Elon Musk Implausibly Claims ‘Competence and Caring’ Can Cut the Federal Budget Deficit in Half

“contrary to what Musk claimed, tackling “waste, fraud, and abuse” cannot possibly generate enough savings to eliminate the annual budget deficit, which was nearly $2 trillion in fiscal year 2024, let alone reduce the ever-climbing national debt, which currently exceeds $36 trillion, including $29 trillion in debt held by the public.”

“Even if Musk succeeds in curtailing “waste, fraud, and abuse,” there is only so much he can accomplish by focusing on “driving change through executive action based on existing legislation,” which is how he described his agenda last November. Any serious attempt to reduce federal borrowing will require new legislation that addresses the main drivers of federal spending, including Social Security, Medicare, and the military budget. But the platform on which Trump ran takes all those things off the table while promising pricey policies that will only exacerbate the problem that Musk decries.”

https://reason.com/2025/02/12/elon-musk-implausibly-claims-competence-and-caring-can-cut-the-federal-budget-deficit-in-half/

The GOP’s Unreliable Cutter-in-Chief

“The problem for Trump is that for all of his talk of prioritizing loyalty in his second term, he has staffed his administration with a number of conservative ideologues who could have very different ideas about what the government should be doing — none more influential than his likely soon-to-be budget director, Russ Vought.
Vought is a well-known quantity on Capitol Hill from his time as a staffer there, to say nothing of his work as a Project 2025 author and all-around warrior for small government. Republicans there saw his fingerprints on the spending freeze — or the “Vought memo,” as some are calling it.

“This has Russ’s name written all fucking over it,” said one GOP aide who works in appropriations, adding, ”I see a disparity between what Trump wants to do and what Russ wants to do.”

In other words, the battle between fiscal hawks and populists is set to rage not only on Capitol Hill and elsewhere in the coming months, but inside the White House itself.

“There’s an undercurrent of the old Republican Party at play where they’re like, ‘We’re going to cut benefits’ and all this,” the lawmaker said. “And like the new Republican Party is like, ‘Yeah, we don’t care about that.’””

https://www.politico.com/news/magazine/2025/02/01/trump-unreliable-spending-cuts-column-00201754

Opinion – Elon Musk wants to ‘delete’ many Americans’ financial lifeline

“Elon Musk — who, along with Vivek Ramaswamy, has been tasked by President-Elect Trump with running a new Department of Government Efficiency — posted on his platform X that he wants to “Delete CFPB,” referring to the Consumer Financial Protection Bureau. The agency, Musk said, was part of a problem of “too many duplicative regulatory agencies” in Washington. But there are no other agencies in the federal government returning money to Americans’ bank accounts in the way the CFPB does.
Since its founding, the agency has returned more than $19 billion in cash to people who have been scammed by financial institutions, including predatory payday lenders and even some of the largest banks in the country. It has done so under Republican and Democratic presidents, including major actions against Wells Fargo and Equifax during President Trump’s first term in office, which, combined, returned $425 million to consumers. (Those actions both began under the Obama administration, but Trump’s CFPB directors oversaw the execution of those fines.)”

https://finance.yahoo.com/news/opinion-elon-musk-wants-delete-143000169.html

Keeping These Tax Cuts Is a Bad, Expensive Idea

“Extending the individual income tax portions of the Tax Cuts and Jobs Act (TCJA) is supposed to be a good thing, right? After all, who doesn’t love lower taxes? However, data from the Congressional Budget Office (CBO) predicts that, without accompanying spending cuts, these tax cuts are going to cost the government.
If the cuts continue, it’s possible that “the positive effects of lower taxes would be counteracted by the negative effects of higher debt,” according to a Tuesday report from the Committee for a Responsible Federal Budget (CRFB).

“Despite claims that tax cuts pay for themselves,” the CRFB adds, “analyses from across the political spectrum have found that the economic effects of extending the expiring parts of the Tax Cuts and Jobs Act (TCJA) would offset 1 to 14 percent of the revenue loss – falling well short of the 100 percent needed to pay for itself.”

While the tax cuts would create an economic boost in the short term, increasing gross domestic product (GDP) by around 0.3 percent in 2027 and 2028, the CRFB predicts that the cuts will actually lower projected GDP by 0.08 percent by 2034. Further, the CBO’s data shows that continuing TCJA tax cuts are likely to lead to increasing interest rates over the next decade.

While continuing the cuts “would produce about $90 billion of positive revenue feedback,” according to the CRFB, “those higher interest rates would add $150 billion to the debt, more than counteracting the revenue gains.””

https://reason.com/2024/12/12/keeping-these-tax-cuts-is-a-bad-expensive-idea/

Federal Government Has ‘Grown Too Big, Promised Too Much, Subsidized Too Many,’ Warns Former GAO Boss

“Unless Congress puts the country on a different fiscal course, Walker believes there is a 70 percent chance of a serious debt crisis before the end of the decade. That crisis would have “serious adverse economic security, national security, diplomatic, and domestic tranquility consequences,” he warned, adding that the middle class would “be affected the most on a relative basis” if standards of living are suddenly hit with a debt-induced shockwave.
This week’s hearing was intended to highlight bipartisan agreement on the seriousness of the federal government’s fiscal problems, said Rep. Jodey Arrington (R–Texas), the committee’s chairman.

“We’ve got major fiscal problems and a completely unsustainable fiscal trajectory. I haven’t heard anyone, Democrat or Republican, witness or member, that [sic] doesn’t accept that fact,” he said. “We won’t know when the dominoes fall on us in a sovereign debt crisis, it’s going to be difficult to put the pieces back together and maintain our global leadership.”

