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The Axis Of Capitalism
We are about to see a market explosion in the Western world — if capitalism is re-embraced.
It looks as though this is about to happen. The reality is that in the United States, as in most Western countries, the debt levels are reaching the unsustainable — or have already surpassed the unsustainable. The amount of national debt currently carried by the United States is verging on $37 trillion. That means the interest we pay on the national debt will soon — if it has not already — exceed the defense budget every single year into the foreseeable future.
Most of that debt is driven by welfare programs, means-tested welfare programs, badly structured welfare programs, and entitlement programs such as Medicaid, Medicare, and Social Security. All of those programs are the systemic drivers of debt in the Western world.
There are only two possible solutions to this problem, and both have to be applied at once.
First: serious restructuring and cuts to spending programs in the United States.
Second: unleashing the power of the market to increase the size of the economy, because increasing the size of the pie means larger tax revenue intake and being able to afford more, on a governmental level.
The reason I call attention to this is because what we were set for under Joe Biden and his possible successors was a period of sustained economic stagnation in the United States — before inflation set in. Biden and his team put out a prospectus on what American GDP growth would look like over the course of the next decade, and they essentially forecasted it would come in at lower than 2% from here until as far as the eye can see. That is not enough growth to sustain the sort of spending programs the United States has been undertaking for decades.
At this point, something serious needs to change.
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A look back through history shows that, quite often, ideological precursors to shifts in the United States happen elsewhere. Possibly the most famous economic example occurred in the 1970s when Chile was run by a dictator named Augusto Pinochet.
Pinochet called in several supply-side economists from the so-called Chicago School of Economics called ”The Chicago Boys.” They were devotees of Milton Friedman, the libertarian economist, and advised Pinochet. Chile subsequently outsized rates of growth after private property rights were reestablished, tax rates were lowered, and a system of law was put in place that eventually led to the downfall of Pinochet himself and the rise of the democratic state in Chile.
Milton Friedman was later asked about what happened in Chile. He said:
The real miracle in Chile was not that those economic reforms worked so well. Chile is, by all odds, the best success story in Latin America today. The real miracle is not that those economic arrangements worked so well, because that’s what Adam Smith said. The real miracle is that a military junta was willing to let them do it. See, as I said to begin with, the principles of the military [are] from the top down; the principle of a market is from the bottom up. Now, it’s a real miracle that a military group was willing to let a bottom-up approach take over. … But I will say that that process led to a situation in which you were able to get [an] election which ended the military junta, and you now have a democratic government. You cannot cite any similar example from the world of entirely socialist states.
So what exactly happened in Chile? There were effectively three main pillars to what the Chicago boys did there. Economic liberalization, meaning fewer trade barriers; an easing of regulation; and an easier capacity to make economic arrangements. Privatization of state-owned companies, gigantic ownership of state-owned companies, was then devolved upon private citizens. And finally, stabilization of inflation took place, which meant a stop to spending money and printing money in order to keep up with inflation.
The same thing is currently happening in Argentina. Javier Milei has undertaken one of the greatest economic reform efforts in modern history — and it is absolutely working. He has brought inflation rates down from the insane to the manageable, and he has done this over the course of just a few months.
The Washington Post has reported on his efforts, writing:
Inflation is tumbling, just as he promised, from a peak of almost 300 percent; a long-running budget deficit has turned into a surplus; government bonds, once seen as almost certain to sink back into default, are rallying; and the long-moribund economy is finally starting to rebound,” Bloomberg News reported this month. “Not bad for an outsider with an agenda so radical that people were speculating openly a year ago on how many months he’d last before having to surrender power.
Milei himself has said, “What lies ahead in 2025 is more of what we’ve already done: strict fiscal balance, no money growth and deregulation. Argentina has suffered from an overdose of deficits, money-printing and useless regulations. All that needs to go.”
People on the Left are very upset because when this type of action is taken — if you throw people off the welfare dole, for example, because there’s too much spending on welfare or if you stabilize the currency — what that means quite often is that poverty rates in the very near-term increase. But then, they begin to decline radically, which is exactly what happened with Chile.
Milei remains incredibly popular in Argentina.
The success in Chile was the precursor to the economic revolution that spread across the Western world. The Chilean success was seen as a model by the Reagan administration; it’s why they pursued tax-cutting. It’s why they pursued deregulation and privatization of state-owned industries. The same occurred in Margaret Thatcher’s Britain.
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The lessons that Milei is pushing in Argentina are being applied to the rest of the Western world. That doesn’t mean President-elect Trump wouldn’t have pursued it in the absence of Milei. It does mean, however, a wave of economies are beginning to recognize the stagnating pseudo-socialistic policies that are pushed by so many members of the Left actually end in economic ruin for nations. That is now being disowned.
That’s why the business market is reacting so positively to President Trump’s election. We are witnessing a working model that has been applied in Argentina, where it was in crisis mode, succeeding. That means crisis efforts have to be undertaken here as well.
If those efforts are applied even on a medium scale in the United States, we are about to see a boom unlocked in the United States, unlike any in modern American history.
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