a Tuesday interview with the Daily Beast, noting that Trump’s $20 billion lifeline enabled Milei to lower his country's export tax, leading to China buying seven million tons of Argentinian soybeans at the expense of the US. This, as American soybean farmers reel from Trump's tariff war with China, which until recently was the world's leading buyer of the top US export crop.
“MAGA," Bartam said, "now means Make Argentina Great Again."
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