Argentina's Melt Down Offers A Global Warning

Argentina’s meltdown offers a global warning By Alexander Clark, 21 hours ago Argentina’s economic unraveling is not just a local tragedy, it is a live stress test of what happens when chronic fiscal excess, political fragmentation, and social exhaustion collide. I see in Argentina’s turmoil a warning for other democracies that are flirting with similar pressures, from unsustainable debt and inflation to populist backlashes against traditional parties. The country’s latest crisis, and the radical response it has produced, shows how quickly a middle-income democracy can slide from gradual decline into systemic shock. The choices Argentina is making now, and the pain its citizens are absorbing, offer a stark preview of what can await any society that postpones hard decisions until markets and voters both lose patience. Argentina’s long slide into crisis Argentina did not wake up one morning in meltdown; it arrived there after decades of stop‑start reforms, repeated debt blowups, and a political culture that treated inflation as a lesser evil than fiscal restraint. I read the current turmoil as the culmination of a long pattern in which governments financed expansive social promises and subsidies with money creation and borrowing, only to see inflation and currency collapse wipe out those gains. That cycle eroded trust in institutions and in the national currency itself, leaving households and firms constantly braced for the next shock. Reporting on Argentina’s recent history describes how successive administrations leaned on capital controls, price freezes, and multiple exchange rates to mask underlying imbalances rather than resolve them, a strategy that eventually drove inflation into triple digits and pushed poverty sharply higher. Analysts trace the latest crisis to a combination of chronic fiscal deficits, heavy reliance on central bank financing, and a loss of access to affordable external credit, all of which fed a downward spiral in the peso and forced the government into repeated negotiations with the International Monetary Fund over its sovereign debt and financing program. By the time voters turned to a radical outsider promising shock therapy, Argentina had already burned through much of the policy space that more gradual reform would have required. Milei’s shock therapy and its domestic fallout The election of Javier Milei, a libertarian economist who campaigned on chainsaw‑style cuts to the state, reflects how deeply Argentine voters had come to distrust the existing political class. I see his rise as a symptom of institutional fatigue: when mainstream parties fail to stabilize living standards, electorates become more willing to gamble on leaders who promise to rip up the old playbook. Milei’s program of rapid fiscal consolidation, deregulation, and a drastic reduction of subsidies is designed to break the inflationary dynamic, but it also concentrates economic pain in a short window, testing social cohesion. Accounts of Milei’s early months in office describe sweeping reductions in public spending, including cuts to energy and transport subsidies, sharp devaluations of the official exchange rate, and efforts to dismantle long‑standing price controls and labor regulations. These measures have been paired with an aggressive rhetorical campaign against what he calls the “caste” of entrenched political and union elites, a framing that has energized his base while alarming opponents who fear democratic norms could be weakened. As inflation initially surged in response to the devaluation and subsidy removal before showing signs of easing, Argentines faced rising utility bills, falling real wages, and a spike in social tension, with unions and social movements organizing large protests against the government’s austerity drive. The social cost of delayed adjustment What stands out to me in Argentina’s current ordeal is not only the severity of the adjustment, but how much of it reflects choices deferred rather than choices newly invented. When governments postpone structural reforms, the eventual correction tends to be harsher, because the economy has accumulated more distortions and the public has fewer buffers left. Argentina’s high poverty rate, fragile labor market, and frayed public services meant that when the latest round of cuts arrived, they landed on a society already stretched thin. Reports from the ground describe how inflation had already eroded real incomes for years, pushing a significant share of the population into informal work and leaving many families dependent on state transfers and subsidized services. As those supports are reduced or restructured, households face a double squeeze of higher prices and weaker safety nets, with food insecurity and social unrest becoming more visible in major cities. Economists who have tracked Argentina’s repeated crises note that earlier, more measured reforms to pensions, subsidies, and tax policy could have spread the burden over time, whereas today’s compressed shock is forcing abrupt changes in everything from public sector employment to energy pricing. The