Milei Announces Tax Cuts in Córdoba

Milei Promises Tax Cuts and Central Bank Closure

In Córdoba, Argentine President Javier Milei announced a significant tax reduction starting with the "country tax" (a specific export levy), a measure he claims will impact state coffers but prioritizes fulfilling commitments to Argentines. The promise arrives amid a fiscal adjustment that supporters describe as the largest ever undertaken, claiming it is already taming inflation and lowering prices. The announcement also includes closing the Central Bank, which proponents argue would make Argentina an unprecedented economic experiment.

The news has shocked economic circles. Milei states surpluses will be returned to Argentines via tax cuts, a formula trinc view as the only exit after decades of chronic deficit and money printing. The Economy Minister and Milei are described as "rockstars" by those seeing a Copernican shift in their policies. The declared goal: enabling every Argentine to be the architect of their own destiny.

The Adjustment Dividing Economists

The core debate centers on whether the adjustment is sustainable without unbearable social costs. Some argue Milei has removed corrupt hands from public funds and his plan is simply a return to origins, granting freedom. From this perspective, state intervention everywhere, especially where communists hold power, is so harmful that Milei seems alien when merely isolating state corruption.

Opponents argue the initial situation was so aberrant that opening any drawer reveals layers of filth. A recurring example: an Argentine paying €3-5 monthly for electricity due to absurd consumption because it was nearly free now realizes its true cost. This path is difficult; one cannot escape the hole without letting prices be free, yet they cannot be fully liberalized overnight as people cannot absorb the shock.

Optimistic calculations assume inflation has dropped four or five times in under six months, during a period when the previous government recklessly multiplied the money supply. Pessimistic scenarios warn that if no tangible changes reach pockets within a year, fatigue will set in and popular support will crumble.

Why Insist on Closing the Central Bank?

For this school of thought, the central bank is the most sophisticated theft mechanism ever created. It allows masters to inject money at will, dissipating savings. With fixed money supply, life could proceed perfectly through centuries, with slight deflation as humanity becomes more productive. They argue inflation appears only when someone steals from us or during wars/catastrophes.

This connects to broader criticism: the ECB and EU's great scam has been keeping rates far below inflation for decades, something never seen even with Banco de España. Consequently, a dignified life on a normal salary is impossible. A central bank is neither capitalist nor socialist; it is Ali Baba’s cave scaled up, kleptocracy institutionalized.

If successful, the Argentine experiment would have a domino effect. Spain needs Milei to succeed, it is argued, to end the left across Latin America. If Milei achieves his goals, PSOE and PP are finished, proving empirically that socialism means backwardness and state weight only enriches a few fools who would otherwise be destitute.

Economic Interest as Unexpected Success

Beyond the showmanship, Milei's great success is sparking interest in economics. In a country where inflation was blamed on greedy shopkeepers and subsidies were deemed natural, Milei began discussing Mises and Hayek, capturing attention. Today, no one believes inflation is caused by shopkeepers.

Recently at Luna Park, crowds chanted for Huerta de Soto, unknown to 0.1% of Spaniards. Young people ignited a fever for Mises, Friedman, or Hayek, influencing parents, uncles, and grandparents. His audiences are not minorities.

Parallels with Spain are inevitable. There, politicians incited stone-throwing at supermarkets during inflation. Ministers accused stores of selfishness. Even in Spain, this narrative stuck among supporters. Once demagoguery takes root, experience shows leaders accelerate until the end regardless of consequences.

Risks of a Point-of-No-Return Path

Next year is crucial. If growth begins and employment, wages, and pensions recover slightly, hope returns. If stagnation persists in the pit with no changes in a year, fatigue sets in. Popular support is essential.

Defenders say Milei is barely an experiment; he simply removed corrupt hands from public funds and reduces state weight. Return to origins and freedom. Spanish leftists should be stunned and ashamed, having wasted lives behind lies from Sánchez, Zapatero, and other high-level socialists.

Milei's philosophy leaves no room for defeated leftists. The open question remains: will Argentina's largest-ever adjustment restore prosperity before social patience expires? With these materials, the basket may succeed or burn. No one knows yet.