By Mila Zurbriggen – Political Analyst
A model that confuses stability with submission
The failure of the $20 billion loan with the United States was not a diplomatic accident or a financial misunderstanding: it was the confirmation of a economic model built on an illusion.
The government of Javier Milei bet that extreme fiscal discipline and pro-market rhetoric would be enough to attract external financing and restore global confidence.
But the international economy does not respond to ideological slogans: it responds to solid macroeconomic fundamentals, institutional predictability, and sustainable development policies.
The problem was not that the United States said "no"; the problem is that Argentina believed that ideological submission would suffice for a "yes".
The loan that vanished: the naivety of automatic alignment
The attempt to obtain extraordinary credit from Washington was presented as the great strategic play: an alternative to the IMF and a gesture of trust from the West towards the new Argentine economic order.
None of that happened.
In reality, the U.S. Treasury never had the real intention of releasing those funds.
The negotiations dragged on, conditions tightened, and finally, support evaporated when Argentine political risk became undeniable.
The mistake was to believe that geopolitics works like the financial market: that ideological affinity automatically translates into capital flow.
The United States does not lend out of doctrinal sympathy; it lends out of strategic convenience.
And a country in recession, with structural imbalances and no regional power, is not a partner; it is a cost.
A laboratory economy: the fetish of fiscal balance
The official economic program is presented as a moral refoundation of the Argentine economy, but in reality, it is a technocratic architecture without productive or social anchorage.
The government celebrates a primary surplus that, according to data from the Ministry of Economy itself, is largely explained by:
postponement of payments to suppliers,
erosion of pensions and real wages,
and paralysis of public works.
That is: an accounting balance at the cost of economic collapse.
While GDP contracts more than 2% year-on-year and consumption falls across all sectors, the "fiscal order" rests on an economy that dims to balance the numbers.
There is no genuine surplus without growth, and there is no possible growth in an environment of induced recession and absolute monetary restriction.
The controlled dollar: a paper orthodoxy
One of the government's discursive pillars is exchange rate freedom.
However, real policy contradicts that dogma: the Central Bank maintains the official exchange rate artificially low to anchor inflation expectations.
This constant intervention —with reserve sales and covert controls— reproduces the same scheme that the previous administration claimed to combat.
The dollar is "suppressed," creating three distortions:
exchange rate lag,
loss of export competitiveness,
growing gap with financial dollars.
Every cheap dollar is a promise of future crisis.
The exchange rate lag is the anesthesia that precedes devaluation.
Argentinian history has shown this: no government can sustain a frozen exchange rate without real reserve backing.
Bilaterals: from ideological affinity to economic isolation
The automatic alignment with Washington brought more costs than benefits.
In the name of "Western freedom," Argentina weakened its ties with China and Brazil, its two main trading partners, and isolated itself from regional cooperation mechanisms (Mercosur, CAF, BRICS).
Meanwhile, the promised flow of U.S. investments never arrived.
The government confused foreign policy with ideological marketing: it believed that closeness to Trumpism was a guarantee of prosperity, when in reality, it was a trap of dependency.
The United States respects countries that negotiate on terms of strength, not those that beg for credit.
The result is an Argentina without solid allies, without regional credit, and without a Plan B.
The underlying mistake: financialization without production
The current Argentinian economic plan reproduces an old scheme of peripheral financialization:
attracting short-term capital, offering peso interest rates tied to the dollar, and using those flows to artificially sustain the currency and current spending.
It is the logic of the financial bicycle: money comes in seeking quick profit and exits as soon as it smells risk.
It does not generate employment, does not promote exports, does not strengthen the productive structure.
It only fuels volatility.
Structurally, this amounts to replacing industrial policy with financial engineering.
A country cannot stabilize with swaps and bonds; it stabilizes with export diversification, productivity, and accumulation of genuine reserves.
An absent state and an exhausted society
While trying to please investors, the real economy bleeds dry.
Monthly inflation drops due to contraction, not due to ordering relative prices.
Formal employment declines, purchasing power collapses, and poverty now surpasses 50%, bringing us closer each day to what could end in a social explosion.
The model denies political economy: believing that adjustments can be made without social consequences is a technocratic fiction.
The state cannot withdraw from public investment, productive credit, or macroeconomic arbitration.
If the state disappears, the market does not emerge; the anarchy of prices emerges.
Conclusion: sovereignty or mirage
The failure of the loan with the United States is not an anecdote: it is a mirror.
It reflects the inconsistency of a model that seeks national independence while kneeling before international speculation.
It reflects a government that preaches market freedom while intervening in the exchange rate to disguise stability.
And it reflects, above all, a country that continues to believe that foreign credit can replace its own development.
Argentina does not need external obedience; it needs internal intelligence.
It does not need libertarian discourses; it needs serious institutions and a real economy that produces, exports, and sustains its currency.
As long as the economic plan continues to respond to the whims of the markets and not to the needs of the nation, the future will not be liberal or popular: it will be simply unsustainable.
✍️ By Mila Zurbriggen
Political Analyst
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