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The obscure pool of money the US used to bail out Argentina

November 15, 2025 • 29m

Summary

⏱️ 8 min read

Overview

Planet Money examines Treasury Secretary Scott Bessent's controversial decision to offer Argentina a $20 billion credit line from the Exchange Stabilization Fund during a government shutdown. The episode explores the fund's 90-year history, compares this bailout to the 1995 Mexico crisis, and evaluates whether the U.S. will see its money again, given Argentina's nine defaults and President Javier Milei's economic experiment.

The $20 Billion Surprise During a Shutdown

During a month-and-a-half government shutdown that left hundreds of thousands of federal workers furloughed and flights canceled, Treasury Secretary Scott Bessent announced the U.S. would provide $20 billion to Argentina. This amount could have funded half of USAID's annual budget or a full year of FBI, DEA, ATF, and Federal Marshal Service operations combined. Bessent made this decision unilaterally using an obscure 90-year-old Treasury slush fund called the Exchange Stabilization Fund, requiring no congressional approval.

  • The government shutdown lasted about a month and a half with hundreds of thousands furloughed
  • Treasury Secretary Bessent announced $20 billion for Argentina despite federal spending being paused
  • The Exchange Stabilization Fund allows Treasury to act without congressional input
  • $20 billion would pay for half of USAID's annual budget or a full year of FBI, DEA, ATF, and Federal Marshal Service
" Bold move, Mr. Treasury Secretary. Bold move. "

Argentina's Troubled Economic History and Milei's Experiment

Argentina has defaulted on its debts nine different times and currently owes the IMF more than $50 billion—six times more than the next closest country. President Javier Milei, a self-described anarcho-capitalist with Wolverine-style sideburns who brandishes a chainsaw at rallies, has been slashing government spending. Under his leadership, Argentina achieved its first balanced budget in 14 years and reduced inflation from nearly 300% to about 30% annually, though his approach remains controversial and unproven.

  • Milei is an economist who describes himself as an anarcho-capitalist with distinctive sideburns
  • Argentina has defaulted nine different times on its debts
  • Argentina owes the IMF over $50 billion, more than six times the next closest country
  • For the first time in 14 years, Argentina has a balanced budget under Milei
  • Inflation dropped from almost 300% annually to closer to 30%
" Malay is very willing to cut public spending. That's his political superpower. "
" The rap on Argentina is that it borrows a lot of money and it never repays. "
" We don't usually have to give bailouts to countries that are models and beacons. "

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