Elon Musk’s DOGE is looking to Argentina for inspiration to slash public spending
About a year ago, standing in front of a whiteboard with a gleam in his eye, Javier Milei started pulling apart Argentina’s government.
“Ministry of Culture — Out! Ministry of Environment and Sustainable Development — Out!” he yelled with escalating joy, shredding an org chart of the state.
Soon after, he was elected his nation’s president and started to make good on his program of massive spending cuts.
Javier Milei pulls apart a chart of Argentina’s state in a video published on September 9, 2023.
Watching admiringly were Vivek Ramaswamy and Elon Musk, the men now charged with a similar task in the US.
Both men have praised Milei repeatedly, seeing in him a model for their Department of Government Efficiency.
So, how has Milei’s hack-and-slash agenda played out? And what could it mean for the federal government?
‘Just cut to the chase’
Milei’s program was swift and brutal.
Within days of taking office, Milei shut down half of the country’s 18 ministries by presidential decree.
He fired some 25,000 public employees, and is working through 75,000 more.
Cuts of a similar scale in the US, with about seven times Argentina’s population, would mean shedding 700,000 government workers.
Milei also hacked back the Argentine equivalent of Social Security by an estimated third, canceled infrastructure projects, and froze budgets at the surviving ministries.
This week, in an interview with the podcaster Lex Fridman, Milei said DOGE should act with speed too.
When prompted for advice, he said, “Just cut to the chase.”
Milei described a physical timer in Argetina’s deregulation ministry meant to focus minds by counting down days.
Harsh medicine
His measures helped tame a crisis: Argentina’s inflation was 25.5% when Milei took office, and as of October, it was 2.7%.
The government ran its first surplus in 12 years, and trimmed tens of billions from its national debt.
It also spurred a recession and mass civil unrest as hundreds of thousands of people took to the streets and unions held regular strikes across the country.
Economists told B-17 that major differences in the US and Argentine economies make the two tough to compare.
First — Milei took power in an economic meltdown where inflation of 25.5% was hammering the economy.
Milei solved that, said Maria Victoria Murillo, director of the Institute of Latin American Studies at Columbia University.
But “the consequence was a deep recession that facilitated controlling inflation but has been very painful and is accepted because inflation was terrible and people do not want to go back.”
“I am not certain that would be the case in the US,” she said.
Argentinians have taken to the streets to protest against Javier Milei’s economic policies since his election.
Kimberley Sperrfechter, Capital Economics’ Latin America Economist, noted that President-elect Donald Trump’s policies mostly point to more state spending, not less. He explicitly ruled out changes to Social Security, the government’s single biggest budget item.
The US balance of power is also different. Milei was able to make his changes mostly by executive decree. As B-17 reported, Trump would have to contend with Congress, where Republicans have only slender majorities.
The toast of Mar-a-Lago
DOGE’s leaders don’t seem blind to that — in August, Ramaswamy touted Milei as an inspiration but said Argentina was “much less complicated” an economy to overhaul.
It hasn’t dimmed Milei’s popularity in Trumpworld.
Milei was a guest of Trump’s at Mar-a-Lago, the first world leader to meet him since his election victory, where he called his victory “the greatest political comeback in history.”
On the Fridman podcast, Milei advised Musk and Ramaswamy to go “all the way” in cutting US federal spending.
Since Election Day, Ramaswamy and Musk have posted about Milei more than a dozen times: DOGE is readying its work with at least one eye on Buenos Aires.
