[programmertote]

What's the benefit for trump and co. helping out Argentina (other than helping a kindred spirit, the current Argentinian president)? I really can't see any benefit for the US in this move. Hopefully, someone more versed in economics can explain what the missing angle is, if any.

[nradov]

I'm not convinced this bailout is good policy but you could maybe make a case that it's the least bad option. If the USA doesn't help Argentina then the lender of last resort becomes China. Do we want China to gain more control and influence in the Americas?

https://sccei.fsi.stanford.edu/china-briefs/chinas-overseas-...

[estearum]

The US is not the global or continental lender of last resort. The IMF traditionally holds that role and it appears to be at its limit with regard to Argentina due to serial defaulting, political instability, corruption, and overall lack of credibility.

Not compelling at all to say the US just generally has an imperative to buy debt or lend to countries whenever they're least creditable just because China might do it anyway.

[mrcwinn]

I don't know, it sounds pretty compelling to me.

[hulitu]

IMF is an US intrument.

[estearum]

Up to you if you want to describe holding a 16% controlling stake as "its instrument," but I don't think many would.

In practice, your point is demonstrably false by the fact that IMF is likely backing away from further financing to Argentina while the US is stepping in.

[nradov]

Well that was my point. Argentina probably can't borrow any more from the IMF so that leaves the USA or China. China might do it for political reasons even if they lose money so we need to consider whether we're willing to accept the negative geopolitical consequences of that.

[estearum]

If the US had any desire to maintain influence in the Americas (or anywhere else), it wouldn't be calling their leaders drug lords, cutting off foreign aid, engaging in extrajudicial killings off their shores, threatening them with carrier groups, violating previously agreed-upon trade deals, etc.

Argentina also would not be getting some special treatment. There are far more strategically important and similarly struggling economies in the Americas and elsewhere that the US could choose to assist and is not.

There's just no coherence to this theory.

This is rich guys helping out their rich guy buddies using taxpayer dollars.

[hulitu]

> it wouldn't be calling their leaders drug lords, cutting off foreign aid, engaging in extrajudicial killings off their shores, threatening them with carrier groups, violating previously agreed-upon trade deals, etc.

The world policeman is doing world policeman things. Luckily things are starting to get worse for the world policeman so those things might happen less.

[estearum]

> The world policeman is doing world policeman things

Actually a lot of this is extremely aberrational, even measured by the United States' own "unique" standards.

[actionfromafar]

Why would it happen less? Empires don't go down in peace. The dying Soviet empire morphed into the incredibly violent, dying Russian empire under Putin.

[zmgsabst]

The US is playing nice with Argentina and El Salvador while harsh with Colombia and Venezuela due to the perceived difference in their politics.

Carrot, stick.

> This is rich guys helping out their rich guy buddies using taxpayer dollars.

Almost all foreign aid is this, complete with kickbacks such as donations to the Clinton Foundation, etc. Even domestically, eg, the high percentage of homeless and poverty support disappearing into NGO pockets.

[igor47]

What does "the high percentage" mean? I donate plenty of money to both foreign and domestic non-profits and a pretty bad overhead is 20% in my experience. I generally aim for overhead ratios of 10% or so and have no problems finding lots of quality orgs in that range.

[thrance]

If your goal is to help the Argentinian people, you would let Milei's extremely destructive and incompetent government fail and fall. This bailout only gives "General AnCap" more time to sell the country's future.

[nradov]

And then what? Even if Milei fails and leaves office, the Argentinian people will need a balanced budget. They have run out of other peoples' money.

[dzhiurgis]

Making people pay for public transport and power isn’t exactly destruction.

[donavanm]

Its intervening to save a democratic and aligned country from yet-another economic collapse and political crises at their upcoming national elections. Not dissimilar to what the us did for mexico during the peso crisis and revaluation in the 90s.

I dont know why “bail out” is the headline term, it’s closer to a “currency backstop” AFAIK. The us is effectively extending hard dollars in exchange for pesos, allowing the argentine govt to not be destroyed in the open currency markets. If this works the peso would retain (or gain) value as the country recovers (economically, due to the ongoing reforms) and the us could feasibly even profit.

