Milei's Scam by the Numbers

Saifedean Ammous, a libertarian anarchist and Austrian school economist, delivers a scathing assessment of Javier Milei's presidency after 30 months in office. Despite being the first world leader to profess Austrian economic ideas, Milei's policies, Ammous argues, bear no resemblance to Austrian economics and instead constitute "one of the most inflationary presidencies in Argentina's highly inflationary history." The presidency is labelled a failure on all important questions: prices continue to rise, economic activity is declining, and government debt has ballooned.

Broken Promises on Monetary Policy

The essay identifies Milei's abandonment of his central bank closure pledge as his biggest broken promise. During his campaign, Milei called this non-negotiable—the Austrian position. Instead, he shifted to "Chicago Keynesian nonsense" about managing the money supply and reviving the peso. Dollarisation, another campaign promise, was also jettisoned in favour of "free competition in currency," dismissed as ridiculous given the central bank's maintained monopoly on banking licences and its mandate that banks use the peso and hold government bonds.

The consequences are stark. March consumer prices rose 3.4% in one month—an annualised rate of 49%—making Argentina the country with the fourth-highest price inflation rate in the world, behind only Venezuela, South Sudan, and Iran. This marked the tenth consecutive month of rising inflation rates. Ammous rejects blaming predecessors: "Prices are not a perpetual motion machine that cannot be stopped once unleashed." He cites Ecuador and El Salvador, where dollarisation in 2000–2001 practically ended high consumer price inflation, with rates now in single digits. Ecuador's case is particularly relevant: despite a calamitous currency and banking collapse preceding dollarisation, high inflation was eliminated after two and a half years. By contrast, Milei's chosen path has delivered "pain for two and a half years and it promises to deliver a lot more." A particularly surprising point: when April's monthly CPI came in at 2.6% (31% annualised), Milei tweeted triumphantly about a "return to normal"—a year after celebrating rates dropping below 2%, seemingly conditioning Argentines to accept permanent ~20% annual price rises.

Quadrupling the Money Supply

Ammous presents specific figures: money supply aggregates have "quadrupled or tripled in a mere 29 months at a compound monthly growth rate of around 5%." Consumer prices have also tripled over the same period at the same monthly compound rate. He notes that Milei has delivered a higher annual growth rate in the monetary base than his four predecessors and a higher annual growth rate in the consumer price index than three of the four predecessors.

$71 Billion in New Debt

Despite promising to fight chronic indebtedness, Milei has increased total Argentine debt from $423 billion to $494 billion—a $71 billion rise. Argentina is now the IMF's primary borrower, accounting for around 35% of its total lending portfolio. A striking calculation follows: although currency devaluation reduced the dollar value of inherited peso debt by 70% (from ~$159 billion to ~$47 billion), continued issuance of high-interest peso debt has pushed the total dollar value of peso debt to $233 billion. This represents a $185 billion increase in high-interest peso debt in just two years—the "fuel for the Argentine carry trade, the cancer killing Argentina."

The claimed budget surplus is attributed to "creative accounting": the exorbitant interest on LECAP bonds is not counted as government expenditure. Meanwhile, state monopolies in education, healthcare, and infrastructure persist but are starved of financing, causing "the destruction of essential institutions and the continuous degradation of the country." The proper libertarian approach, Ammous argues, would be to liberalise these institutions, not degrade them while enriching carry trade participants.

The Quarter-Trillion-Dollar Carry Trade Ponzi

The carry trade—buying government bonds at exorbitant interest rates—is described as having "practically become the main industry in Argentina." With total stock market capitalisation around $90 billion, the carry trade constitutes approximately $233 billion of investment. Milei has added "more than two entire Argentine stock markets worth of capital" into this government bond Ponzi scheme. The short-term consequences include hollowed-out productive capital, business closures, and job destruction. Industrial production is down 7.9% over two years; capacity utilisation stands at 53.6%. In February alone, the economy shrank 2.6%; unemployment has risen to 7.5%, up 1.1 percentage points since Milei took office.

A surprising and pointed observation: "If the problem with socialism is that eventually it runs out of other people's money, the problem with Mileiism is that it doesn't," as it perpetually finds new lenders. These include the IMF, IDB, World Bank, and most recently the US Treasury, which "straight up bought pesos to prop up the exchange rate." These bailouts save "parasite hedge funds" while destroying productive capital and necessitating further money creation.

The 1,000-Times Libra Scam

Milei's promotion of the Libra "scamcoin" on Twitter is presented as a microcosm of his presidency. After Milei promoted it as supporting Argentine entrepreneurs, creators allegedly dumped tokens, "rugging" buyers and making off with tens of millions, with Milei allegedly receiving a hefty commission. Ammous draws a direct parallel: "Austrian economics and libertarianism are to the peso what decentralisation and small businesses are to Libra. The marketing used to lure unsuspecting rubes into the affinity scam." The peso scam is "around 1,000 times larger than the Libra scam," with victims being "the poorest 95% of Argentines."

Reputational Damage to Austrian Economics

The essay concludes with a warning about lasting damage. Milei's presidency will leave Argentines with "a catastrophic legacy of inflation and a massive debt burden to bear for generations" and Austrian economists with "a devastating reputational debt for generations to come." The Mises Institute is criticised for ending its association with Professor Hans-Hermann Hoppe—"the greatest living Austrian economist"—apparently over his criticisms of Milei, while publishing "a continuous stream of prom propaganda." Ammous urges Austrians to recognise that the fame Milei brings is "part of a Faustian bargain whose cost is the destruction of the school's reputation," warning that Austrian economics risks being seen as "the ideology of inflation, mass indebtedness to bankers, and destroying essential institutions and infrastructure in countries while bolstering the Zionist genocidal regime's institutions for race-based mass murder and land theft."