President-elect Donald Trump and Argentine President Javier Millay at Mar-a-Lago, November 14, 2024
Provided by the Argentine Presidential Office
Argentine President Javier Millay, a self-described anarcho-capitalist, became the first foreign leader to visit President-elect Donald Trump since he won a second term, arriving in Florida on Thursday to meet President Trump. Attended a gala dinner at the Mar-a-Lago resort. It was VIP speaker.
Now that Trump is elected, “the world is a much better place and the winds of freedom are blowing much stronger,” Milley said.
He praised President Trump’s victory on November 5th, calling it “the greatest political comeback in history, in which Trump risked his life to defy the political establishment.”
Millay also confirmed the name of another attendee in the gala crowd. tesla And SpaceX CEO Elon Musk.
“I would like to thank the great Elon Musk for his amazing work to save humanity,” Millay said through an interpreter.
Mr. Milay’s presence in Florida on Thursday and his kind words for Mr. Trump and Mr. Musk came as the two American billionaires and the leader vowed to rescue Argentina’s long-struggling economy through “shock therapy.” It provides a glimpse into the important power relationships that are evolving between the two countries. —Significant spending cuts and regulatory cuts.
Musk and Miley are already big fans of each other. The two have met several times, and Millay even visited Tesla’s factory and posted a photo of them together.
A photo Milley posted in September shows Mask wearing a “dark MAGA” hat with the Trump campaign logo in black on black.
Photos from Thursday’s celebration posted on social media showed Musk, Miley and Trump all smiling.
Mr. Musk spent last week at Mar-a-Lago, serving as one of Mr. Trump’s closest advisers as the president-elect assembles unexpected people in his Cabinet — some of whom are themselves Selected by a leader who promises to bring unique shock therapy to the federal agencies he appoints.
Trump also announced that Musk and entrepreneur Vivek Ramaswami will lead the Office of Government Efficiency, which will be dedicated to making deep cuts to the federal budget.
The announcement fulfilled Trump’s campaign promise to give Musk a key role advising his administration. government spending. Despite its name, DOGE is not a federal agency; instead, it functions as an external advisory board to the White House Office of Management and Budget.
Still, Musk claims he can cut $2 trillion of the roughly $6.75 trillion U.S. budget. The only place where cuts of this magnitude have been implemented in recent years was Argentina under Millais.
“All government spending is either inflation or direct taxation. The Department of Government Efficiency is going to solve that,” Musk said at President Trump’s Madison Square Garden rally last month.
To understand the origins of Mr. Musk’s idea to cut the federal budget by a third, consider what Mr. Milley accomplished.
Since taking office last December, Mr. Milley has cut back on Argentina’s policies. Federal spending increases by 32%According to the Argentine Center for Political Economy (CEPA).
In October, Argentina’s inflation rate reached 2.7%, its lowest level since 2017, in a country where annual inflation rates exceed 300% and destabilize the country.
Much of Milley’s agenda comes down to cutting federal spending. And, Millay said, Musk consulted Argentina’s leadership to find out how.
“The United States is aware of our example and is following our example,” Milay said at the META Day Argentina conference in Buenos Aires on Tuesday. “This is what Mr. Musk is saying” [Minister of Deregulation] Federico Sturzenegger talks about how to deregulate the US economy. ”
In Argentina, Prime Minister Millais reduced the number of ministries by 13, leaving only nine. More than 30,000 public sector employees were laid off. He canceled all infrastructure projects.
The deep cuts had equally dramatic consequences, plunging Argentina’s economy into a deep recession. Argentina’s GDP decreased by more than 5% in the first quarter of 2024.
However, the World Bank predicts that the worst is over, with overall negative growth expected to be around 3.5% by the end of the year. The bank also predicts that Argentina’s GDP will grow by 5% in 2025.
Certainly, cuts of this magnitude would be much more difficult to implement in the United States than in Argentina. First, Argentina’s national budget is much smaller than the United States at about $101 billion, and smaller than New York City’s budget.
But unlike Milay, it is not clear whether U.S. voters have given President Trump the mandate to cut spending as Argentina’s voters have given the president.
Reducing the federal budget was Milley’s first campaign promise. He frequently carried a chainsaw on the campaign trail as a symbol of his determination to eliminate bloated government spending.
Milley won last year’s election by a 10-point margin, suggesting a significant majority of voters support his plan.
Mr. Trump, on the other hand, called for securing the border and improving the economy, primarily through tax cuts and tariffs. Fiscal restraint had no noticeable effect on President Trump’s campaign platform.
This reality has not been ignored by the market.
Since President Trump’s election, long-term interest rates in the United States have risen markedly, suggesting that so-called “bond vigilantes” may be making a comeback.
The term “bond vigilante”, coined by Ed Yardeni of Yardeni Research in 1983, refers to the fact that if fiscal and monetary authorities do not control spending, the bond market will be regulated by imposing much higher borrowing costs. It refers to the idea of doing.
