“Milei: the demagogue who throws Argentinians into a spiral of debt” – ft. Michael Roberts

Xavier Milei agrees on a new IMF loan of 20 bln dollars and u-turns on his original plan to dollarise the economy. What are the implications of this u turn for the argentinian people? And was Milei’s plan even a good idea in the first place? From our chat with Michae Roberts, a renowned marxist economist, a thesis seem to emerge: the promise of dollarising the economy was mostly a political move to gain consensus from an electorate concerned about the purchasing price of their currency. It would not have served the real interest of argentinian working classes but it proved a winning electoral move, yet not sustainable for the lack of dollar reserves.

Milei was then forced to follow the standard path of many argentinian previous governments: get a new loan to sustain the value of the pesos, winning the sympathy of international lenders by cutting the Welfare State and imposing a cut in real wages for the working class. This move is likely to end up in a indirect subsidy to capital flight, worsening argentinian international position, worsening Argentina’s dependence on foreign debt and perpetuating a vicious dynamic of foreign loans, cuts and wage deflation.