lesson is not that adjustment can be avoided, but that delaying it often shifts the cost onto those least able to absorb it. Why Argentina’s turmoil matters beyond its borders Argentina’s predicament resonates far beyond the Southern Cone because many other democracies are drifting toward similar fault lines, even if their starting conditions differ. I see three common threads: rising public debt, persistent inflation or its risk, and a widening gap between what voters expect from the state and what tax bases can sustainably fund. When those pressures build, the temptation to rely on financial repression, creative accounting, or central bank balance sheets grows, and with it the risk of a sudden loss of confidence that forces a rapid and painful correction. International institutions have warned that several emerging and advanced economies are carrying debt loads that leave them vulnerable to shifts in global interest rates and investor sentiment, particularly where fiscal deficits remain large and growth is weak. Analysts point to Argentina as a cautionary case of how repeated restructurings and reliance on official lenders can narrow policy options, especially when domestic politics make tax increases or spending cuts difficult to sustain. The country’s experience with capital controls, exchange‑rate gaps, and inflationary financing offers a concrete example of how efforts to shield citizens from short‑term pain can, over time, deepen the eventual crisis and undermine trust in both the currency and the broader economic model. What other democracies can learn For policymakers watching from abroad, Argentina’s meltdown is less an outlier than an extreme version of trends that are visible in milder form elsewhere. I draw two main lessons. First, credible medium‑term fiscal plans matter, not as technocratic ornaments but as anchors for public expectations and market confidence. Second, institutions that can resist short‑term political pressure, from independent central banks to professional civil services, are essential to prevent gradual slippage into crisis. Where those anchors weaken, the space opens for more radical figures to promise quick fixes that often require even more painful trade‑offs. Comparative research on fiscal crises shows that countries which move early to stabilize debt, broaden their tax base, and target subsidies more precisely tend to avoid the kind of runaway inflation and currency collapse that Argentina has endured. Analysts who track sovereign risk argue that transparent budgeting, realistic growth assumptions, and clear communication about the distribution of adjustment costs can reduce the likelihood of sudden stops in capital flows and the political backlash that follows. Argentina’s current turmoil, with its mix of harsh austerity, social protest, and institutional strain, illustrates what can happen when those safeguards erode and hard choices are forced into a compressed and volatile period, offering a stark reference point for any democracy tempted to treat fiscal and monetary discipline as problems that can always be solved later. More From TheDailyOverview Tennessee loses $2.6B megafactory and faces major layoffs Retired But Want To Work? Try These 18 Jobs for Seniors That Pay Weekly What to do with your pennies after the U.S. stops minting them Home Depot CEO warns of a troubling customer trend in stores 19

Covert Action In Chile: The Significance Of The Church Report 50 Years Later

Covert Action in Chile: The Significance of the Church Committee Report 50 Years Later Church and Kissinger collage Special Senate Report and Public Hearing Exposed CIA Regime Change Operations; Initiated Needed Debate Over Role of Covert Operations in a Democracy Archive Posts White House Documents on Ford Administration Efforts to Block Revelations of CIA Covert Operations in Chile Published: Dec 4, 2025 Briefing Book # 911 Edited by Peter Kornbluh For more information, contact: 202-994-7000 or peter.kornbluh@gmail.com Subjects Covert Action Intelligence and Espionage Political Crimes and Abuse of Power Secrecy and FOIA Project Intelligence Frank Church U.S. Senator Frank Church, Democrat from Idaho, led the Senate committee that investigated CIA assassination plots and covert operations. Karl Inderfuth Karl F. Inderfurth, a lead investigator and drafter of the Committee case study on Chile. Gregory Treverton Gregory Treverton, a lead investigator and drafter of the Committee case study on Chile. Washington D.C. December 4, 2025 - Fifty years ago today, Senator Frank Church convened the first public congressional hearing ever held on CIA covert operations to overthrow a foreign government, focusing on the case of Chile. His Senate Select Committee was taking this “unusual step,” Church explained, “because the committee believes the American people must know and be able to judge what was undertaken by their government in Chile. The nature and extent of the American role in the overthrow of a democratically elected Chilean government,” noted the Idaho Democrat, “are matters for deep and continuing public concern. This record must be set