Politics is starting to lose the money-making machine

There is a persistent error in public life. It is believed that crises can be avoided with better intentions. It is expected that the next minister will be more honest, that the next president will resist temptation, and that the next central bank board will “do things right.” Societies that ruin themselves do not usually do so due to a lack of warnings. They do it because they leave in someone else's hands the power to break the most fundamental rule of economic coexistence: do not print money to cover expenses.

This rule cannot be upheld with speeches. It is upheld with prohibitions. When an institution can finance the Treasury, sooner or later it will do so. Not because all its officials are corrupt, but because politics rewards immediate relief and punishes deferred costs. Issuing money offers a visible benefit today and a diffuse harm tomorrow. This asymmetry explains why Argentine inflation was not a climatic accident. It was the predictable result of a design.

Deputies gave half approval to the reform of the BCRA's Organic Charter. The text still needs to pass through the Senate, and until then, the current legal regime does not change. But the core of the initiative is clear. The Central Bank ceases to have a multiple mandate inherited from 2012 and regains a primary mission: to preserve the value of the currency. At the same time, it is stripped of the power to lend to the State, to advance funds, and to purchase public debt in the primary market.

There lies the thesis. A stable currency does not arise from the virtue of those in power. It arises from the legal impossibility of using it as a cash box. As long as the BCRA can cover the deficit with paper, fiscal discipline will be a desire and not an obligation. The Government stated this with an eloquent number. Under the current scheme, temporary advances would have allowed transferring to the Treasury an amount equivalent to more than eighty percent of the monetary base. That is not a technical tool. It is an open door.

The opposition responded that instruments for employment, SMEs, and regional economies are being lost. The argument sounds generous and hides a mechanism. When the central bank “directs credit” or pursues social objectives, it does not create wealth. It reallocates power. It decides who receives cheap money and who pays for inflation. Employment is not defended by devaluing everyone's salary. It is defended when the unit of account stops being diluted every month.

The removal of authorities is also being made stricter. Dismissing the president and the board would require specific causes and two-thirds in both Chambers. Those who reject the reform read it as personal protection. It may be, in the short term, a political effect. In the long term, it is something else. If a board can be removed by simple majority every time it annoys the Executive, independence is theater. The rule does not protect a name. It protects the function against the mood of the moment.

None of this guarantees, by itself, a sound currency. An organic charter does not replace fiscal balance or productivity. But it does alter the map of incentives. The politician who wants to overspend will no longer be able to disguise that decision as “monetary policy.” They will have to seek credit, raise taxes, or cut back. In other words, they will have to face the cost in the present. That is the difference between an institution and a cash box.

Societies learn late that money is not a technical detail. It is the language with which contracts, salaries, and savings are measured. When that language is corrupted, everything else is corrupted. The half approval does not close the story. It merely affirms a principle that Argentina forgot for decades. The State can govern. It cannot, without destroying economic life, continue to print the unit that everyone counts on.