On the USD and peso backstop its important to note that “dollarization” was a big talking point for milei. But argentina never had anywhere close to enough USD reserves or even USD economic flows to make that at all feasible ever. Like many many billions away from plausible. So there was a background theme of trying to catch them out on that as well since the last elections.

Edit: and for context the current run against the peso is effectively because of dumb milei posturing ahead of regional elections, and a strong populist/peronist result. Lots of fear that if its repeated at the upcoming national elections then argentina goes back to kirchner style populism and debt/economic blow up.

[coliveira]

The only people who will benefit from this are the financial elite in Argentina who are selling pesos and getting dollars as quickly as they can, and the hedge funds who invested in Argentina and need a way out. The current government, which is a bad joke, will never win anything else. The economy will continue to go south because this plan doesn't work even in the short term.

[donavanm]

I personally think milei the politician is a clown. And many of his statements are just offensive to anyone who can spark two braincells together. I also thought he was going to burn it all down in a blaze of hubris after his election.

But its hard to argue with arresting the inflation, gdp, and budget surplus numbers. Im not sure how the economy is “going south.” Generously the policies have arrested the slide?

I dont imagine the typical argentine is better off with 200% inflation, 50% unemployment, and a 57% poverty rate. Avoiding that return seems to be quite a benefit for just about everyone?

[watwut]

It is easy to arguw with those. The plan of artificially keeping currency is not a new one and was tried multiple times before.

Each time, you have initial seeming success and then crash.

[Daishiman]

> But its hard to argue with arresting the inflation, gdp, and budget surplus numbers. Im not sure how the economy is “going south.” Generously the policies have arrested the slide?

Sure it is. Public education and science funding is at a historic minimum that is destroying tons of long term scientific and educational initiatives. Roads are falling apart in a gigantic country and what’s left of rail is being scrapped for parts and sold to private entities that will let rails decay just like everywhere else where it was privatized.

Consumer spending continues to go down, industry is not competitive with this fake exchange rate causing a loss of high quality jobs and forcing everyone to take a second job as an Uber driver.

We’ve seen this play out again and again. The government will default, then hyperinflation and social crises until the low prices of everything make the economy competitive again.

This has played out again and again with far more competent governments and we keep being right about it.

[nradov]

The Argentinian government was literally out of cash. There was nothing left and no ability to borrow. So complaining about cuts to education, science, and transportation seems a little silly. How exactly were they supposed to pay for it?

In the long run there are things they can do to raise revenue and cut waste. But when you're stuck in a deep hole the first thing you need to do is stop digging.

[rightbyte]

One way to cover expenses is to raise income. The dude running the gov is a libertarian. I don't think he sees running out of other peoples money as a problem. It might be the point. "Big gov".

[AbraKdabra]

> is at a historic minimum that is destroying tons of long term scientific and educational initiatives.

Education was always shit. I live in Argentina, the PISA results from last exam are demential and I doubt they can get worse, don't lie to people please. There's absolutely no way in the world education can get to today levels in one and a half years of Milei.

> Roads are falling apart in a gigantic country

Roads were NEVER good, either you don't live in Argentina and you definitely can't have an opinion, or you live here and never left your house. Again, please don't lie to people, we have been living in hell for 20 years, nothing breaks like you say in one and a half years.

> and what’s left of rail is being scrapped for parts and sold to private entities that will let rails decay just like everywhere else where it was privatized.

Whoa you have a crystal magic ball? The kukas governed for 20 years, don't tell me all the railroad system decayed exactly when Milei assumed...

[Daishiman]

"Kukas"

Ok, good to know you have no idea what you're talking about.

Everything you're saying is hyperbole. "Things are bad" is not a serious talking point. Things are relative and between the education in Zimbabwe and Denmark there is a huge gap.

[clipsy]

> I dont know why “bail out” is the headline term, it’s closer to a “currency backstop” AFAIK. The us is effectively extending hard dollars in exchange for pesos, allowing the argentine govt to not be destroyed in the open currency markets. If this works the peso would retain (or gain) value as the country recovers (economically, due to the ongoing reforms) and the us could feasibly even profit.

If.

