He's serious about him living within his too. But his are just a lot bigger means.
To be fair, I don't begrudge him those means. The man has singlehandedly democratized credit card processing, revitalized America's space program, built a world-class AI product, revolutionized batteries, and may well build the first man-machine neural interface.
Not bad for a geeky dude from S. Africa. I certainly have far more respect for his wealth than for Trump's.
Tax hikes should be part of any deficit reduction, for sure. The best move would be to raise average tax rates more than marginal tax rates, by fully eliminating deductions for state income taxes, by reducing the mortgage deduction and by changing the charitable deduction such that only donations meant to expended on charitable works in the next 12 months (annual fund) are fully deductible (perhaps allow gifts to endowments and foundations to be deducted at 5 pct a year for 20 years) and the deduction for donations of appreciated but untaxed asset values is eliminated (make donors pay capital gains taxes on those gains and then take deductions). The estate tax should be replaced by a capital gains tax at death (above an exclusion and carving out some more for closely held/family owned small businesses). Canada used something like that system.
I’d love to see the corporate tax replaced by a GST on all corporate revenues with deductions for US-sourced CGS, US labour costs and US investment. Foreign expenses - including royalties paid to the tax havens the tech and pharma bros have transferred their IP to- would not be deductible. And foreign revenues would not be taxable (incenting exports).
In the end I don’t care how our deficit at full employment is reduced - that is up to Congress and a prez (likely not Harris or Trump )- but I won’t be voting for any prez candidate who doesn’t have a plan to cut the deficit and who instead is proposing all sorts of new spending while putting forward zero ideas on paying for the old spending.
Such a tax regime is not costless, even if assuming revenue neutrality.
Some of the costs of VAT, in places that have tried it, are reduced small business dynamism (VAT favors big, integrated businesses) and regressiveness because poors must necessarily expose more of their income to consumption than middle- and upper-class workers.
If you want to see if there will be a popular uptake of VAT, ask people if they are willing to trade gasoline taxes for a tax on vehicle km/miles traveled.
“Places that have tried” a VAT include almost everywhere but the USA, and VATs are well-established. Low-income citizens should receive more credits and services from the government than wealthy citizens as a result of increased tax revenue, but of course that is the political problem. US citizens believe anything paid for by the government is a communist confidence game, and that those who earn more, deserve more.
Logically (thought erroneously) he may want to reduce transfers and other non-investment spending -- presumably he thinks NASA's support of SPACE X is investment -- enough to reduce deficits w/o repealing the Trump cuts (which after all only made the GWB cuts worse)
Higher debt, unemployment, or investment are the only choices. I like the Pettis argument that you have to spend to increase human capital to change the composition of the economy and increase consumption/demand to drive productive investment. I think this, along with the Manhattan Institute's review of the debt reduction options, is a more effective explainer than the simplistic Tea Party perspective that I see in Musk.
As a retired U.S. civil servant (and retired Army officer) I am offended that you blithely assert that a civil servant altering data is possible, even likely: “That estimate may be exaggerating the skew, since it’s done by a former Biden administration employee.” Your disrespect for the apolitical commitment of civil servants to our public duties detracts greatly from your otherwise respectable work. It also reinforces the lies of Trump and Vought who seek to politicize and destroy Federal civil service.
I’m surprised at your indignation and admire it. I figured it was common knowledge that partisan players tend to skew data to meet the parties goals, much like some of us would on a personal level. You obviously do not cheat or skew data but with your work as a civil servant, do you think it’s a common practice for others in that field? I’m very curious to your answer.
Absolutely not common to see dishonesty. We review each other’s work, like peer review. No professional civil servant would risk their reputation and integrity to alter work built on fairly accessible data. There is zero upside to do this and a lifetime of peril. But we also take an oath, like US military officers, to support and defend the Constitution. The vast majority of civil servants take it seriously and work without reservation to uphold that oath.
The point is, civil servants are NOT partisan. I worked as a. Civil Servant for Bush, Obama. Trump and Biden. We all did our job exactly to the same standards regardless of POTUS, our boss. Elect Trump and Vought has vowed and already prepared orders to change that.
It doesn't require dishonesty. An observation that is not published or a publication that is not publicized as much is all that it takes to skew results (since all results are statistical and include some random noise).
