In today’s issue:

  • What if we’re wrong about our political presumptions?
  • What if Javier Milei and Elon Musk succeed?
  • Who is the UK’s Javier Milei?


As you know, the only thing that can save Western governments from a major debt crisis is dramatic spending cuts. But those are politically impossible… right?

Well, they might be impossible to imagine. Especially for an electorate so used to the opposite.

But let’s look at the numbers…

With more than half the country receiving more from the government than they pay in tax, how could we possibly turn the ship around now?

And have you seen the demographic challenge we face? How many pensioners will vote for less income in retirement after a lifetime of either paying into the system or living off welfare to begin with?

Then there’s the accumulated debt we already owe. The country is too far gone for a balanced budget, let alone the surpluses needed.

The NHS is a holy cow. And the civil service run the country even if we elect the right politician.

No cuts, no way, no how.

No, our future is simple. We need some combination of higher taxes and more inflation to keep the government from going broke.

After all, a fiscal crisis would take the pension system and banking system with it if we don’t cough up the money. And that really would be a disaster.

But what if we’re wrong about our political presumptions?

As Herb Stein at the American Enterprise Institute explained, “If something cannot go on forever, it will stop.” The only question is how and when.

Of course the inflationary path can go on for a rather long time. But even Argentina’s electorate eventually decided they’ve had enough of that. They elected a fellow to cut inflation. How? By cutting government spending with a chainsaw – almost literally, too.

I’ve now met five people who knew Milei before he became president. One of my contacts is even responsible for the sudden political twist in his economist career.

All five have confirmed to me that Milei is the real deal. And that he just might succeed in rescuing Argentina from decades of inflationary fiscal chaos.

To be honest, I was sceptical when Milei was elected. It’s like hearing Santa Claus showed up at someone else’s Christmas party. You don’t quite know what to think of the person telling you the story, let alone whether it’s true.

But, having been drafted in as a Santa at a children’s playground in Japan during the pandemic, I’m aware such surprises really do happen. So, is it time to believe the world has found a free market hero?

Perhaps even a symbolic success story that changes the world, like Thatcher and Reagan did? Could Milei inspire similar radical changes elsewhere?

In the US, perhaps?

President elect Trump looks set to let Elon Musk loose on the government with a chainsaw. His language about cutting government departments is familiar to Milei watchers. Let’s hope it works better than draining the swamp did in 2016…

Musk got rid of rather a lot of employees at X. Apart from renaming it from Twitter, the experience has improved. The constant censorship of the accounts I follow has ended. As has the constant reporting of imitation accounts.

What if Elon can do the same over at the US government?

In other words…

What if Milei and Musk succeed?

So far, things are going very well in Argentina. Milei is coming under criticism after doing something truly radical. He actually implemented the very policies he was elected for!

Shocking and very confusing, I know.

You can sense the media’s discombobulation. How are they going to criticise the guy? He’s only doing what voters asked him to… which was supposed to be impossible…

Part of Milei’s promise was to cut government spending. And not in the way Western politicians do. He isn’t lowering the pace of spending increases in ten years’ time, or some other obfuscation. He’s cutting outright, chainsaw style.

This is crucial because it’s government spending that actually matters to the prosperity of a country… or lack of it. Spending is what went wrong in Argentina. And it’s what’s going wrong in Europe and the US today.

Sure, politicians will wail about a lack of taxes when their deficits blow out. And they claim raising taxes is always the solution to a deficit. On the rare occasion it’s even acknowledged, that is. Actually cutting spending isn’t even an option.

But all government spending must be financed somehow. That’s why we have to tax in the first place. So, spending is by definition the key metric. The one that politicians should be focusing on. Taxes are just the consequences.

There is another option — inflation. Why tax people when you can just create the money that government spends?

Well, the last three years exposed why. Inflation makes politicians very unpopular.


If people ever realise the inflation is a deliberate policy by government to devalue its debt, they’ll begin to get outright angry. They might even vote in the likes of Javier Milei or Donald Trump – the sort of people who blames politicians for inflation.

For now, few voters are aware that all economists agree on one thing: inflation is taxation without legislation. If they realise, their voting behaviour could change radically. And nothing will help them realise faster than more inflation, having to pay a higher tax bracket and statisticians telling them everything is rosy.

Well it ain’t.

In fact, it hardly matters how much you tax. You can only delay the reckoning with a few more years of tax misery. Government spending dominates the issue.

Just take a look at these charts from the UK’s Office for Budget Responsibility and the US’ Heritage Foundation. They show spending spiralling out of control while taxes languish in the UK and US, long term.

No amount of taxation can cover that parabolic rise in spending. And the amount of inflation it’d take is terrifying.

Only cutting spending radically can bring this back under control. You can fiddle with taxes and inflation all you like.

The only question is, how bad to things have to get first. How high does inflation have to go? As bad as in Argentina? How high do taxes have to go?

Or, perhaps the right question is how long can voters try to pretend this can go on forever?

Let’s hope they wake up in time. And find a Javier Milei in the UK. Or else…

I’ve never been to the U-S-A
I am a slave for the minimal wage
Detroit, New York and L-A
But I’m stuck in the U-K

– “Who Said” by Planet Funk

Until next time,

Nick Hubble
Editor, Fortune & Freedom