President Milei Vows to Curb Money Issuance for Public Spending
Argentina’s President Javier Milei stated that he will introduce a resolution to stop the Treasury from issuing money to finance public spending in the budget. Milei explained that this measure is aimed at protecting the current surplus and deepening his zero-deficit policies.
Argentina has become a leader in the economic world, and an ongoing experiment examining the effects of the implementation of libertarian policies at a state-nation level. In a recent televised speech, President Javier Milei announced a series of measures focused on deepening his zero-deficit policies.
Milei explained that he will introduce a resolution to stop the issuance of money directed to finance budgetary public spending. “On Monday, I will sign an instruction to the Ministry of Economy of the Nation to prohibit the Treasury from financing primary spending with monetary issuance,” he stated.
In addition, Milei will introduce a bill that will penalize national budget proposals resulting in deficits to finance spending. The bill establishes “a strict fiscal rule that requires the national Congress to obtain a financial result with balance or surplus,” Milei stressed, hinting at sanctions for lawmakers and public employees ignoring these considerations.
Milei’s measures come after the veto of several bills aimed at increasing pensions and emergency spending for disability purposes. He argued that the cost of implementing these reforms would be exorbitant, jeopardizing the fulfillment of the established economic goals.
“My job is not to look good, it is to do good, even if the cost is being called cruel,” Milei concluded.
Nonetheless, economists have criticized the government for this proposal, explaining that the monetary base has nearly doubled in just one year. Marcelo Trovatto, a local economist, highlighted that spending has migrated to other areas. Public spending did not disappear: it simply mutated in form and is now channeled toward paying interest on debt instruments in pesos, which the market can barely absorb without triggering exchange rate pressure,” he assessed.
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