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What people don't talk about is that the good things the new administration achieved came with a big price: an expected drop of close to 4% in GDP. With the exp

What people don't talk about is that the good things the new administration achieved came with a big price: an expected drop of close to 4% in GDP. With the expectation of recovering it fast next year. So next year is the turning point for Milei, if the recession ends or intensifies. A shrinking economy with smaller inflation but in recession is worse than a growing economy with higher inflation. Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.

sam_lowry_ 2y ago
The evil is in the details. The inflation rate pre-Milei distorted economy to the point where any meaningful model based on Austrian or Keynesian or whatever ideas was impossible.
luzojeda 2y ago
Almost everyone I know and all newspapers I read here, in Argentina, do talk about that. The cost is an inevitable one when you reach 3 digits inflation. Hope we learn our lesson though we didn't in the 2000s when we brought inflation again. To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?
- marcosdumay 2y ago
  > What other way is there? Remember that inflation is something the government chooses to create. It's not some natural disaster. The other way is to remove the power to create it from the executive leader and give it to some institution that is more stable.
  - luzojeda 2y ago
    Of course but once you have 3 digits inflation, what other way to reduce is there besides cutting the supply of money suddenly in a shock? People won't like it, I didn't like it either but the two other presidents tried various methods such as price controls and that didn't help, on the contrary.
    - meiraleal 2y ago
      There are alternatives. Brazil fixed the hyperinflation problem in a different way, maybe Argentina should copy it: https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-... previous discussion: https://news.ycombinator.com/item?id=9617710 https://news.ycombinator.com/item?id=9617710
      - marcosdumay 2y ago
        Brazil pretty much did a monetary shock by reducing the money supply. Just like Milei. We did more stuff besides the shock. But we also had more inflation, and it was more persistent.
    - marcosdumay 2y ago
      If you have long-lasting inflation, you need some shock to cut it. But reducing the supply of money only does shock, it's keeping it constant over the long term that avoids inflation. And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...
marcosdumay 2y ago
When in borderline hyperinflation, the GDP number is meaningless. Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.
- meiraleal 2y ago
  GDP calculation takes inflation into account otherwise even now the "meaningless number" would be growing with Milei.
  - marcosdumay 2y ago
    The inflation calculation is the one that doesn't get the inflation correctly into account. That's because it always have errors, and those errors grow more than linearly with the inflation rate.
Xunjin 2y ago
Let's not forget the social numbers. Reuters: BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier. https://www.reuters.com/world/americas/argentina-poverty-rate-soars-nearly-53-first-half-2024-2024-09-26/ https://www.reuters.com/world/americas/argentina-poverty-rat...
- elforce002 2y ago
  He explained that on Lex Fridman's podcast. https://www.youtube.com/watch?v=8NLzc9kobDk https://www.youtube.com/watch?v=8NLzc9kobDk

sam_lowry_ 2y ago

The evil is in the details. The inflation rate pre-Milei distorted economy to the point where any meaningful model based on Austrian or Keynesian or whatever ideas was impossible.

luzojeda 2y ago

Almost everyone I know and all newspapers I read here, in Argentina, do talk about that. The cost is an inevitable one when you reach 3 digits inflation. Hope we learn our lesson though we didn't in the 2000s when we brought inflation again. To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?

marcosdumay 2y ago
> What other way is there? Remember that inflation is something the government chooses to create. It's not some natural disaster. The other way is to remove the power to create it from the executive leader and give it to some institution that is more stable.
- luzojeda 2y ago
  Of course but once you have 3 digits inflation, what other way to reduce is there besides cutting the supply of money suddenly in a shock? People won't like it, I didn't like it either but the two other presidents tried various methods such as price controls and that didn't help, on the contrary.
  - meiraleal 2y ago
    There are alternatives. Brazil fixed the hyperinflation problem in a different way, maybe Argentina should copy it: https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-... previous discussion: https://news.ycombinator.com/item?id=9617710 https://news.ycombinator.com/item?id=9617710
    - marcosdumay 2y ago
      Brazil pretty much did a monetary shock by reducing the money supply. Just like Milei. We did more stuff besides the shock. But we also had more inflation, and it was more persistent.
  - marcosdumay 2y ago
    If you have long-lasting inflation, you need some shock to cut it. But reducing the supply of money only does shock, it's keeping it constant over the long term that avoids inflation. And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...

marcosdumay 2y ago

When in borderline hyperinflation, the GDP number is meaningless. Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.

meiraleal 2y ago
GDP calculation takes inflation into account otherwise even now the "meaningless number" would be growing with Milei.
- marcosdumay 2y ago
  The inflation calculation is the one that doesn't get the inflation correctly into account. That's because it always have errors, and those errors grow more than linearly with the inflation rate.

Xunjin 2y ago

Let's not forget the social numbers. Reuters: BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier. https://www.reuters.com/world/americas/argentina-poverty-rate-soars-nearly-53-first-half-2024-2024-09-26/ https://www.reuters.com/world/americas/argentina-poverty-rat...

elforce002 2y ago
He explained that on Lex Fridman's podcast. https://www.youtube.com/watch?v=8NLzc9kobDk https://www.youtube.com/watch?v=8NLzc9kobDk