Likely in every instance, no. Possible - of course. That’s the thing about humans - humanity includes even civil servants - and humanity has its share of liars, cheaters, frauds, partisan hacks and those who make up excuses for putting their thumbs on the scales.
Anyone who reads the news knows that the FBI, DOJ, CIA, IRS, EPA, you name it- have plenty of liars and partisan hacks. And hey, how about that 2020 census! How about the CDC going along with school closing and a ridiculous vaccine mandate for partisan reasons in the face of opposing scientific evidence?
Outside of government, we know employees might be dishonest
and we plan for it- that is why there are controls and surveillance, and most of all, accountability. And of course there is still fraud- some committed by those meant to be watching the hen house. Any manager who asserts that anyone employed in their firm is honest, trustworthy and beyond reproach is a fool and a danger to everyone around them. Systematic surveillance and controls are the key.
Well, you revealed a lot of your biases in your COVID criticism. Just think for one quiet minute about a death toll of ONE MILLION citizens. That you dismiss CDC recommendations in the face of that awful cost explains to me at least why you think government employees lie. Oh, and as a science PhD I’ll take you on line for line on your so called “scientific evidence “ against COVID protections. My data will be peer reviewed, of course.
The CDC had the teachers unions write the first draft of the school closings policy. This after numerous studies and most responsible countries supporting school openings,
Biden’s “vaccine mandate” was implemented for the military in August 2021 by OSHA in November of 2021. This was after the vast majority of the population had already been vaccinated or had been infected with Covid (or both) and after the emergence of the Delta variant which was not as susceptible to the original vaccines (by the time of the OSHA rule, Omicron was becoming prevalent).
Here is a study from the NHS conducted in 2021 on vaccination vs transmissibility of Delta (this was after several studies in mid-2021 showing vaccination’s reduced effectiveness vs Delta):
“…The reductions in transmission of the delta variant declined over time after the second vaccination, reaching levels that were similar to those in unvaccinated persons by 12 weeks in index patients who had received ChAdOx1 nCoV-19 and attenuating substantially in those who had received BNT162b2….”
School children were abused and servicemen/women were sacked in measures based upon partisan hackery meant to please Biden’s gullible base (ie you) and punish enemies (school parents and children).
The military didn’t lift its mandate until 2023. Insanity,
How can you not know all this? I suppose a tadpole doesn’t realize water is wet.
You twist the history and timeline. I was working as a DoD Civilian for the Army when the Services and OPM directed mandatory vaccination of all military and civilian personnel. That was early after the initial availability of the first vaccines. You've warped your narrative forward to the Delta variant. I was a senior supervisor who counseled the Soldiers and Civilians working for me on the reasons for the vaccination directive. The literature was clear and honest about what was known and not known. The CDC did a fine job making hard recommendations without perfect knowledge. That's what non-partisan Federal Civil Service employees do. It worked. Tell me what the vaccine mandate, school closings and mask directives cost us, with facts. I'll tell you that it saved hundreds of thousands of lives. I know many people who died of COVID before and after the vaccine was available. You can't play fast and loose with the history of a deadly pandemic and expect to get away with it. So your outrage seems to be that the mandate wasn't loosened soon enough? That's rich. Do you realize that Service personnel have a requirement to take several vaccines and even more for regional-specific deployments. It's part of the freedoms Servicemembers surrender when they join the military. Does that bother you too?
What is happening to inflation under these deficit reduction scenarios? Even under the deficit reduction scenarios analyzed here, could we also see a rise in consumer prices and still high interest rates due to Trump's tariff plan?
That's harder to say, but generally, if you get a big reduction in demand and a rise in unemployment, inflation falls. But since inflation is already back to around 2%, falling further could be dangerous.
"I don’t like the way he plans to go about it — giving massive awards to himself (Musk) and his own lofty social stratum, while inflicting pain on the masses".
I really would like to be able to understand what motivates guys at this level of wealth. Like, IMHO, the first $10-20M of net assets give you a topnotch lifestyle where almost nothing is out of reach. Around $100M, you get "fuck you money" (unless your business is entirely relying on a few customers). Above, you start accumulating political power without having to be elected.