[nocoiner]

No no no, you don’t get it, it’s not a “bailout,” it’s simply a “magic bean repurchase facility” whereby dollars are made available to holders of magic beans. When the magic beans sprout and reach the sky, the profit could be considerable.

[donavanm]

FX is magic beans? I guess if youre of the mind that “fiat is theft”. But in that case Im not sure why youd care if you can always go back to farming (digital) gold.

Although, to be fair, I can see the perspective that argentine _debt_ is magic beans funded by hopes, wishes, and the IMFs argentine refinancing.

[sofixa]

> FX is magic beans?

> Although, to be fair, I can see the perspective that argentine _debt_ is magic beans funded by hopes, wishes, and the IMFs argentine refinancing.

Exactly. FX isn't magic beans. The currency of a country that has defaulted more time than anyone cares to remember is magic beans though.

There is a reason for the old saying "There are 4 types of economies - developed, developing, Argentina and Japan".

[8note]

couldn't the US do better by buying the pesos after the crash, and then when the argentine peso regains its value as part of recovery, the US gets a bigger profit?

[jordanb]

Argentina wouldn't be "destroyed" by a currency devaluation. But Milei wants to keep the Peso strong so his upper/middle class supporters can keep buying electronics and going on international vacations.. at least until the next election.

[durandal1]

Normal productive people doing normal stuff reframed through the lens of pettiness and jealousy.

[Daishiman]

Keeping middle class salaries artificially high while destroying high value industry and increasing debt isn’t pettiness.

Are you Argentinian? Do you even realize this is at least the third or fourth time in the country’s history where this exact scenario has happened?

[estearum]

Scott Bessent is besties with Rob Citrone who is one of the largest purchasers of Argentine debt. He lobbied Bessent, Bessent said "Sure!"

Sometimes it really is that simple.

https://paulkrugman.substack.com/p/bailing-out-bessents-budd...

https://www.nytimes.com/2025/10/09/us/politics/argentina-bai...

https://www.motherjones.com/politics/2025/09/trump-argentina...

[martythemaniak]

Talking about the naked, open corruption and bribery is considered gauche in polite society. Executing random Colombian fisherman, OTOH, is perfectly fine.

[jauntywundrkind]

The connection is very clear. Amazing Krugman piece. There's still a little bit of a why question to me? What will Citrone or anyone else ever be able to provide back, since they all know this is going to fail, & are using this loan to jack up prices & exit their positions?

Maybe there's some more elaborate way this will enrich certain American cronies. Maybe.

But I tend to think the answer comes if we look back 80 years. A lot of bad evil people needed a friendly state to run to after WWII ended. Today, beyond just being friends-of-an-(evil-doing)-feather together with some other exploitative public-services-destroying extremists, part of me thinks, maybe perhaps: Argentina is being set up as a new exit, a new place to flee too, when justice comes a calling.

[rubyn00bie]

From the Mother Jones article:

> Citrone, the co-founder of Discovery Capital Management, is also a friend and former colleague of Bessent—a fact that has not been previously reported in US media outlets. Citrone, by his own account, helped make Bessent very wealthy.

I think it's simply that Bessent can give his buddy (Citrone), who made him (Bessent) "very wealthy," a bailout at zero cost to any of them. $20 billion is really insignificant for the US government, even if a gross waste of tax dollars, and they know there's not going to be a single repercussion.

> Argentina is being set up as a new exit, a new place to flee too, when justice comes a calling.

I too have been thinking that lately. It wouldn't be ideal for any of them but, from their perspectives, it surely would be better than the alternative.

[treis]

>So while millions of children must die to save a few billion dollars, taxpayers are on the hook for billions more to bail out Bessent’s hedge fund buddies in a predictably futile attempt to save the Elon Musk of the South.

It's a good thing he didn't give into hyperbole...

[cobbal]

Which part of that sentence do you think is hyperbole?

> Forecasting models predicted that the current steep funding cuts could result in more than 14,051,750 (uncertainty interval 8,475,990-19,662,191) additional all-age deaths, including 4,537,157 (3,124,796-5,910,791) in children younger than age 5 years, by 2030.

https://www.thelancet.com/journals/lancet/article/PIIS0140-6...

