Javier Milei came to power with a promise to take a chainsaw to Argentina’s bloated state. Two years later, markets are thrilled by the numbers—but Argentines are exhausted by the cost. Shuttered workshops, pricier buses, and shrinking paychecks define a country holding its breath ahead of midterms, where patience may finally run out.
Chainsaw Symbolism, Shock-Therapy Reality
The image is burned into Argentina’s memory: Milei, in a leather jacket, hoisting a roaring chainsaw above his head at a rally in San Martín, surrounded by flags and cellphones. “No pruning shears for la casta,” he told the crowd. Argentina, he said, needed to be amputated.
When he took office, inflation had reached a rate of over 200%. Nearly half the country was poor. Printing pesos had become a survival policy. Milei’s solution was radical surgery: slash subsidies, cut ministries in half, lift price controls, and let the peso crash. The results were immediate—and brutal.
The macro headlines gleamed: Argentina recorded its first fiscal surplus in fourteen years; inflation slowed to the mid-30s; and the currency stabilized, helped by a U.S.-backed swap with the IMF. Donald Trump called him “my favorite president”; British conservatives called him a “template.” Investors cheered.
But behind those headlines, the noise of chainsaws has given way to a hum of discontent. Protests in Buenos Aires are growing louder, and the tear gas is becoming more frequent. What Milei once framed as discipline looks, to many Argentines, like punishment. “He said the elite would pay,” said Luciano Galfione, head of the textile foundation Pro Tejer, speaking to the BBC. “But it’s the workers who are paying now.”
The question is whether voters—tired, broke, and angry—will continue to believe in the cure long enough to see results.
Macro Victories, Micro Losses
Supporters of Milei’s “shock therapy” say the pain is necessary. “The demand for public spending was brutal,” economist Ramiro Castiñeira told the BBC. “Argentines tolerated inflation because it hid our addiction to deficits. That’s over now.”
For markets, the logic is persuasive. Restored fiscal balance builds credibility. But on the ground, that logic collapses into hunger and joblessness.
In Misiones, third-generation yerba mate farmer Ygor Sobol described a business unraveling after the government scrapped minimum prices. “We’re all going backwards economically,” he told the BBC. “I had to close the payroll. Now I have no employees.” Without workers, fields overgrow. Without subsidies, fertilizer costs crush margins.
The textile industry tells a similar story. Imports have surged, but Galfione says they’re competing unfairly: “Opening the floodgates without leveling environmental and labor standards is an unequal game.” As utilities, tuition, and medical bills rise, consumption falls—a death spiral for small businesses.
Economist and Senate candidate Mercedes D’Alessandro told the BBC that Milei’s cuts “were sold as an attack on the political caste but landed on pensioners and public hospitals.” An independent economist, Alan Cibils, warned that the apparent fiscal health “rests on spending reserves to prop the peso.” If Argentina cannot roll over or repay next year’s debts, he said, “the success will evaporate.“
Milei’s team insists that relief will come—but not yet. The first rule of chainsaw economics, they argue, is that you bleed before you heal. “The bitter medicine is temporary,” Milei said recently. For many Argentines, the bitterness feels permanent.
Politics, Markets, and the Paradox of ‘Success’
Milei’s most significant risk is political, not economic. Markets love his ruthlessness—until they fear he might lose his mandate. After his party’s crushing provincial defeat in Buenos Aires, investors fled Argentine bonds. Rocks struck the president’s convoy.
“He shields himself from empathy,” said Martín Rapetti, director of the Equilibria think tank, speaking to the BBC. “That solitary posture limits his ability to build coalitions. You can’t chainsaw your way to consensus.”
His foreign admirers see something else: courage. His office reportedly displays coasters with Margaret Thatcher’s face, a provocation in a country still haunted by the Falklands War. Abroad, that defiance plays as conviction; at home, it sounds like an insult.
Even markets, those cold arbiters of discipline, are growing jumpy. Investors don’t vote—but they read elections as referendums on austerity. If Milei’s midterm results weaken his grip on Congress, the markets that praised his “iron will” could turn on him overnight.
“The U.S. swap may stabilize the peso, but it won’t rebuild schools or roads,” D’Alessandro told the BBC. “People are starting to ask: stability for whom?” The administration’s bet is that credibility will trickle down. If inflation continues to fall, they say, consumption will follow. However, Argentina’s history is littered with experiments that ran out of public patience before they reached their conclusion.
EFE/ Juan Ignacio Roncoroni
A Verdict That Could Rewrite the Experiment
Midterms will decide more than seats; they will determine whether Argentina’s experiment survives. If Milei’s coalition expands, markets will read it as proof that austerity can win elections. If it shrinks, investors may conclude that the opposite is true—that no reform can outlast Argentina’s politics.
The stakes are existential. A loss would mean governing by veto, a weakened president clashing with provinces and unions. A win would embolden further cuts and privatizations. Either way, Argentines will vote with their stomachs.
For many, Milei embodies both their hope and their fear: hope that someone finally dared to break a cycle, fear that he’s breaking the country instead. “We’re in the middle of his term,” said Rapetti to the BBC. “It’s too early to judge—but the clock is ticking.“
The irony is that Milei’s fate depends on what no market model can predict: patience. He has made Argentina’s pain visible, measurable, almost statistical. But hunger and fatigue don’t appear in GDP graphs. They show up on ballots.
If Milei tames inflation and keeps it under control, he will have achieved what few Argentine presidents have. If not, his chainsaw will be remembered less as an instrument of reform and more as a warning—that in the rush to amputate, the country risked cutting into its own bone.
Also Read: Trump Rewrites Latin America’s Balancing Act Between Washington and Beijing
For now, the roar of protests competes with the hum of recovery. Argentina stands suspended between the two sounds, uncertain which will define its future.