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Self-styled anarcho-capitalist President Javier Milei of Argentina marked a notable moment in international relations as he became the first foreign leader to visit President-elect Donald Trump following his victory in November. The meeting took place at Trump’s Mar-a-Lago resort in Florida, where Milei addressed attendees at a gala dinner as a VIP speaker.
Milei praised Trump’s recent electoral success as “the greatest political comeback in all of history,” attributing it to a rebellion against the political establishment, which he claimed was undertaken at great personal risk to Trump.
Also present at the gala was Tesla and SpaceX CEO Elon Musk, who Milei commended for his contributions towards humanity. “I would like to thank the great Elon Musk for the wonderful job he has been doing,” he stated, expressing admiration through an interpreter during the event.
The interaction between Milei, Musk, and Trump hints at a developing relationship between these influential figures. Milei has vowed to rejuvenate Argentina’s faltering economy through drastic measures he describes as “shock therapy,” involving sweeping cuts to public spending and heavy deregulation.
Milei and Musk have established a rapport, having met multiple times in the past. Notably, Milei has visited Musk’s Tesla factory and shared photographs of their encounters. A particular image from September showcased Musk wearing a “dark MAGA” hat, further solidifying their connection. Social media posts from the gala highlighted the camaraderie shared among the three men.
In recent days, Musk has taken on a significant advisory role for Trump as he embarks on assembling his Cabinet. This includes unexpected selections who are expected to implement their own styles of “shock therapy” within the federal agencies they will lead.
As part of Trump’s policy framework, Musk and entrepreneur Vivek Ramaswamy are slated to oversee a newly formed initiative called the “Department of Government Efficiency.” This entity aims to substantially reduce the federal budget. Musk has publicly stated his ambition to slash $2 trillion from the almost $6.75 trillion U.S. budget, echoing Milei’s fiscal measures in Argentina.
Musk articulated the belief that government spending directly contributes to inflation or translates into taxes, declaring that the proposed Department will “fix that” at a recent rally for Trump.
The successes Milei has achieved since he assumed the presidency in December offer context to Musk’s ambitious budget reduction goals. Under Milei, federal spending in Argentina has decreased by 32%, according to the Center for Argentine Political Economy (CEPA). Despite facing an annual inflation rate exceeding 300%, Argentina recorded a notable monthly inflation rate of 2.7% in October—the lowest since 2017.
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Milei’s overarching initiative centers on slashing federal expenditures. He has reportedly become a consultative source for Musk, who is seeking advice on how to implement similar strategies in the United States. “The U.S. has noticed and is following our example,” Milei mentioned during a recent conference, indicating that Musk has been in discussions with Argentina’s Minister of Deregulation, Federico Sturzenegger, regarding potential deregulation of the U.S. economy.
In Argentina, Milei has notably reduced the number of government ministries from 22 to 9, terminated over 30,000 public sector jobs, and halted various infrastructure projects. While the aggressive cuts have plunged the country into a recession, resulting in a GDP contraction of over 5% in the first quarter of 2024, projections from the World Bank suggest that the economy may stabilize with a growth forecast of 5% by 2025.
Implementing similar cuts in the United States is anticipated to be far more challenging due to the much larger size of its national budget, which approximately stands at $101 billion—less than that of New York City alone. Additionally, the clarity of voter support for such radical fiscal reforms remains uncertain in America, as Milei’s electoral mandate was strongly rooted in his pledge to minimize government spending.
While Trump campaigned on initiatives focused on border security and economic growth—largely through tax reforms—there was limited emphasis on fiscal austerity. Recent trends in the markets have reflected this uncertainty, as a rise in long-term U.S. interest rates hints at renewed scrutiny from investors, historically referred to as “bond vigilantes.” This group holds the belief that if governmental agencies do not manage their fiscal responsibilities, the bond market will react by increasing borrowing costs.
Correction: This report has been amended to rectify the spelling of Sylvester Stallone’s name.
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