Odd Lots Why Argentina Needs Bailout After Bailout After Bailout
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Oct 15, 2025 Greg Makoff, an expert on Argentina’s intricate debt history and author of 'Default,' dives deep into the nation's recurring bailouts, including the latest $40 billion support deal from the U.S. He discusses why Argentina struggles with sustainability, highlighting political overspending and the influence of Peronism. Makoff also examines Javier Milei's austerity measures and the challenges of implementing reforms. He provides insight into the implications of Argentina's economic strategies and the role of external funding, all while predicting the potential for lasting change.
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Chronic Overspending And Failed Reform
- Argentina's core problem is chronic overspending combined with political division that prevents durable reform.
- Unlike peers, it repeatedly fails to embed stabilization measures and returns to boom-bust cycles.
Peronism As A Political Machine
- Peronism is a shapeshifting political machine rooted in labor and nationalism that controls cash and patronage.
- Different Peronist flavors (e.g., Kirchnerism) explain why reform efforts periodically reverse.
Cash Handouts Build Political Loyalty
- Makoff describes cash handouts routed through party operatives during crises, creating dependency on the party.
- People often attend rallies because their benefits arrive under the party's banner and photo of the governor.