Musk, Gates, Soros, the Koch brothers - they were able to impose their views of what society ought to be without having to ask us for our votes. That's something I view as problematic but YMMV.
But if Musk gets to be the shadow President, he's got all the fucking power in the world. What would he need more tax cuts? What would $300B get him that $200B doesn't get him? I don't get it.
Right. But more power than the Presidency? More power than $200B?
At this level, his ability is constrained by his capacity to source technical talent and organize others to execute his plans, not by funding.
AFAICT, there is no difference between $200B and $300B... unless he wants to buy 2 other twitters... but even there time seems like a bigger constraint than capital...
If we're talking about Musk, he can't be President.
And yes, more power than hundreds of billions of dollars. Money isn't power on its own, it is converted into power. The actions you're responding to are exactly that process of converting money into power.
Aside from this, when you reduce spending this dramatically, there tends in practice to be a structural element to it that can cause some serious long-term economic damage. As governments try to make the numbers add up whilst avoiding political damage, they make sub-optimal decisions that can reduce investment, limit state capacity, and bake in some perverse incentives. Once you've done that, you can find that reversing it is not so easy because you also have to solve the extra problems the cuts created in the first place.
Examples of that would be when you limit a department's productivity because you've cut "superfluous" administrative staff while pushing their workload onto people who should be doing other things. Then even if you try to increase the department's budget later, you have still lost a bunch of organisational memory. Or when badly thought-out means testing for benefits creates some really janky effective marginal tax rate cliffs. As a result, instead of just cutting taxes later, you also then have to sort out your Kafkaesque welfare system.
To bring this down to earth, ask people to imagine how their lives would change. Paint a word picture of how the world would be different for most people under Trump and Musk's plan. Make your picture short enough for an average person to read and imagine it.
Also, Trump claims that we are an "occupied country" -- occupied by invading immigrants and criminals. Ask people how that "occupation" manifests itself in most people's lives. I'm sure most people would say there is no such manifestation. Then ask how the day-to-day world would change if Trump took some action to eliminate the so-called occupiers. The big change in most people's lives would be more police and police-like forces nosing about. It wouldn't be pleasant. Ask people to imagine living in such a world. Is that what they really want?
They won't believe you. Musk and Trump are geniuses, dontcha know?
And they hate liberal elites more than I can understand. But they'd align with Xi, with Putin, with anyone as long as they promise to destroy the liberal elites.
Noah, I am concerned that you are normalizing a Trump victory in your latest posts. After saying 'the free world teeters on the edge of a knife' (which is completely accurate), you are now talking about Trump winning in terms of 'we are all going to be really stressed out' and 'the policies for austerity are the wrong policies'. Those characterizations seem ... let's say pretty weak ... compared to how you have previously spoken.
The projections for job losses from Trump's plans, even before Musk came in to basically say 'we are going to eliminate more money from the budget than all discretionary spending put together' are severe enough that I think most economists should be saying "this is a terrible direction for the country's economy".
Still waiting for someone to explain to me why the federal government of the United States, as the monopoly supplier of dollars, needs to borrow back the dollars it has spent into existence in order to "finance" its creation of any additional dollars it wishes to spend.
I'm also still waiting for someone to explain to me we can't make the hysteria about the federal "debt" dissipate immediately by referring to it as "private sector savings, and do the same with respect to the "deficit" by referring to it as the "public sector surplus."
BTW: If Trump is re-elected, and begins to ratchet up both the (fictional) "deficit" and the (fictional) "debt" by cutting all sorts of taxes without also cutting government spending, I predict, with absolute certainty, that Veep Vance will immediately hit the stump to repeat, endlessly, the immortal words of that other vile prick of a VP, Dick Cheney: "Deficits don't matter." And that will put an end to hysteria about the debt and the deficit once and for all (since, as Trump as suggested, we'll never have to have another election after the one next week).
The truth, the whole truth and nothing but the truth. The top tier insists we proles must obey our betters, and such questions are not open for consideration.
An unfortunate reality is that whatever plan is put in place must be effective within one administration or, more likely, two years of one administration. The odds of a 30-year plan surviving a change of one administration not to mention up to seven administrations to show any effective benefits are slim to none.
