What Trump Needs Is a Chainsaw

Now that the dust has settled we need to talk about what president-elect Trump should do to better our lives. I’m not talking about making America great again because America is already great, but it could be better.

I am not a Trump fan and wish we’d had better candidates from both parties but we didn’t. So like it or not that leaves us with Trump v. 2.0. I think what he actually will do will be pretty far from what he says he will do. No mass deportations. No authoritarian coup. No federal changes of women’s rights to an abortion. No mass firings of federal civil servants. He either doesn’t have the money or manpower or authority or competency to achieve his loudmouth goals. Not that he can’t chip away at things as he should. 

As a libertarian and advocate of free market capitalism I would advise Trump that the best thing he could do for us citizens is to reduce the burden of government and deficit spending. I can say that based on the history of big governments everywhere. There are many examples around the world where mostly free economies slouched their way into authoritarian government, stagnation, and poverty under the guise of welfarism-socialism.

When I say “libertarian” I am usually greeted with comments like, “Maybe that works on paper but not the real world” or “That’s just a fantasy and it’s never worked anywhere” or, “Get your head out of the clouds and deal with the real world!”

But now there is one country that is breaking away from socialism and transforming their economy to free market capitalism. Mirabile dictu. It’s working because it has always worked. That country is Argentina. It is led by a self-described libertarian anarcho-capitalist, President Javier Milei, who was elected by popular vote. 

Milei is a firebrand advocate for freedom and a powerful foe of socialism. It’s what got him elected as president. He does more than talk the talk, he walks the walk, bravely too. He campaigned with a chainsaw, saying he would cut back the role of Argentina’s big government and turn the country toward free market capitalism and prosperity.

Milei is a charismatic articulate intellectual thoroughly versed in free market economics as founded by the Austrian School of economics. Check out Lex Fridman’s recent interview of Milei to gain an understanding of what he is all about. It will change your thinking.

In order to tell you about the miracles he has accomplished in Argentina almost overnight, you need to know what was happening in Argentina when he took over.

Argentina had been ruled by socialists and fascist Peronists (including military juntas) since the 1930s and 1940s. They turned a wealthy country into an impoverished, debt-ridden, corrupt state. The socialists, military, and labor unions have worked hand-in-hand to suppress freedoms in order to maintain their power and the corrupt money that flows from it.

When Milei took office a year ago, the poverty rate was 57% of the population and growing. With money printing to pay for deficit spending the inflation rate was 211%, growing at 25% per month and heading toward hyperinflation. Price controls on thousands of products led to food shortages. What food had been available, including formerly plentiful beef, was beyond the reach of poor Argentinians. Rent controls shriveled the rental market. The bureaucracy was huge and accounted for 42% of GDP. Nationalized companies were hemorrhaging money and draining the Argentine treasury – $250 billion left the country despite currency controls. They owed the IMF $42 billion. Things were bad.

Milei started his reforms right away and they are working. He slashed half of the government ministries and laid off 50,000 government workers. By the end of Q1 he cut spending by 40%. In his first nine weeks he achieved the first government surplus in 12 years thus also reducing the burden of corruption on citizens.

Inflation is coming down but it is still high at about an annualized 32%, but with central bank reforms Milei projects it will be down to 18% or less next year. The poverty rate has declined by 11 percentage points to 46%, in large part by taming inflation and removing price controls. Rent controls were lifted doubling the amount of rentals and dramatically reducing rents.

GDP in 2023 was a -1.5%. In Q1 2024 it was -5.4%, but by Q2 it was -1.7% and improving. The declines had to do with the impact of Milei’s radical reforms and Milei warned of this temporary setback. But now they are growing again and the IMF projects 3.5% to 5.0% GDP growth in 2025. He’s not stopping. He’s setting a good example for the rest of the world.

Trump should start with a chainsaw to bring the budget under control. I have my doubts but with Musk and Ramaswamy as head of the new Department of Government Efficiency (DOGE) it is a good start. After all, the idea came directly from Milei’s Ministry of Deregulation and State Transformation.