A century ago, Argentina was one of the richest countries in the world. Then the Great Depression hit, the bubble popped, and before you could say “Eva Peron” it spiraled into a failing welfare state. Now President Javier Milei has slashed government spending and reduced regulation. Inflation is falling, and GDP is rising. Can President Trump’s DOGE do the same?

Take inflation. Only in Argentina could a 70 per cent annual inflation rate look like an improvement. When President Milei took office in December 2023, inflation was running at over 200 per cent, and it peaked at almost 300 per cent in April 2024, before starting its decline. On a month-over-month basis, inflation was only 2.4 per cent in February 2025.

Unemployment has declined from double digits in 2021 to 6 per cent, and GDP growth turned positive in the second half of 2024, rising by 2.5 per cent, driven by agriculture, energy, and manufacturing. The rebound is widely expected to strengthen further.

Before President Milei took office, foreign investment was hindered by economic uncertainty and high inflation. Since 2024, the investment climate has improved, and the Ministry of Deregulation and State Transformation is charged with slashing red tape, promoting privatization, and the abolition and consolidation of some government departments. A 30 per cent cut in government spending (36 per cent in social services) has led to a budget surplus of almost 2 per cent of GDP.

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President Milei still has to dismantle Argentina’s complicated system of capital controls, which limit the amounts that can be brought in and taken out of the country and require money to be exchanged at certain fixed exchange rates. He has promised to eliminate these capital controls by 2026. But the success of his economic reforms thus far can hardly be questioned. They highlight the importance of structural changes, fiscal discipline and reducing burdens—as well as the potentially enormous gains from getting it right.

President Trump, of course, did not inherit quite the same set of circumstances, but he faces many of the same challenges as President Milei. And his creation of the Department of Government Efficiency (DOGE) under Elon Musk has striking parallels with the model adopted in Argentina (Musk was even given a “bureaucracy chainsaw” by President Milei earlier this year).

DOGE has rapidly made headlines by reducing the size of the federal government workforce and identifying mismanagement in federal departments. At the U.S. Agency for International Development, it found that funds intended for poverty reduction were used for other purposes, or siphoned off to contractors. At the Defense Department, the Internal Revenue Service, and the Department of Veterans Affairs, among others, it has discovered myriad ways in which taxpayer funds were not always used in the most efficient ways.

DOGE spearheaded the move to sack about 25,000 recently hired federal workers who still have probationary status. While last-hired, first-fired is not an efficient strategy because it ignores merit, DOGE targeted employees on probation because excessive rules surrounding tenured federal employees and federal unions’ injurious tactics make it nearly impossible to implement performance-based lay-offs.

Courts have ruled that mass redundancies of probationary federal workers are illegal, and that the federal agencies must rehire the employees. The matter is still working its way up from district courts to appeals courts, and may reach the Supreme Court.

That does not negate the progress that has already been made in little more than two months, however. President Trump has eliminated USAid and moved some remaining functions under the Department of State. He is planning to dismantle the Department of Education, which spends only 10 per cent of its budget on education. These funds will be returned to individual states, who can determine their best educational use. The president’s deregulatory initiatives will spur economic growth.

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But to trim America’s $2 trillion annual deficit and chip away at its $36 trillion national debt, reducing the growth rate of entitlements—payments to people for pensions, healthcare, and food—is key. These entitlements make up 51 per cent of government spending, $3.4 trillion in 2024, and reducing their growth rate is up to Congress, not DOGE.

Entitlement spending rises faster than inflation. Levels of Social Security benefits, the main pension program, for instance, are set in accordance with income levels of the working population, which rise faster than inflation. Meanwhile, the costs of Medicare, the program for retirees, and Medicaid, the program for poor people, increase when new medicines and technology become available.

The Social Security Trust Fund has enough to pay benefits until 2033, and then will only be able to pay 79 per cent of what has been promised. The Hospital Insurance Trust Fund for Medicare, the program for retirees, has enough funds until 2036, but then will be able to pay 90 per cent of benefits.

Congress does not yet have the willpower to slow the growth of these politically popular programs, and President Trump said that he would not touch them. But attempting to maintain their out-of-control growth will require substantial tax increases on middle-class families.

It may be easier for Argentina’s Ministry of Deregulation and State Transformation to cut a third of government spending than for America’s Department of Government Efficiency to slow the growth of entitlement programs. So we no longer have to cry for Argentina. But America is crying out for still more cost-cutting, deregulation and a smaller, more efficient government.