No individual, no corporation, and no country ever runs out of money. Ever. What all three run out of is investor trust.
The above truth rates frequent repeat in light of a recent news account about Javier Milei, Argentina's president. The report indicated what's well known, that President-elect Donald Trump is a big fan of Milei's. This speaks well of Trump for appreciating Milei's unrelenting belief that Argentina's path back to prosperity will be paved by a government that taxes, spends (the most economy-crushing tax of all), regulates, tariffs, and devalues quite a bit less.
Milei is a libertarian, and as a libertarian he understands that an economy is nothing more than a collection of individuals. Broken down to the individual, it's then easy to see that no individual's economy is improved if more of his or her work is taxed, if more work time is spent with regulators, if the ability to exchange with other producers is limited by tariffs, and if the currency fruits of production are being devalued.
Economies are basic. As Henry Hazlitt put it, "what is harmful or disastrous to an individual must be equally harmful or disastrous to the collection of individuals that make up a nation." Apply the Hazlitt quote to taxes, regulations, tariffs, and currency devaluation, and you'll never again lose an economics debate or discussion.
What's a little dispiriting is that Milei knows all of the above, and more. Which is why it was so disappointing to read that Milei is hoping to use his relationship with Trump "to get billions of dollars in new financing from the International Monetary Fund." Surely Milei knows better?
Forget the IMF's hideous track record of advice. That's shooting fish in a crowded barrel. What's disappointing about Milei's hope for IMF support is that it tramples on the basic truth that a country doing as Argentina is said to be doing would never require an IMF loan in the first place. See the opening line of this opinion piece if you're confused. After that, look around you.
Individuals, businesses and countries that are doing the right thing don't need to worry about currying favor with anyone to get financing for anything. They don't simply because markets are brilliant, and markets reward the prudent.
No doubt more than a few libertarians and conservatives are making the odd claim at present that government borrowing automatically correlates with inflation (the insinuation suggests remarkable market stupidity), but the reality is that those operating in market-friendly fashion have the world lined up to buy their debt. In other words, Milei and Argentina don't need the IMF if they're doing as Milei says they're doing.
Explained more clearly, for Milei to seek IMF financing would be for the libertarian to not just do something very much at odds with his professed libertarianism, it would be for Milei to imply that the reforms he's overseeing aren't nearly as effective as his many fans believe, and that Milei implies.
Worse, and as is said over and over again here, there's no such thing as free money. The IMF is no different in that regard. In taking money from the IMF, Milei would be required to take the IMF's advice. No thanks.
Milei should instead believe in what he's doing. Freedom works. And if the Argentines are freed, Milei should proceed with certainty that his country not only would never need the IMF's money, but that it would never take it.