Given my enthusiasm for Javier Milei and his libertarian reforms, I’m excited to be in Buenos Aires for a week-long program on “Understanding Argentina’s Transformations Under Milei.”

This means a heavy does of Milei-ism this week.

For today’s column, I’m going to share some slides from a presentation by Alejandro Rodriguez on the “Inheritance” Milei had to deal with upon taking office.

We’ll start with this slide showing a decade of economic stagnation (the blue line) and gradually – and then suddenly and dramatically – rising inflation (the red line).

Why did inflation explode?

A big part of the answer, as illustrated by this second slide, is that the burden of government spending increased dramatically in the 20 years leading to Milei’s election.

Argentina had a major problem with “fiscal dominance,” which is the economic term to describe when politicians use the central bank to finance budget deficits.

And this bad monetary policy, combined with capital controls, led to a disastrous situation, as shown by this chart.

Last but not least, here’s a summary of what was needed when Milei was elected at the end of 2023.

I’ll close by emphasizing the last line of the above slide. The left (the “Peronists“) controlled the legislature and it seemed Milei had little or no chance of success.

The rest of this week’s columns will focus on what Milei achieved.

P.S. To learn more about the horrible situation Milei inherited, click here, here, here, here, and here.