Argentine economic history is a cycle of broken promises, stability mirages and inevitable collapses. As a pendulum that oscillates between euphoria and despair, the country has once again traveled the path of financial overexposure, the dependence of speculative capital and the systematic denial of its own limits. The same errors, with the pampering proper names and justifications, have once again deployed surgical precision: An economy delivered to the logic of indebtedness without productive support, interest rates in destructive dollars and a national currency subject to contradictions: “Pray port prayer foam”, pray “dollarization” prays “currency competition”, prays “is not worth or excrement”, prays “the strongest coin in the world” (Javier Milei).
The lack of certainty, is the phase of knowledge where it is impossible to describe the situation, or predict a possible future result. In 2018 with Sturzenegger and Caputo we were in front of the Athens areoup, a place full of uncertainty and doubts. Again the eternal trilema had wrapped us: the free capital mobility, the fixed exchange rate and the autonomous monetary policy, had buried us. The misunderstanding decision was weighed, with external financing sources, appealing to a lower funding of the Bcra-Tanto in pesos such as in dollars-with forced indebtedness. The truth is that this situation of abundant income of foreign currency for loans to the National and Provincial Government (2016-2017), was accompanied by “Hot Money” and everything together by pressing the exchange rate down, appreciating the weight. In the face of the small capital market of Argentina, the private sector also placed debt in the international market. Attraction of external savings motivated by the high local interest rates, and an expectation of devaluation significantly lower than the inflation rate-what involved high interest rates in dollars-the capitals entered the country for the arbitration of portfolios also pressing the exchange rate to decrease the weight.
During the period from 2016 to 2018, Caputo and Sturzenegger played key roles in Argentina’s economic policy, implementing measures that, in retrospect, revealed infamous for the country’s financial stability. Alfonso Prat Gay, as Minister of Finance and Finance, promoted a exchange liberalization policy that favored capital escape and excessive indebtedness. Caputo, who occupied the Secretary of Finance and the Presidency of the BCRA, was involved in decisions that led to an uncontrolled expansion of external debt and a significant increase in interest rates, affecting investment and consumption. Sturzenegger, at the head of the BCRA, adopted a monetary strategy based on the “inflation goals methodology”, which resulted in a severe initial devaluation of the weight whose competitive advantage was consumed in just five months due to the increase in inflation, generating a context of phenomenal economic recession.
The intermission of entry and exit of these same officials repeatedly in charge of the economy and finance of the country from December 10, 2023 until February 20, 2025 raises serious questions about the government’s ability to learn from the mistakes of the past, evidencing that the decisions taken are not mere coincidences, but a management pattern that puts the economic stability of the country at risk.
Prat Gay, promoted a payment agreement with the creditors that was ruinednot only for its exorbitant cost, but also because “I lift the stock of increasing indebtedness”allowing expensive, excessive and extravagant indebtedness that aggravated the financial situation.
In summary, the incomplete period 2016-2018 represented one of the most critical stages of the recent economic history of Argentina, characterized by an artificial model based on external indebtedness and financial speculation. The rapid accumulation of liabilitieswithout a counterpart in productive investment, it led to a structural imbalance that It led to a exchange and fiscal crisis of magnitude. The strategy of financing the deficit through debt emissions to high rates, together with the artificial appreciation of the weight and the incentive to the carry trade, generated an unsustainable dependence on the flow of speculative capital, which, when reversing (Sudden stop, bald), triggered a stream of devastating consequences.
The Argentine case shows the dangers of an economic policy based on financial valorization without support in the real sector. The collapse of 2018 was not a fortuitous event, but the predictable result of erratic decisions and an irresponsible management of public accounts. The expansion of the LEBAC generated a quasi-alarming fiscal deficit, which reached 2.5% of GDP, and when the BCRA tried to correct the imbalance, capital escape and the depreciation of the weight accelerated, firing the inflation to 47.6% and plunging the country into a recession of (-2.5%).
Even more worrying is the repetition of these policies today. Since December 2023, the Government has once again implemented an extreme fiscal adjustment and financial liberalization that repeats the errors of that period. The combination of an unrestricted opening to the markets, a brutal contraction of public spending and a new wave of indebtedness is generating similar conditions that precipitated that crisis in 2018. History is not only repeated, but does it in an amplified way, with an even more severe impact on the productive and social fabric of the country.
The 2016-2018 experience is very recent, it should have served Javier Milei as an unavoidable warning of the dangers of indebtedness without strategic planning. However, current economic decisions suggest a course that, far from correcting errors from the past, deepens them. Persistence in an adjustment and deregulation model without productive development policies predicts an even more catastrophic outcome, with a financial and social collapse that becomes increasingly inevitable.
Argentine economic history seems to be condemned to repeat their failures when delivered to the dictates of financial valorization and uncontrolled indebtedness. The combination of functional interest rates to Carry Trade without productive support and an erratic monetary policy created the perfect storm that in 2018, inexorably, led the country to a new crisis. The collapse was not accidental, but the predictable result of a model that prioritized speculation about development and that, in its outcome, left an implementable debt tendal and an economy on the edge of the abyss.
The tragedy of that period is not only the damage it caused, but its brutal similarity with the path undertaken since December 2023. In an almost cynical repetition of history. As in 2016, the promises of stability and international confidence have resulted in a capital escape, drop in consumption and an explosive increase in poverty. The mirage of “financial modernization” created by Martínez de Hoz in 1977 (Financial Reform: RF/77, Law 21526) has revealed its true nature again: a machinery for the extraction of wealth and transfer of income to speculative sectors.
The routine of failures should have served as an unavoidable warning of the dangers of abandoning economic sovereignty in favor of dogmatic recipes that favor a few at the expense of the majority. However, the current government seems determined to bring that same scheme to its maximum expression, without measuring the consequences of social and financial implosion. As then, the outcome would be none other than an economy taken to the limit of its resistance, condemned to a new cycle of crisis, adjustment and social devastation.
With only 5 years of rest, the recurring experience of this financial version of the economy highlights the importance of designing economic policies that prioritize sustainable development, avoiding debt traps and financial speculation as central axes of the macroeconomic strategy.
The signs of the outcome are written in the memory of those who have already seen this story before. As a pre -established script, collapse is not an accident, but the logical consequence of an economy that is built on paper foundations. The dependence on external financing, the mirage of high interest rates as the only attraction for capitals, the impossibility of sustaining a model without support in the real sector: each of these pieces fits precisely in the puzzle of a new crisis. And when the bubble finally explodes, the model defenders will try to convince everyone that the problem was not the plan, but the lack of time to implement it.
But time is no longer a variable available. The decomposition is rapid, relentless, unavoidable. (1981, 1987, 2001, 2018) The logic of indebtedness without limits and uncontrolled liberalization have generated their own executioner. The regressive account has already begun. And when the last dollar of containment has evaporated, when the recession has finished the social fabric, the question will not be how we get here, but why, once again, we choose to ignore the signs of the disaster.
In history books, this chapter will be another written warning for “the caste” of those who always end up paying the crises: workers, small entrepreneurs, retirees, those who do not quote on Wall Street or move fortunes with one click. Because while the actors themselves repeat the same errors, the only certainty is that the end will always be the same. The country faces its destination once again. The difference is that this time, perhaps, it is too late for a redemption.
Director of Esperanza Foundation. https://fundacionesperanza.com.ar/ UBA postgraduate professor and masters in private universities. Master in International Economic Policy, Doctor of Political Science, Author of 6 Books
Source: Ambito
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