Reading this post, I found Musk's plan DEEPLY offensive. I realize that we are talking about two separate plans: Musk is only really talking about spending cuts and Trump about tax cuts, but comibining them yields the result described in this post: services like Medicaid and ACA subsidies for the most vulnerable are cut, and the affluent Americans get another tax cut. The difference between this and Reagan;s tax cuts is that Reagan was cutting from a much higher tax rate. He also cut taxes in several steps: first, from 70% to 50%, then increased Social Security taxes on everyone, then did a tax reform which finaly cut the top rate to 28% and created a dual rate system of 15% and 28% (with a parallel AMT system of 26% and 28%). The whole project took over 6 years and it was passed with wide majorities in Congress. This plans smacks of the "wealfare queens", "let them eat cake" Marie Antoinette. There is NO discusion about entilement reforms. In short, it takes a system where we redistribute wealth from young to old and redistribute it some MORE from young to old. Does Musk realize that a lot of Trump supporters rely on government programs like disability payments and Medicaid? Fortunately, this will never pass in Congress.
To add to this, the math does not even work because we will likely need a (small) increase in defense spending, and some increases in R&D spending (which Musk is in favor of and so am I). Ad we probably do need to pair down the federal government some. I would be in favor of gettimg read of the Dept. of Education - we don't need it. But putting this in perspective: the last serious deficit reduction effor was the Budget Control Act of 2011. This was passed essentially under duress (the infamous debt ceiing standoff between Obama and the Tea Party House Republicans), but in the end, both Houses passed it and the President signed it into law. It planned about $2 trillion in spending reductions over 10 years! The Act worked for about 4 years after which the leadership of both parties quietly scrapped it.
I’m all for the audit, but we should be looking for efficiencies instead of cost cuts. Are we spending the money wisely? My guess is we are not. If we were, we could deliver more and support growth in the economy through infrastructure improvements and a more capable workforce. I liked Josh Shapiro’s “Get Shit Done” approach they used to repair the collapsed I-95 bridge and how they are using that model for other initiatives. Changing the government contracting process itself to something more like the private sector could lead to higher productivity pretty much immediately.
One thing is absolutely certain -> Under a Trump 2.0 regime: The very wealthiest, the top several hundred billionaire oligarchs, will see their wealth grow enormously. The bottom 95% of te US public will see their assets shrink dramatically - they will be impoverished in order to make Trump, Bezos, Musk and the rest of the corrupt oligarchs phenomenally wealthy.
Elon's plan is to create so much chaos there is no time to focus attention on his personal activities and investments. By the time the smoke has cleared and the fires are out, he'll be long gone. Not a ten-year plan. Zero accountability.
Is the “fly in the ointment” really the lede? My takeaway from this is that US overperformance vs other countries is mostly a function of higher, unsustainable, deficit spending.
Doesn’t that put the accomplishments of the US economy in a different perspective than you and others have described (a sign of American fundamental strength or bidenomics or something else?
If Musk was serious about “living within our means” he’d want to pair spending cuts/freezes with a rollback of the Trump tax cuts.
Musk is totally serious about "you" living within your means.
He's serious about him living within his too. But his are just a lot bigger means.
To be fair, I don't begrudge him those means. The man has singlehandedly democratized credit card processing, revitalized America's space program, built a world-class AI product, revolutionized batteries, and may well build the first man-machine neural interface.
Not bad for a geeky dude from S. Africa. I certainly have far more respect for his wealth than for Trump's.
Can't wait to not buy a Tesla not because I hate Musk but because I can't afford to buy a Tesla!
I'm in the market for a non-tesla EV be because of musk
The used Tesla market is a boon for buyers. For a reason.
Tax hikes should be part of any deficit reduction, for sure. The best move would be to raise average tax rates more than marginal tax rates, by fully eliminating deductions for state income taxes, by reducing the mortgage deduction and by changing the charitable deduction such that only donations meant to expended on charitable works in the next 12 months (annual fund) are fully deductible (perhaps allow gifts to endowments and foundations to be deducted at 5 pct a year for 20 years) and the deduction for donations of appreciated but untaxed asset values is eliminated (make donors pay capital gains taxes on those gains and then take deductions). The estate tax should be replaced by a capital gains tax at death (above an exclusion and carving out some more for closely held/family owned small businesses). Canada used something like that system.