straight.” Simultaneously, Church’s Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities released its groundbreaking and still relevant report, “Covert Action in Chile, 1963-1973.” Based on access to Top Secret CIA operational records, the unprecedented 62-page case study revealed that “covert United States involvement in Chile in the decade between 1963 and 1973 was extensive and continuous,” with the intent of blocking Socialist leader Salvador Allende from being elected president and, after he was elected, destabilizing his ability to govern. In considering future guidelines for covert operations, the report concluded that, “Given the costs of covert action, it should be resorted to only to counter severe threats to the national security of the United States. It is far from clear that that was the case in Chile.” On the 50th anniversary of the hearing and the release of the report, the National Security Archive is posting a selection of previously declassified documents that record the efforts of the Ford administration to obstruct the Church Committee investigation and prevent an open hearing on the CIA’s role in overthrowing the Allende government. The congressional efforts 50 years ago fostered a full debate over the propriety of clandestine regime change efforts, and the Committee’s recommendations to tightly restrict such activities remain relevant today, as President Trump has authorized the CIA to engage in covert operations in Venezuela with the goal of deposing the government of Nicolas Maduro. Stonewalling the Committee The documents posted today reflect the Ford administration’s strategic stonewalling of the Senate committee as well as a special committee in the House led by Congressman Otis Pike (D-NY). When the congressional investigators sought State Department cables dating between 1964 and 1970, Kissinger instructed his aides to say “No,” according to a secret transcript of a July 14, 1975, staff meeting. “You shift it to the White House and let the White House refuse it—and I’ll see to it that the White House refuses it,” he instructed. For months, the White House, CIA and State Department delayed their response to multiple Church Committee requests claiming to be short staffed. In truth, as CIA director William Colby later admitted, “the White House told us not to cooperate. They just didn’t want to turn over documents.” Eventually, the CIA came to an agreement with the Church Committee to allow investigators to review Top Secret CIA documents, in return for advance access to the Committee’s reports. But the White House continued to claim “Executive privilege” over critical NSC and White House memos and meeting summaries. Revealing documents related to a pivotal November 6, 1970, NSC meeting three days after Salvador Allende’s inauguration were withheld, including the handwritten meeting notes of CIA Director Richard Helms, who recorded President Nixon’s statement during the NSC meeting (“If there is a way to bring A[llende] down, we should do it”) and Henry Kissinger’s detailed explanation to President Nixon about why the U.S. needed to undermine the Chilean president. Kissinger also concealed from the Committee the existence of his “telcons”—transcripts of his many phone conversations with Helms, Nixon and other U.S. officials that would have revealed his role as the chief architect of U.S. efforts to block Allende from taking office and successfully governing. The CIA withheld key records from the Committee that would have revealed payments of $35,000 in “hush money” to the assassins of the pro-Constitution commander of the Chilean armed forces, General Rene Schneider, to help them flee the country after the murder and assure a cover-up of the CIA’s role in the shocking political crime. Church committee members Senator Frank Church and the other Senators on the Senate Select Committee. As the Church Committee inquiry culminated in the fall of 1975, the Ford White House took further steps to obstruct its work and conceal the controversial covert history the Senate investigation had uncovered. On October 31, 1975, Ford sent a letter to the Church Committee members demanding that their pending report on “Alleged Assassination Plots Involving Foreign Leaders” remain classified to protect U.S. national security; on November 1, Ford signed a Presidential decision memorandum (Document 2) to oppose Senator Church’s plan to hold an unprecedented public hearing on covert operations in Chile—the first of its kind. According to the Ford White House and the CIA, such a hearing would “establish a precedent that would be seized on by the Congress in the future to hold additional public hearings on covert action,” and “would have a shattering effect on the willingness of foreign political parties and individuals to cooperate with the U.S. in the future on such operations.” Facing an impasse with the Church Committee, on November 5, CIA director William Colby invited Church and Senator Charles Mathias (R-MD) to an “informal dinner” to work on some sort of cooperative compromise. Among other points, Colby pushed for the Committee to agree to work with the