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

Planet Money

Nov 15

Overview Shownote Highlights Transcript Chapters Pins

Shownote

Last month, during the longest government shutdown in U.S. history, Treasury Secretary Scott Bessent announced that the United States had offered to functionally loan Argentina $20 billion. Despite the sums involved, this bailout required no authorization ...

Highlights

When the U.S. stepped in to offer Argentina a $20 billion financial lifeline, it did so quietly—using a little-known tool with sweeping power and no need for congressional approval. This move reignited debate over a decades-old fund designed to stabilize global markets, but rarely used for countries in crisis.

09:58

The ESF was used to lend $20 billion to Mexico in 1995 during a major currency crisis.

21:56

The U.S. made a profit of around half a billion dollars from the Mexico bailout.

24:52

Brad Setser evaluated the $20B credit line as potentially insufficient under Bagehot's conditions, giving it a B+ for 'lending freely'.

28:15

Brad believes Argentina can get out of trouble if Milei stops propping up the peso and cuts import spending

Chapters

How did the U.S. quietly backstop Argentina’s economy without Congress?

00:00

What happened when the U.S. rescued Mexico in 1995—and did it work?

13:08

Why Argentina looks like Mexico all over again—and what’s different?

24:52

Can Argentina survive without devaluing the peso—or breaking the budget?

28:15

Transcript

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