So the U.S. puts Republicans (the party of small government) in charge, and gets… trillion dollar deficits as far as the eye can see AND a revival of socialism among Democrats.

Scary as this may seem, the real (and even scarier) lesson is that it’s all inevitable: Beyond a certain level of indebtedness, even pro-business, sound money, small government leaders are powerless to stop the march to insolvency and currency crisis.

The latest example is Argentina, which a few years ago elected a free-market president, only to see its debt explode and its currency crash. From Friday’s Wall Street Journal:

Argentine President’s Prospects Dim With Those of His Country’s Economy

Argentina’s assets took a beating Thursday amid President Mauricio Macri’s continuing struggle to tame rising prices and revive a shrinking economy, raising prospects that his left-wing predecessor could make a comeback in this year’s presidential election.

The peso lost more than 5% of its value against the dollar in early trading Thursday, before regaining some ground in the afternoon. Argentina is now the world’s second-riskiest borrower after crisis-hit Venezuela as indicated by credit default swaps, which are derivatives that pay holders when a borrower defaults on a debt payment.

Mr. Macri, who was elected in 2015 on promises to undo the interventionist policies of President Cristina Kirchner, announced new price controls last week to try to get Argentina’s inflation under control. Mr. Macri has failed during his administration to contain inflation, which has risen to a 12-month pace of almost 55% in March from 25% at the start of 2018.

Here’s the key sentence: “Mr. Macri borrowed heavily in global markets as he tried to slowly restore the government’s finances. He sought in that way to avoid the deep spending cuts and ensuing social unrest that led to the removal of past presidents during previous economic shocks.”

When a country’s debts reach a certain point, “austerity” — that is, lowering spending to shrink deficits — causes so much pain to a population that has become addicted to easy credit and generous benefits, that the politician implementing it is kicked out and replaced with whoever promises the most free stuff. And the debt binge continues.

Europe found this out after trying to force peripheral EU countries to meet low deficit targets. The result is populists and/or socialists in charge of most of the biggest debtor countries.

Macri seems to have recognized the risk of austerity but discovered that borrowing more money to avoid spending cuts is simply business as usual under a different name.

Meanwhile, here in the US, from a financial standpoint it hardly matters who’s in charge after 2020 because massive spending increases are now the consensus, with the only argument being over which things we buy with all that borrowed money.

Put another way, Argentina is now the future of the developed world.