Javier Milei swept into Argentina’s presidency in late 2023 with a singular promise: to wield his now-iconic chainsaw against the country’s bloated government and runaway inflation. The self-styled libertarian, often seen brandishing an actual chainsaw at rallies, vowed to cut through decades of what he called socialist excess and economic mismanagement. But as the dust settles in October 2025, the reality of Milei’s radical reforms and their impact on everyday Argentines has become a subject of fierce debate—and growing disillusionment.
Upon taking office, Milei wasted no time slashing government spending. According to multiple reports, including coverage by From The Barrel and analysis by Michael Roberts, he axed some 70,000 public sector jobs and targeted entire government departments, especially those dedicated to social services. The move, cheered by Argentina’s business elite and international investors, was part of his broader “chainsaw economics” agenda. Milei’s supporters, including the middle class and entrepreneurial sectors, believed this tough medicine was necessary to cure Argentina’s chronic economic woes.
Yet, the pain was swift and deep. As From The Barrel notes, the working class bore the brunt of the cuts, facing job losses, shuttered businesses, and a scramble for informal work. The government’s budget did move toward balance, as highlighted by Roberts, but the social safety net frayed. Soup kitchens—once a lifeline for many—were defunded amid accusations of corruption, and families across the country began skipping meals. A study in Córdoba revealed that by August 2025, 58% of families couldn’t afford the basic food basket, and half admitted to skipping dinner.
International observers initially lauded Milei’s approach. The IMF, whose chief Kristalina Georgieva sported a Milei chainsaw pin at a press conference, urged Argentinians “to stay the course” and support Milei in the October 2025 legislative elections. The OECD chimed in, declaring that “reforms have started to bear fruit, and the economy is set for a strong recovery.” Inflation, long the bane of Argentina, did fall to levels “not seen in years,” and the official poverty rate dropped to 31.6% in the first half of 2025.
But those numbers only told part of the story. The poverty rate, critics argued, was based on an outdated basket of goods that didn’t reflect the true cost of living. When adjusted, the figures could be far worse. Multidimensional poverty—factoring in income and access to essentials—actually increased year over year, with 25-40% of Argentine families in deep poverty. Children suffered disproportionately: two-thirds of those under 14 lived in poverty, and community kitchens became a necessity for 41% of families nationwide, soaring to 60% in some neighborhoods.
As the government wielded its fiscal chainsaw, cracks began to show elsewhere. Only 27% of homes were on paved streets, and nearly half relied on dirt roads. Formal water and power connections were out of reach for many, and environmental risks rose as garbage piled up and pests spread. Inequality, meanwhile, hit new heights. The top 10% of earners now made 23 times what the poorest decile earned—up from 19 times the previous year—and the Gini index soared to a record 0.47.
Despite the hardship, optimism briefly surged in financial markets. The Milei government, propped up by record IMF bailout funds, held the peso artificially high against the dollar to fight inflation. Foreign investors and agencies like the IMF and OECD praised the free-market reforms as a much-needed alternative to Argentina’s so-called “pink socialism.” But beneath the surface, trouble brewed. The strong peso made exports uncompetitive, and the current account deficit widened as imports rose and export income flowed out of the country. Capital flight accelerated: in 2024 alone, outbound investments by Argentines totaled $3.3 billion, with another $2.6 billion leaving in 2025.
Then came the political backlash. In the crucial October 2025 provincial elections in Buenos Aires—the country’s largest region—Milei’s party suffered a crushing defeat, losing by 14 points and ceding six out of eight jurisdictions to the opposition Peronists. The loss was especially stinging in districts Milei’s party hadn’t lost in two decades. The electorate, it seemed, was not as enamored with “anarco-capitalism” as the international financial community. Scandals didn’t help: Milei’s sister, Karina, dubbed “the Boss” and appointed General Secretary of the Presidency, was alleged to have taken bribes, further souring public opinion.
The economic unraveling accelerated. By late September 2025, as reported by From The Barrel, Argentina lost $1.1 billion in foreign reserves in just 72 hours, with 90% of the peso in free fall. The government and central bank scrambled to use what little was left to prop up the currency, but with only $30 billion in reserves and looming debt payments—$44 billion due by the end of Milei’s term in 2027—the situation grew dire. Argentina remained the largest debtor to the IMF, owing $57 billion, or 46% of the fund’s total credit outstanding.
In a dramatic intervention, U.S. Treasury Secretary Scott Bessent, acting under the Trump administration, offered a $20 billion swap line to stabilize Argentina’s foreign exchange and bond markets. The rescue package, though, came with strings attached. As From The Barrel pointed out, the deal positioned Argentina to become the largest supplier of soybeans to China, replacing U.S. farmers who had not exported a single bushel by May 2025. It also ensured continued operations for Chevron in the Vaca Muerta shale basin, which transformed Argentina into Latin America’s fourth-largest oil producer. The swap, then, was as much about geopolitics and energy security as it was about economic rescue.
Yet, even as the Trump administration pledged to “bridge” Milei to the next election and not let market turmoil derail his reforms, the fundamental problems remained. The peso, analysts warned, needed to fall by 30% to restore competitiveness and rebuild reserves, but such a devaluation would almost certainly reignite inflation. Investment languished at historic lows—averaging just 15.9% of GDP from mid-2024 to mid-2025—and real GDP growth, even if it reached the IMF’s forecasted 5.5% for 2025, would only return per capita output to 2021 levels, still well below the country’s 2011 peak.
Argentina’s long-term challenge, as economist Rolando Astarita and others have noted, is a lack of productivity and technological investment. Outside of natural resource sectors like oil and soybeans, the country lags behind international standards. Decades of IMF loans, right-wing and Peronist governments alike, failed to stem capital flight or build a sustainable, competitive economy. As the next round of debt payments looms and the political winds shift, Argentines are left to wonder: has the chainsaw cut too deep?
Whatever the verdict on Milei’s presidency, one thing is clear: the country’s economic and social fabric is more frayed than ever, and the search for a lasting solution continues.