[croon]

That is the projected death toll of cutting USAID, which had a total budget half of the Argentina bailout.

[magicalist]

The sources are linked right in line, so which part is hyperbole?

https://ph.ucla.edu/news-events/news/research-finds-more-14-...

[refurb]

The claim that it was done to help his hedge fund buddies has no source.

[piva00]

It will be damn hard to get Bessent or close sources to him to confirm it.

Sometimes you have to go by circumstantial evidence which, in this case, is quite clear: Rob Citrone helped Bessent to make a lot of money, Citrone is deeply invested in Argentinian bonds and overall economy; Bessent controls the US purse, we can be very suspicious about this move since it doesn't make any sense for the US to burn money to help bail out Argentina.

If you have a better theory for why this was done it might help reduce the suspicious nature of it. Just calling "there are no sources" doesn't.

[refurb]

Sure! The US sees Milei as an ally. The US likes having allies.

So the US lends $40B to Argentina as a backstop to their currency controls.

That seems like a much more reasonable scenario than Bessent convincing Trump to use money to help his investing buddy?

[piva00]

Bessent's friend Rob Citrone is heavily invested in Argentinian bonds, and companies [0].

[0] https://www.bloomberglinea.com/2024/10/18/exclusive-rob-citr...

[vkou]

1. Every dollar that he can spend on whatever he wants without congressional permission is another nail in the legal theory of 'The president is an unaccountable god-king.'

2. What kind of god-king wouldn't reward his friends and allies?

[clipsy]

Perhaps some of his administration consider Argentina a back-up in the event that things go poorly for them in America. I've heard of something like that happening before.

[WhereIsTheTruth]

I'd guess it's because of its natural resources and "cheap" labor which is only getting cheaper, whether this was done intentionally or not, it seems to go hand in hand with CHIPS Act

https://www.csis.org/analysis/south-americas-lithium-triangl...

[bediger4000]

There is no benefit for the US as a country. You're forgetting that Trump's first impeachment showed us he runs foreign policy for his own benefit. Trump is almost certainly getting some of that money as a kickback.

Speculation is that some of Bessent's buddies are financially exposed to an Argentinian default, and that this keeps them safe from losing money on a sovereign default.

[denkmoon]

Trump views Milei as a buddy, it's that simple. The personal angle is more important than you might think. Plenty of insiders have discussed this aspect of Trump's foreign policy, most recently I watched this podcast with John Bolton talking about it https://www.youtube.com/watch?v=T_BB-96D6qg

[nashashmi]

This is the first attempt at aligning the world to a Trump World Order and away from the New world order started by Eisenhower.

[hulitu]

Monroe doctrin.

[watwut]

Billionaire friends of mister Besset need that bailout, cause they invested into Argentina. They need out.

That is it.

[jordanb]

Apparently there are a lot of hedge funds invested in Argentina. Presumably Trump's support will decline once they've covered their positions.

[gdulli]

Make America's Accredited Investors Great Again

[ta9000]

It really is that simple, corruption.

[dysoco]

What follows is just my theory, but I think it's merely a matter of politics and culture.

Trump doesn't want Milei's government to fail, he needs successful examples of neoliberal, anti-woke, populist, anti-inmigration governments and Milei is probably his best bet. He's not helping Argentina, he's helping a political ally's party.

Betting on the Peso doesn't make sense. It's a lot of money but it's <1% USA's budget. Trump was probably thinking the American media would not pay too much attention to it but apparently it slightly backfired and they did.

[loeg]

Why would Trump care about neoliberalism in the slightest? Trump is anti-neoliberal.

[dysoco]

Fair enough, forget I said neoliberalism but the rest of the keywords apply. Evidently they don't care that one is neoliberal and the other is protectionist, I guess they care more about anti-wokeism at the end of the day.

[nine_zeros]

They used taxpayer money to help the original investors into Argentina who invested a few years ago. It went to wall street.

[thehappypm]

If America saves Argentina, and Argentina becomes a powerful country again, that is a powerful ally we could have for a century.

[anonymars]

Have you paid any attention to how the US has been treating its actual existing powerful allies this year? Is Argentina a more valuable ally than, say, Canada?