I’d love to see the corporate tax replaced by a GST on all corporate revenues with deductions for US-sourced CGS, US labour costs and US investment. Foreign expenses - including royalties paid to the tax havens the tech and pharma bros have transferred their IP to- would not be deductible. And foreign revenues would not be taxable (incenting exports).
In the end I don’t care how our deficit at full employment is reduced - that is up to Congress and a prez (likely not Harris or Trump )- but I won’t be voting for any prez candidate who doesn’t have a plan to cut the deficit and who instead is proposing all sorts of new spending while putting forward zero ideas on paying for the old spending.
Save the VAt to replace the wage tax. Replace business and personal income tax with progressive consumption tax
Such a tax regime is not costless, even if assuming revenue neutrality.
Some of the costs of VAT, in places that have tried it, are reduced small business dynamism (VAT favors big, integrated businesses) and regressiveness because poors must necessarily expose more of their income to consumption than middle- and upper-class workers.
If you want to see if there will be a popular uptake of VAT, ask people if they are willing to trade gasoline taxes for a tax on vehicle km/miles traveled.
“Places that have tried” a VAT include almost everywhere but the USA, and VATs are well-established. Low-income citizens should receive more credits and services from the government than wealthy citizens as a result of increased tax revenue, but of course that is the political problem. US citizens believe anything paid for by the government is a communist confidence game, and that those who earn more, deserve more.
Logically (thought erroneously) he may want to reduce transfers and other non-investment spending -- presumably he thinks NASA's support of SPACE X is investment -- enough to reduce deficits w/o repealing the Trump cuts (which after all only made the GWB cuts worse)
To say nothing of the vast flow of loans, subsidies, and tax breaks for corporate America, including Musk's own firms.
Higher debt, unemployment, or investment are the only choices. I like the Pettis argument that you have to spend to increase human capital to change the composition of the economy and increase consumption/demand to drive productive investment. I think this, along with the Manhattan Institute's review of the debt reduction options, is a more effective explainer than the simplistic Tea Party perspective that I see in Musk.
As a retired U.S. civil servant (and retired Army officer) I am offended that you blithely assert that a civil servant altering data is possible, even likely: “That estimate may be exaggerating the skew, since it’s done by a former Biden administration employee.” Your disrespect for the apolitical commitment of civil servants to our public duties detracts greatly from your otherwise respectable work. It also reinforces the lies of Trump and Vought who seek to politicize and destroy Federal civil service.
I’m surprised at your indignation and admire it. I figured it was common knowledge that partisan players tend to skew data to meet the parties goals, much like some of us would on a personal level. You obviously do not cheat or skew data but with your work as a civil servant, do you think it’s a common practice for others in that field? I’m very curious to your answer.
Absolutely not common to see dishonesty. We review each other’s work, like peer review. No professional civil servant would risk their reputation and integrity to alter work built on fairly accessible data. There is zero upside to do this and a lifetime of peril. But we also take an oath, like US military officers, to support and defend the Constitution. The vast majority of civil servants take it seriously and work without reservation to uphold that oath.
Unlike SCOTUS justices we must report gifts and risk criminal penalties for lying, cheating or withholding information.
The point is, civil servants are NOT partisan. I worked as a. Civil Servant for Bush, Obama. Trump and Biden. We all did our job exactly to the same standards regardless of POTUS, our boss. Elect Trump and Vought has vowed and already prepared orders to change that.
It doesn't require dishonesty. An observation that is not published or a publication that is not publicized as much is all that it takes to skew results (since all results are statistical and include some random noise).
Likely in every instance, no. Possible - of course. That’s the thing about humans - humanity includes even civil servants - and humanity has its share of liars, cheaters, frauds, partisan hacks and those who make up excuses for putting their thumbs on the scales.
Anyone who reads the news knows that the FBI, DOJ, CIA, IRS, EPA, you name it- have plenty of liars and partisan hacks. And hey, how about that 2020 census! How about the CDC going along with school closing and a ridiculous vaccine mandate for partisan reasons in the face of opposing scientific evidence?
