Nobel Prize-winning economist, Paul Krugman has slammed U.S. Treasury Secretary Scott Bessent for the administration’s $20 billion aid package for Argentina, calling it a lifeline for his “hedge fund buddies,” rather than being a move that furthers in U.S. strategic interest.
A Bailout For His ‘Hedge Fund Buddies’
In his newsletter on Thursday, Krugman said that the Trump administration “really hates giving foreign aid that serves any kind of humanitarian purpose,” but appears eager to “bail out Argentina’s version of Elon Musk,” referring to President Javier Milei.
“So while millions of children must die to save a few billion dollars,” Krugman said, while “taxpayers are on the hook for billions more to bail out Bessent’s hedge fund buddies.”
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Krugman previously described the aid as ideologically motivated but now says he was “insufficiently cynical.” He said that the move may be aimed at protecting the interests of Rob Citrone, a billionaire hedge fund manager, and long-time associate of Bessent, who, according to Krugman, has invested heavily in Argentine assets.
Citing an analysis by Matthew Klein, Krugman notes that “U.S. taxpayer money is propping up the peso, allowing hedge funders to sell their Argentine assets at inflated prices, after which the peso will promptly fall again.”
Krugman also criticized the lack of a viable economic plan, saying “there’s no plausible scenario in which even $20 billion in U.S. loans will save Javier Milei’s failing economic strategy.” Instead, he described Bessent’s justification for the bailout as “a hefty dose of conspiracy theory.”
American Farmers ‘Very Upset’ About Trump’s Argentine Bailout
According to Sen. Chuck Grassley (R-Iowa), the Trump administration’s $20 billion bailout to Argentina has attracted sharp criticism from soybean farmers in the U.S. who are “very upset” with the South American nation shipping soybeans to China, so soon after receiving an American bailout.
A market that was once dominated by American growers has since been undercut by Argentina, following Trump’s tariffs and trade wars with China.
Sen. Elizabeth Warren (D-Mass.) has similarly slammed the bailout, saying that “Instead of using our dollars to buy Argentine pesos, Donald Trump should help Americans afford health care,” on Thursday, in a post on X.
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