By: Orlando Calzado, 2L
In his speech at Davos 2025, Javier Milei reaffirmed his commitment to create a “free market economy” and reduce regulatory intervention. As the president of Argentina, Milei has literally taken a chainsaw to government spending, aggressively cutting regulations in an effort to address Argentina’s economic crisis. Donald Trump, echoing similar rhetoric, is now pursuing the same goal. Argentina thus serves as a case study, potentially foreshadowing a second Trump administration and its focus on reducing the size of government.
Milei criticized the political class for acting as both “referee and stakeholder in redistribution,” arguing that excessive regulations only disrupt markets and slow economic growth. Like Trump, he calls for a “new golden era” of small government. The key questions remain: what are the real outcomes of this worldview, and what effects do these policies have on Argentines or Americans alike?
The Effects of Milei’s Economic Policies
A self-proclaimed “anarcho-capitalist,” Milei holds numerous accolades in economics, yet his theories are still considered radical. Since his inauguration on December 10, 2023, Argentina has accumulated a year’s worth of data reflecting on the impacts of his policies. To kickstart his reforms, shortly after taking office, the government declared a public emergency through a Decree of Necessity and Urgency, focusing on administrative, economic, financial, and energy sector reforms.
A year later, month-over-month inflation has fallen from 25.5 percent in December 2023 to 2.7 percent in October 2024, its lowest in three years. Annual inflation peaked at nearly 300 percent by mid-2024 but dropped to 118 percent by December, marking a significant drop for its record highs. Foreign investments in the lithium, copper, gold, silver, and oil industries have remained strong. However, while these indicators suggest economic progress, recovery has come at a cost. The government cut funding for public projects, universities, the culture ministry, state-funded news agencies, public works, and scientific research. Poverty initially rose with inflation but has similarly since declined—though it remains a huge issue for many Argentines. Milei’s policies continue to spark major protests in the country due to the high rates of poverty.
The Trump Administration and the United States
Milei and Trump align in significant ways, with Milei often siding with Trump’s international policies. The Trump administration shares a similar agenda—rolling back regulations, cut corporate taxes, and shrink government through various means. If the U.S. follows Argentina’s pattern, inflation may spike in early to mid 2025 before stabilizing by the year’s end. Additionally, as is the case in Argentina, there have been significant investments in the United States by foreign countries and entities, and the dollar is trending well.
However, the economic contexts of Argentina and the United States differ significantly. Milei inherited a crippling economy, whereas Trump inherited a relatively strong one. Yet, Trump’s economic policies—particularly with China and the European Union—could undermine the administration’s domestic growth projections. Economic growth may also come at the cost of reduced public funding for numerous public and private institutions, increasing income inequality. While the corporations and wealthy individuals reap the benefits, while lower-income communities face reductions in essential services— raising concerns about the long-term consequences of such policies. While the future remains uncertain, Argentina offers a glimpse into what the U.S. might experience under Trump’s right-wing economic agenda.
