Trump Admin Responds to Milei’s Failed Libertarian Policies With a US Taxpayer Bailout for Argentina
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank," said one economics writer, "but even that was not enough to stabilize Milei's crazy Austrian School experiment."
In his first meeting with a foreign head of state after being reelected president last year, Donald Trump welcomed Argentina's far-right libertarian President Javier Milei to Mar-a-Lago.
At a lavish gala, Argentina's president slathered his host with compliments, describing Trump's return to office as the "greatest political comeback in history."
Before a crowd of onlookers, Trump would return the favor, telling Milei, "The job you’ve done is incredible. Make Argentina Great Again, you know, MAGA. He’s a MAGA person.”
On Monday, less than a year later, Milei arrived in New York for this week's meeting of the United Nations General Assembly, begging for help as Argentina's economy continues its freefall and reels from nearly two years of his radical economic austerity program.
Milei's fealty to Trump bore fruit. US Treasury Secretary Scott Bessent promised that the nation's financial department "stands ready to do what is needed within its mandate to support Argentina."
In what he described as an effort to tame Argentina's runaway inflation, Milei, who has described himself as an "anarcho capitalist," has spent the time since he was elected president in 2023 instituting a brutal regime of what has been referred to as economic "shock therapy."
His agenda has centered on taking a "chainsaw" to government institutions and worker protections: slashing energy and transportation subsidies, halting public infrastructure projects, declaring war on labor unions, freezing wage and pension increases, and firing tens of thousands of government employees.
The result was predictable: By February 2025, the country had begun to rapidly deindustrialize, unemployment was soaring, and more than half of Argentinians lived in poverty.
However, this did not stop Trump from modeling his economic agenda, often explicitly, after Milei's—most notably through the exploits of the chainsaw-brandishing billionaire Elon Musk's Department of Government Efficiency (DOGE), which he used to lay waste to the administrative state. Trump, meanwhile, has signed legislation gutting social services like Medicaid and food assistance, busted public unions, and canceled numerous green energy and infrastructure contracts.
The result has likewise been a slump in economic activity, culminating in unemployment numbers critics say the administration has been desperate to bury.
The US president has already intervened once to help soften Argentina's landing. As El País notes:
Thanks to Trump’s political support, the government agreed to a $20 billion bailout with the International Monetary Fund last April—to which the country still owes another $40 billion—and achieved a measure of calm, but it lasted barely three months.
Now, with Milei facing mass street protests against his budget cut proposals, a hostile legislature that routinely vetoes his agenda, and a weakening peso in the face of continued uncertainty, he has turned to the US for another bailout, which the US hopes will help ease the country's economic woes enough to stave off a thrashing for his party in the country's general legislative elections on October 26.
Referring to Argentina as a "systemically important US ally in Latin America," Bessent said that "all options for stabilization are on the table." This, he said, "may include, but [is] not limited to, swap lines, direct currency purchases, and purchases of US dollar-denominated government debt from Treasury’s Exchange Stabilization Fund."
Notably, Bessent continued to praise Milei's "support for fiscal discipline and pro-growth reforms." Despite its catastrophic effects, he described Milei's chainsaw agenda as "necessary to break Argentina’s long history of decline."
US Sen. Elizabeth Warren (D-Mass.) denounced the bailout as another favor from Trump to one of his political allies.
"First, Trump made us pay higher coffee and beef prices to support a convicted coup-plotter in Brazil," she said, referring to Trump's attempt to use harsh tariffs to pressure the Brazilian government into dropping charges against Jair Bolsonaro, who was ultimately convicted last week of attempting to overthrow the government. "Now, he wants American taxpayers to bail out his friend Milei in Argentina."
(Video: The Geopolitical Economy Report)
But as Benjamin Norton of the Geopolitical Economy Report argues, the motivation goes deeper than simply helping out a friend. It is an effort to save the reputation of "actually existing libertarianism" and the fortunes of US investors who've cast their lot with him.
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank (after Argentina already owed more debt to the IMF than any other country), but even that was not enough to stabilize Milei's crazy Austrian School experiment," Norton said. "The US government is doing this not only to prop up one of its most loyal puppets in Latin America, but also in order to benefit wealthy US investors who hold Argentine stocks and bonds, and US corporations that want Argentina's lithium."
With Trump having modeled his oligarch-friendly economic agenda on Milei's, journalist Jacob Silverman—author of the forthcoming book Gilded Rage: Elon Musk and the Radicalization of Silicon Valley—argued that allowing the libertarian radical to twist in the wind is not an option for Trump.
"Javier Milei can't be allowed to fail," Silverman said, "because MAGA leaders and the tech right have propped him up as a true libertarian fighting the globalists and 'doing what needs to be done': Immiserating his people on behalf of private capital."