Those remarks echo warnings issued in recent years by governmental entities like the GAO and the Congressional Budget Office, as well as outside groups like the Penn Wharton Budget Model. Since 2015 the gross national debt has doubled, from $18 trillion to over $36 trillion. Debt held by the public, which most economists consider the more significant measure, sits at more than $28 trillion, or 99 percent of GDP. Deficits of nearly $2 trillion are expected for the foreseeable future.”

https://reason.com/2024/12/13/federal-government-has-grown-too-big-promised-too-much-subsidized-too-many-warns-former-gao-boss/

The National Debt Just Hit $36 Trillion. Does Trump Have a Plan To Control It?

“the Treasury Department issued another reminder about the cost of doing nothing to change course. The national debt hit $36 trillion—less than four months after surpassing the $35 trillion mark.
Evenly divided, that means every American is now six figures in the red, thanks to the decisions made in Washington, D.C., over the past few decades. The trajectory ahead looks no better. The federal government is on pace to run multitrillion-dollar deficits for the foreseeable future—and that’s the rosy scenario, which assumes no recessions, wars, pandemics, and the like. Measured against the size of the U.S. economy, the debt is approaching the record high set in the final year of World War II. The rising debt means higher annual interest payments that will complicate the federal budget, likely require higher taxes, and make everyone poorer.”

https://reason.com/2024/11/15/the-national-debt-just-hit-36-trillion-does-trump-have-a-plan-to-control-it/

Financial Crisis Warning: Former FDIC Chair Reveals Debt Now ‘Unsustainable’ | Sheila Bair

The debt is a huge problem and we need bi-partisan solutions to fix it.

Solutions that the incoming administration have proposed like cutting 70% of the federal workforce: demonize the bureaucracy, will make government function poorly, and are bad ideas.

https://www.youtube.com/watch?v=d7ZH6hN6Axc

What should the 2023 Washington Consensus be?

The United States is doing way better than seemed likely since the end of the Cold War as far as its economic power compared to the rest of the world. Improving efficiency rather than protecting jobs is the best way to maintain prosperity. The federal debt is a major concern.

https://www.youtube.com/watch?v=7udKsziNqRQ

How the debt could topple Trump’s growth agenda

“Jeff Bezos, Larry Fink and Donald Trump’s Treasury pick Scott Bessent all agree: Turbocharging economic growth is the best route to reining in the U.S.’s massive $36 trillion debt. History is not on their side.
Bessent warns that this is the “last chance” for the country to grow its way out of the record debt without becoming a “European-style socialist democracy.” Fink, who heads the world’s largest asset manager BlackRock, urged the incoming administration in an Election Day op-ed to promote artificial intelligence and infrastructure investments to grow the economy and tame the deficit. And Amazon founder Bezos told economic power brokers at the DealBook Summit this month that the only way to solve the problem is to expand the economy by 3 to 5 percent a year while simultaneously trimming annual deficits.”

“That’s a tall order that few modern presidents have managed to achieve for any sustained period. Bill Clinton famously generated budget surpluses while the economy soared at rates of more than 4 percent in the late 1990s. Ronald Reagan brought down deficits in 1984 and 1987 but otherwise ran up the red ink. And Trump himself will face even more significant challenges if he follows through on tax and tariff pledges that budget forecasters say could add $4.1 trillion to $15.6 trillion to the debt over the next decade.

Trump promised during the campaign that a combination of lower taxes, more energy production, looser regulations and punishing tariffs would generate “explosive” growth to pay down the debt. And government budgets would shrink by “trillions,” he said, with Elon Musk and Vivek Ramaswamy tasked with tackling government waste.

But Trump has also vowed that he won’t touch entitlement programs like Social Security and Medicare, which are by far the chief drivers of the debt and are projected to be insolvent by the mid-2030s. Imposing tariffs on imports could trigger reprisals that would harm growth, and even if they didn’t, many economists believe it would take a historic economic boom to meaningfully address the country’s fiscal challenges.

“You can’t improve this with growth,” said Tom Porcelli, the chief U.S. economist at PGIM Fixed Income. “You’d have to have 5 percent growth for a pretty decent amount of time to have any real notable impact.””

” Fiscal watchdogs and credit-rating agencies have been clanging alarms for years about the U.S.’s growing debt, which is the accumulation of annual budget deficits. Rising deficits — which can be inflationary and push up interest rates — could become more acute as the population ages and spending for mandatory entitlement programs climbs. Even steep cuts to discretionary federal programs wouldn’t make a meaningful dent in the debt without extensive structural reforms.”

https://www.politico.com/news/2024/12/16/trump-ceos-american-debt-plan-00194362

Elon Musk assures voters that Trump’s victory would deliver “temporary hardship”

“Were Trump to implement Musk’s vision while simultaneously honoring his promise to avoid cutting entitlements and the GOP’s commitment to avoiding defense spending cuts, then he would need to slash all other government programs by 80 percent. That would involve gutting all social services for low-income Americans, food inspections, air safety, health insurance subsidies, and infrastructure investments, among countless other things.
This would abruptly and massively reduce demand in the US economy, potentially triggering a recession.

There is little reason to expect such severe and haphazard spending cuts to benefit the economy in the long term. After all, government investments in education and infrastructure often increase the economy’s growth potential — slashing funding for such programs could impair America’s economic performance in the coming decades.”

https://www.vox.com/politics/381637/elon-musk-donald-trump-2024-election-temporary-hardship