CIA to delete names of CIA agents, foreign officials, and organizations, and agree that, besides Chile, “no other covert action would be made the subject of a public hearing or public report.” The proposed compromise, according to a November 7, 1975, memo drafted by Colby’s special counsel, Mitchell Rogovin, “limits the exposure of covert action to one country,” Chile. Four other Church Committee case histories—on Congo, Indonesia, Laos and one other country that remains censored in the documents—would remain secret. Release of the Chile Report To its credit, the Church Committee managed to circumvent these concerted executive branch roadblocks. On November 20, 1975, the Committee released its detailed and sensational report on the CIA’s assassination plots against foreign leaders like Fidel Castro, Patrice Lumumba and Gen. Schneider in Chile; on December 4, Senator Church released the staff case study, “Covert Action in Chile, 1963-1973,” lifting the shroud of secrecy on a decade-long effort to use clandestine operations to manipulate the politics of a small Latin American nation and foster “a coup climate” to impede Allende’s democratic election, his inauguration, and the ability of his government to succeed. The two-day hearing on Chile, according to Archive analyst Peter Kornbluh, “established a historic marker in congressional efforts to hold the CIA accountable to the principles and values of the American public.” The two lead investigators and drafters of the staff report on Chile, Gregory Treverton and Karl Inderfurth, both testified on the opening day of the hearing. Inderfurth’s presentation focused on the CIA’s operational efforts to influence Chile’s political trajectory between 1963 and 1973; Treverton focused on executive branch decision-making. During his testimony, Treverton read aloud, for the first time, President Nixon’s September 15, 1970, order to CIA director Richard Helms to prevent Allende’s inauguration by fomenting a preemptive coup. As part of its report, the Church Committee released Helms’ handwritten notes, which became the most iconic document on CIA covert operations in Chile. Handwriten Instruction from Nixon The Church Committee released the first known CIA document of a U.S. President ordering a coup against a democratically elected government. “In preparation for the public hearing on covert action in Chile,” recalled Treverton 50 years later, “we spent several long days in a secured space at CIA headquarters with our CIA colleagues, going through the report line-by-line. Our ostensible purpose was protecting sources and methods, and we did that, sometimes removing the names of honorable Chileans who had worked with the CIA. But we also argued about substance. In the end, what was striking to me, through the long days, was that we were establishing the principle that the highly classified CIA and other documents from which we worked were government documents, not just the Executive Branch’s. The Congress would have access to them more or less on its own terms – though of course protecting sources and methods. It was exciting through the fatigue. It seemed to me [to be] breaking new constitutional ground.” For Inderfurth, the evidence uncovered in the Church Committee’s groundbreaking investigation remains relevant to the current CIA covert operations President Trump has authorized in Venezuela. “Before proceeding,” he recommends, “the president and his aides should look at the Church Committee’s report on ‘Covert Action in Chile.’ Things did not work out well, most importantly for the Chileans who lived under the brutal dictatorship of General Pinochet for almost two decades. But also, for the reputation of the United States as a ‘beacon of democracy.’” The Documents 911 d 1 Document 1 White House, Memorandum for the President, “Background on Covert Operations in Chile,” Eyes Only, October 31, 1975 Oct 31, 1975 Source Gerald Ford Presidential Library As the Senate Select Committee led by Senator Frank Church moves to release its initial reports on CIA covert operations, the Ford White House gears up to oppose the Committee’s efforts. As President Ford considers his options, his counselor, Jack Marsh, advises him on various opinions of top U.S. officials, including Attorney General Edward Levi who “is of the view that you should weigh carefully a decision of this type where your position can be attacked by partisans as cover-up.” Marsh provides Ford with initial details about how the administration would attempt to impede the Church Committee plans for a public hearing on covert operations in Chile, including by preventing former CIA officials from testifying on classified operations in an open hearing. Marsh recommends “that you not agree to the participation of Administration witnesses in an open hearing.” 911 d 2 Document 2 White House, memorandum for the President, Senate Select Committee Plans for Open Hearing on Covert Activities in Chile, Secret, November 1, 1975 Nov 1, 1975 Source Gerald Ford Presidential Library In this “issue for decision” memo, drawn almost word-for-word from a memo from CIA Director William Colby for President Ford, his White House legal counsel Jack Marsh advises him on the pros and cons of opposing the first open hearing on CIA covert regime change efforts. “1. It would establish a precedent that would be seized on by the Congress in the future to hold additional open hearings on covert action. 