Scott Bessent approves a $20B solo bailout for Argentina’s peso without IMF or international support

US Treasury Secretary Scott Bessent has stepped into a storm that one of his predecessors, Larry Summers, knows all too well. Both men share a similar mission, steadying fragile Latin American currencies, but their methods could not be more different.

As Cryptopolitan reported extensively, Scott agreed to a $20 billion swap deal to rescue Argentina’s economy a few weeks ago, a plan that stunned everyone after President Donald Trump tied the funds to President Javier Milei’s political survival.

Larry, who helped design the 1994 Mexican bailout, says Washington’s latest play looks like a solo act in a field where teamwork once defined success.

The former Treasury Secretary reminded viewers that he was at the center of the Clinton administration’s response to Mexico’s currency collapse, when the US worked hand in hand with the IMF and other nations to stabilize the region.

“I’m a strong believer that the United States has to support global financial stability,” Larry told Bloomberg TV, but he warned that Scott’s strategy breaks tradition. “Usually, the United States has wanted to share the burden, share the taking of risk, share the responsibility with other countries. Yet in this case, the United States is going it completely alone.”

Larry warns about the risk Scott is taking

For Larry, this is a full leap into uncharted financial risk. He pointed out that the United States has never before purchased a pegged currency under attack from an emerging economy, and he stressed that even during Mexico’s worst days, the US refused to buy pesos directly.

“This is a very speculative approach,” Larry said, adding that unseen agreements might exist, but he still felt “nervous about the approach being pursued.” But he did acknowledge that the gamble could pay off; taxpayers might even profit if the peso strengthens, though he framed that outcome as the exception, not the plan.

The US has traditionally acted as a stabilizer, not a speculator. Larry pointed out the irony in Trump’s decision: the same administration that demands shared defense costs from allies now refuses to share financial responsibility. It’s America’s first truly go-it-alone intervention, and it’s Scott’s name on the deal.

Trump ties the aid to Milei and Larry questions America’s direction

Tension escalated when Trump met Javier at the White House, telling reporters, “We think he’s going to win. He should win. And if he does, we’ll be very helpful. If he doesn’t, we’re not going to waste our time.”

Those remarks turned a financial rescue into an election wager. Investors immediately read it as a political condition disguised as economic support. Larry didn’t ignore that angle. He said he was “less worried about the US throwing its weight behind Argentina’s incumbent” but more concerned about the precedent of linking aid to personal alliances.

But Larry also connected today’s politics to a broader decline he’s been warning about for years. He recalled how he foresaw inflation risks after the $1.9 trillion COVID stimulus, arguing that political choices, not just supply chains, were driving instability. Now, he says, American populism looks eerily familiar to the kind that once plagued Latin America.

“For much of my career,” Larry said, “I believed Latin American countries would prosper if they became more like the United States; secure elections, independent courts, fiscally prudent budgets.”

Then came the gut punch: “I had not really contemplated the possibility of convergence in the other direction; with the United States becoming more like Latin America. That is, to my mind, a troubling prospect,” Larry said at the end of his interview.

Get up to $30,050 in trading rewards when you join Bybit today