President Trump with President Javier Milei of Argentina. Milei is a conservative leader similar to Trump who has cut government waste, reduced inflation, improved security, and helped strengthen Argentina’s economy. Liberals and the mainstream media have heavily criticized him for it. Photo courtesy of the U.S. Embassy in Argentina.
Argentina’s President Javier Milei cut government spending, reduced crime, lowered inflation, and improved the lives of Argentines. He is a Trump ally, and globalists oppose him for it. Consequently, they have rewritten history and forgotten that the Treasury’s Exchange Stabilization Fund President Trump used in Argentina has existed for decades.
Media outlets and Democratic lawmakers have claimed that President Trump set up an illegal slush fund in Argentina using taxpayer money. In reality, the mechanism in question, the Exchange Stabilization Fund (ESF), has existed since 1934, has been used by presidents of both parties for decades, and does not allow any American politician to personally benefit from its funds.
On October 9, 2025, Treasury Secretary Scott Bessent announced a $20 billion currency swap with Argentina’s central bank. The Treasury agreed to purchase up to $20 billion in pesos from Argentina in exchange for U.S. dollars, using resources from the Exchange Stabilization Fund (ESF). By the end of October 2025, Argentina had drawn $2.5 billion through the swap line.
The transaction was a loan, not a gift. Argentina was the debtor, and the United States was the creditor. Argentina subsequently repaid the full amount, and Treasury Secretary Bessent later announced that the deal generated tens of millions of dollars in profit for the United States.
The Exchange Stabilization Fund (ESF) is an emergency reserve fund of the U.S. Treasury created by Congress through the Gold Reserve Act of 1934 and made permanent under the Bretton Woods Agreements Act of 1945. The Treasury Secretary can use it, without prior congressional approval, to support foreign governments, work with the IMF, and stabilize financial markets.
The ESF is subject to oversight. Treasury reports its activities to Congress monthly and to the public quarterly through the Federal Reserve. Foreign-government loan agreements must also be reported under the Case-Zablocki Act.
No taxpayer funds have been appropriated to the ESF since its initial $2 billion capitalization in 1934. The fund has remained self-financing through investment earnings and financial operations.
Since 1936, the ESF has participated in more than 100 credit operations with foreign governments. Argentina received seven ESF loans totaling $2.4 billion between 1982 and the early 1990s, all of which were repaid. Mexico received eleven loans totaling $40 billion, and Brazil received eight totaling $7.6 billion.
Countries receiving ESF support under President Ronald Reagan included Jamaica, the Philippines, Ecuador, Nigeria, Yugoslavia, Venezuela, Bolivia, Poland, Guyana, Honduras, Hungary, Costa Rica, Romania, Panama, and Peru.
The best-known ESF operation was the Clinton administration’s 1995 Mexico intervention, structured as a $20 billion currency swap after Congress rejected direct aid. Mexico borrowed $12 billion, repaid it in full, and the United States earned roughly $500 million in profit.
Although the Obama and Biden administrations did not use the ESF for sovereign loans, both relied heavily on the Federal Reserve’s parallel swap-line system. During the 2008 financial crisis, the Federal Reserve extended swap lines to 14 central banks, with outstanding drawings peaking above $580 billion. Those arrangements became permanent in 2013. During the COVID-19 pandemic, swap-line usage peaked at roughly $470 billion in May 2020, with most funds going to the European Central Bank and the Bank of Japan.
The 2025 Argentina agreement was the first new ESF foreign-government operation since Uruguay’s 2002 stabilization package, but it used the same legal authority and financial mechanism employed by prior administrations of both parties.
The underlying legal authority, mechanism, and purpose of Federal Reserve swap lines and ESF swap lines are functionally similar. In both cases, the programs have historically been used to support U.S. allies and strategically important partners. One of the media claims is that Trump is using the money to prop up an ally. However, the United States has never used either mechanism to support an adversarial government.
The U.S. tends to provide financial assistance to allied nations rather than those that hate us. Somehow, the press and the Democrats forgot this and decided that Trump and Argentina’s President Javier Milei having a good relationship was a smoking gun.
The New York Times framed the deal as “staking taxpayer money” on a risky bet and implied conflicts of interest through Bessent’s Wall Street associations. However, this criticism makes little sense because every country-to-country financial agreement is, by definition, funded from public accounts. The United States routinely extends loans to countries facing financial crises, and repayment risk is inherent in sovereign lending.
NPR called the ESF ‘essentially the Treasury Department’s private slush fund.’ However, the Peterson Institute for International Economics concluded that ‘the present-day ESF in no way resembles a slush fund.’ A slush fund is money used secretly for corrupt personal benefit. The ESF was created by Congress, operates under statutory legal authority, and has been reported to Congress monthly since the 1970s.
MSNBC stated that Americans were “on the hook” for $20 billion. However, “on the hook” implies debt, but America did not borrow money from Argentina. The United States extended a loan to Argentina, which Argentina was obligated to repay and ultimately did repay, with profit to the United States.
Democrats in Congress, including Congressman Josh Gottheimer and Representative Nydia Velázquez, called the deal a misuse of taxpayer money and criticized the lack of publicly disclosed repayment terms. Both claims fail the historical test.
The ESF statute, 31 U.S.C. § 5302, has never required public disclosure of specific loan terms. That has been standard practice in ESF operations since the 1930s. ESF agreements have historically contained limited public detail to allow faster execution. The only statutory requirement is written presidential notification to Congress for loans extending beyond six months.
The Washington Monthly called Javier Milei “a strong man in the mold of Viktor Orbán.” Milei ran in a free and fair election, won democratically, and has governed through legal and legislative means. Comparing him to another leader the media dislikes proves nothing negative about Milei.
Since taking office in December 2023, Milei’s administration has eliminated Argentina’s budget deficit for the first time in 123 years. The country moved from a primary deficit of roughly 3 percent of GDP in 2023 to a 2 percent surplus in 2024 after cutting primary spending by 32 percent. Inflation fell from 211.4 percent in 2023 to 43.5 percent by mid-2025, while monthly CPI dropped to 1.5 percent in May 2025, the lowest level in five years.
After contracting 1.3 percent in 2024, Argentina’s economy grew 4.4 percent in 2025, driven by private consumption, exports, and investment growth. Poverty, which initially rose during the adjustment period, later declined from 53 percent in the first half of 2024 to 31.6 percent by the first half of 2025, the lowest level since 2018. Moody’s upgraded Argentina’s sovereign credit rating, citing Milei’s “effective and forceful policy adjustments,” and the IMF stated that the government had exceeded expectations.
Crime also declined under Milei. Argentina’s homicide rate fell to 3.7 per 100,000 people in 2025, down 5.6 percent from the previous year and down 17 percent over two years, giving the country the lowest murder rate in Latin America and the Caribbean for the second consecutive year. In Rosario, Argentina’s most violent city, murders dropped 72 percent through October 2024 compared to the same period in 2023.
Globalist leaders never forgave Javier Milei for calling Europe a socialist “nanny state.” By definition, a nanny state is one that expects free money and defense while doing little to improve its own situation.
A handful of world leaders, including President Trump, El Salvador’s Nayib Bukele, and Javier Milei, have demonstrated that arresting criminals and cutting government spending can cause short-term pain followed by long-term improvements in the quality of life for average citizens. Globalists are calling for their removal from office and their incarceration.
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