anyone that thinks any money 'saved' will not be offset by more money redirected to trump cronies is sadly naive. this is all about voter-approved grift on the largest scale ever seen.
Stopping spending beyond the budget would be a good start, but there is no incentive to do that when more money always flows no matter how stupidly it was spent last at time.
As Herbert Stein explained all those years ago, if something cannot continue, it won't. I agree that the US is in a very difficult situation with many mistakes under our belt leading to this time. Unfortunately, the most likely outcome is, as you say, fiscal dominance, which will almost certainly result in higher inflation. negative real rates will be our lot in life until they can devalue the outstanding debt sufficiently.
that said, whatever you may think of Elon and Vivek, they are two really smart guys, with Elon especially able to think on a completely different plane than almost anybody else alive. I would not short his efforts yet.
Thanks Andy. I agree that Elon and Vivek have both demonstrated ability and the attitude required to potentially get some good stuff done. If it was just another lifetime politician making these claims, I probably wouldn't have considered it enough to even write this article. I maintain an ounce of hesitation, just around the ultimate motivation and the huge potential for conflict of interest - particularly given Elon's extensive government contracting with Space X. But as I say above, I welcome it.
When so many people now depend on the government for money and services, it is harder to make meaningful changes. Cutting $2 trillion would be hard enough spreading it out over 5 or 10 years let alone one or two. Every government agency is used to getting bumped up about every year in funds. Maybe the Pentagon will have to stop paying $500 for a crescent wrench. Limiting and squashing the budget is at least a 10 year project, not a two day axe job.
I took a tour of a navy submarine once and they literally had attached an xbox controller to control some of the equipment because getting the original joystick replaced would have cost tens of thousands of dollars. Clearly some efficiency is needed.
But yes I agree with your point on dependence... which is what makes the situation "intractable"
We will see. If 75% of gov employees were fired no one would notice. Especially when they are employing zombies who died 30 years ago....where is that money going?
Great article. Thanks for getting into the details and bringing the problem to life. For some of the expenses, such as housing, I’m curious if regulations are cut and NIMBY-ism starts to taper off, could the government reallocate housing funds? This is assuming the increase in supply of homes stabilizes or reduces multi family housing.
To your point, it is a small amount but I think a few hundred billion in cuts drives the right culture and mindset change.
Deregulation is definitely a big stated goal of “DOGE” and could help open up supply in some areas. Though I would imagine most NIMBY issues for housing are state/local rather than federal. Still, it can’t hurt.
I would say. You are rewarded by being productive by the government stealing half your earnings and giving it to people who create no value. What ever you regulate and tax we get less of... simple.
A look at the numbers makes it nearly impossible to find an actual working solution that the public would actually get behind. Especially when so many are unaware of just how much government spending is used to keep the economy and subsequently their incomes afloat. Thank you though for an honest, and frankly unbiased dive into the factual and deeply concerning reality of the math.
"For me, I look at math" ✊🏼👍🏼
Just calling it like I see it
Let's see how this unwinds... thank you for the article Mr. Bear!
anyone that thinks any money 'saved' will not be offset by more money redirected to trump cronies is sadly naive. this is all about voter-approved grift on the largest scale ever seen.
on the grift front. the fact that this "DOGE" is literally pumping a memecoin of which elon is the most famous holder is pretty gross
Stopping spending beyond the budget would be a good start, but there is no incentive to do that when more money always flows no matter how stupidly it was spent last at time.
Nothing stops this train...
Lyn is proud
As Herbert Stein explained all those years ago, if something cannot continue, it won't. I agree that the US is in a very difficult situation with many mistakes under our belt leading to this time. Unfortunately, the most likely outcome is, as you say, fiscal dominance, which will almost certainly result in higher inflation. negative real rates will be our lot in life until they can devalue the outstanding debt sufficiently.
that said, whatever you may think of Elon and Vivek, they are two really smart guys, with Elon especially able to think on a completely different plane than almost anybody else alive. I would not short his efforts yet.