2. It would have a shattering effect on the willingness of foreign political parties and individuals to cooperate with the U.S. in the future on such operations.” Marsh notes that Chilean political leaders assisted by the CIA over the years might be identified, such as former President Eduardo Frei, “whose election in 1964 we contributed to and whose tacit participation in coup plotting in 1970 may be divulged.” If, however, the White House and CIA cooperated with the Church Committee on the hearings, the White House could seek to protect its sources and assets in Chile and “avoid further charges of ‘cover-up’.” Ford checks the option to “oppose open hearings.” 911 d 3 Document 3 White House, [draft] Memorandum for the President, Senate Select Committee Publication of Chile Covert Action Report, ca. November 1975, 8 pp. (Pages misnumbered in original) Nov 1975 Source Gerald Ford Presidential Library This draft memo to President Ford elaborates on the dangers to CIA operations in Chile and elsewhere in the world if the Church Committee publishes its report on “Covert Action in Chile.” The staff study “is a detailed revelation with specifics,” Ford is advised. “It exposes intelligence sources and methods… It identifies political parties, government entities, media, private organizations and individuals with whom the United States collaborated in a clandestine, confidential relationship. It cites the amounts of money authorized, the recipients, the purposes and the results.” The memo concludes that to “allow the Committee to carry out its intentions to publish and to hold public hearings on covert actions in Chile is unthinkable.” 911 d 4 Document 4 NSC, Comments on Senate Select Committee Report on Chile, Secret, November 5, 1975 (includes cover memo to CIA Special Counsel Mitchell Rogovin) Nov 5, 1975 Source Gerald Ford Presidential Library NSC officials respond to an advance draft of the Church Committee report on Chile. “We have reviewed the Church Committee Staff Report on Covert Action in Chile 1963-1973 and concur most strongly in the CIA position that this material should not be published and should not be discussed in public session,” the memo, drafted by NSC aide Rob Roy Ratliff, advises. Public debate over the wisdom of covert operations in Chile and elsewhere, the NSC argues, would provide adversaries with ammunition “to destroy for all practical purposes any U.S. capability to conduct covert operations…” The memo concludes that “if we are going to fight against release of classified information which would damage our foreign policy and national security interests, this is the time.” 911 d 5 Document 5 CIA, [draft] Memorandum for the President, “Public Disclosure of Covert Action by the Senate Select Committee, November 7, 1975 Nov 7, 1975 Source Gerald Ford Presidential Library The CIA’s special counsel, Mitchell Rogovin, drafts a memo for the White House outlining a possible compromise with the Church Committee which CIA Director William Colby has worked out during “an informal dinner hosted by the DCI” on November 5 with Senators Frank Church and Charles Mathias (R-MD). Among other points, the Committee would agree to work with the CIA to delete names of CIA agents, foreign officials and organizations, and agree that, besides Chile, “no other covert action would be made the subject of a public hearing or public report.” The proposed compromise, Rogovin asserts, “limits the exposure of covert action to one country,” Chile. Indeed, four other Church Committee case histories—on Congo, Indonesia, Laos and [add country]—remain secret, a half century after they were written. 911 d 6 Document 6 U.S. Senate, Letter from Frank Church to CIA Director William Colby, November 14, 1975 Nov 14, 1975 Source Gerald Ford Presidential Library In this letter, Senator Church advises the CIA director that the Select Committee will hold a two-day hearing on covert operations in Chile on December 4 and 5, 1975. Colby is invited to testify and presents his argument for why the hearing is important: “The Committee is of the view that it is necessary to set the records straight and educate the public on vital questions concerning the use of covert action in a democratic society,” Church writes. “In all frankness, I must say that it is my view that it would be a disservice to the public and perhaps to the Central Intelligence Agency itself if you should forgo this opportunity to speak to these issues.” But Colby declines to participate in hearing. 911 d 7 Document 7 CIA, Note from CIA Directors office to White House Counselor to the President, November 18, 1975 Nov 18, 1975 Source Gerald Ford Presidential Library In this short note to White House counselor Jack Marsh, the CIA writes, “We believe that no CIA participation in open hearings on covert action should be our position.”