Thanks for the excellent description though
Thanks Andy. I agree that Elon and Vivek have both demonstrated ability and the attitude required to potentially get some good stuff done. If it was just another lifetime politician making these claims, I probably wouldn't have considered it enough to even write this article. I maintain an ounce of hesitation, just around the ultimate motivation and the huge potential for conflict of interest - particularly given Elon's extensive government contracting with Space X. But as I say above, I welcome it.
Cut out the fraud and it is cheaper fo run government.
When so many people now depend on the government for money and services, it is harder to make meaningful changes. Cutting $2 trillion would be hard enough spreading it out over 5 or 10 years let alone one or two. Every government agency is used to getting bumped up about every year in funds. Maybe the Pentagon will have to stop paying $500 for a crescent wrench. Limiting and squashing the budget is at least a 10 year project, not a two day axe job.
I took a tour of a navy submarine once and they literally had attached an xbox controller to control some of the equipment because getting the original joystick replaced would have cost tens of thousands of dollars. Clearly some efficiency is needed.
But yes I agree with your point on dependence... which is what makes the situation "intractable"
An ugly problem for sure. But even if the DOGE is symbolic, it is a step in the right direction and you gotta start somewhere.
Agree! as i said in conclusion, I'm all for someone taking on the task, even if not a panacea
We will see. If 75% of gov employees were fired no one would notice. Especially when they are employing zombies who died 30 years ago....where is that money going?
Great article. Thanks for getting into the details and bringing the problem to life. For some of the expenses, such as housing, I’m curious if regulations are cut and NIMBY-ism starts to taper off, could the government reallocate housing funds? This is assuming the increase in supply of homes stabilizes or reduces multi family housing.
To your point, it is a small amount but I think a few hundred billion in cuts drives the right culture and mindset change.
Deregulation is definitely a big stated goal of “DOGE” and could help open up supply in some areas. Though I would imagine most NIMBY issues for housing are state/local rather than federal. Still, it can’t hurt.
Thanks for reading and feedback!
How about people take care of themselves. Novel idea?
I do think there is solid evidence of a dependency cycle and poor incentives
I would say. You are rewarded by being productive by the government stealing half your earnings and giving it to people who create no value. What ever you regulate and tax we get less of... simple.
No. You might really appreciate my podcast here: https://soberchristiangentlemanpodcast.substack.com/p/s2-ep-14-the-truth-about-the-administrative-1b5
So assuming our politicians don't have the backbone to cut, it sounds like the most likely outcomes are:
1. AI and other technologies permanently increase GDP growth, leading to the next American golden age and bailing us out of this problem.
2. Fiscal dominance leading to persistent high inflation and negative real rates.
3. Populist dem elections in 2026 and 2028 leading to significant tax increases.
Assuming 2 is most likely, solution is to be 0% in cash and 100% in gold/bitcoin stocks?
Is that the right solution, given 2? Didn’t we just experience that scenario? Stocks are nominal
Good point! Even if stock valuations reset in real terms, the nominal number can keep going up.
A look at the numbers makes it nearly impossible to find an actual working solution that the public would actually get behind. Especially when so many are unaware of just how much government spending is used to keep the economy and subsequently their incomes afloat. Thank you though for an honest, and frankly unbiased dive into the factual and deeply concerning reality of the math.
intractable indeed, sadly. Thanks for reading and the feedback
The point of entitlements is to keep the low IQ public demanding more till the wheels blow off.
Indeed, the only thing one might be waiting on to see is if it will be a slow sinking into collapse, or an all out fall of the edge of the cliff kind.
The vax suicide many off the pay role, but it only delays the inevitable. You might appreciate this podcast: https://soberchristiangentlemanpodcast.substack.com/p/s2-ep-14-the-truth-about-the-administrative-1b5