Outside of government, we know employees might be dishonest
and we plan for it- that is why there are controls and surveillance, and most of all, accountability. And of course there is still fraud- some committed by those meant to be watching the hen house. Any manager who asserts that anyone employed in their firm is honest, trustworthy and beyond reproach is a fool and a danger to everyone around them. Systematic surveillance and controls are the key.
Well, you revealed a lot of your biases in your COVID criticism. Just think for one quiet minute about a death toll of ONE MILLION citizens. That you dismiss CDC recommendations in the face of that awful cost explains to me at least why you think government employees lie. Oh, and as a science PhD I’ll take you on line for line on your so called “scientific evidence “ against COVID protections. My data will be peer reviewed, of course.
Respectfully, OP.
The CDC had the teachers unions write the first draft of the school closings policy. This after numerous studies and most responsible countries supporting school openings,
Biden’s “vaccine mandate” was implemented for the military in August 2021 by OSHA in November of 2021. This was after the vast majority of the population had already been vaccinated or had been infected with Covid (or both) and after the emergence of the Delta variant which was not as susceptible to the original vaccines (by the time of the OSHA rule, Omicron was becoming prevalent).
Here is a study from the NHS conducted in 2021 on vaccination vs transmissibility of Delta (this was after several studies in mid-2021 showing vaccination’s reduced effectiveness vs Delta):
https://www.nejm.org/doi/full/10.1056/NEJMoa2116597
“…The reductions in transmission of the delta variant declined over time after the second vaccination, reaching levels that were similar to those in unvaccinated persons by 12 weeks in index patients who had received ChAdOx1 nCoV-19 and attenuating substantially in those who had received BNT162b2….”
School children were abused and servicemen/women were sacked in measures based upon partisan hackery meant to please Biden’s gullible base (ie you) and punish enemies (school parents and children).
The military didn’t lift its mandate until 2023. Insanity,
How can you not know all this? I suppose a tadpole doesn’t realize water is wet.
You twist the history and timeline. I was working as a DoD Civilian for the Army when the Services and OPM directed mandatory vaccination of all military and civilian personnel. That was early after the initial availability of the first vaccines. You've warped your narrative forward to the Delta variant. I was a senior supervisor who counseled the Soldiers and Civilians working for me on the reasons for the vaccination directive. The literature was clear and honest about what was known and not known. The CDC did a fine job making hard recommendations without perfect knowledge. That's what non-partisan Federal Civil Service employees do. It worked. Tell me what the vaccine mandate, school closings and mask directives cost us, with facts. I'll tell you that it saved hundreds of thousands of lives. I know many people who died of COVID before and after the vaccine was available. You can't play fast and loose with the history of a deadly pandemic and expect to get away with it. So your outrage seems to be that the mandate wasn't loosened soon enough? That's rich. Do you realize that Service personnel have a requirement to take several vaccines and even more for regional-specific deployments. It's part of the freedoms Servicemembers surrender when they join the military. Does that bother you too?
My goodness-
No wonder our government is such a joke.
https://www.cnn.com/2021/08/25/politics/us-military-covid-vaccine-mandate/index.html
https://www.npr.org/2021/11/04/1048939858/
Couldn’t agree more - as a former civil servant.
What is happening to inflation under these deficit reduction scenarios? Even under the deficit reduction scenarios analyzed here, could we also see a rise in consumer prices and still high interest rates due to Trump's tariff plan?
That's harder to say, but generally, if you get a big reduction in demand and a rise in unemployment, inflation falls. But since inflation is already back to around 2%, falling further could be dangerous.
But the Fed is not supposed to let there BE a reduction in demand and a rise in unemployment and a fall in inflation. J Powell is not Bernanke-Yellen.
Things like tariffs and VAT hikes generally result in a one-off rise in the price level rather than perennial inflation.
"I don’t like the way he plans to go about it — giving massive awards to himself (Musk) and his own lofty social stratum, while inflicting pain on the masses".
I really would like to be able to understand what motivates guys at this level of wealth. Like, IMHO, the first $10-20M of net assets give you a topnotch lifestyle where almost nothing is out of reach. Around $100M, you get "fuck you money" (unless your business is entirely relying on a few customers). Above, you start accumulating political power without having to be elected.
Musk, Gates, Soros, the Koch brothers - they were able to impose their views of what society ought to be without having to ask us for our votes. That's something I view as problematic but YMMV.
But if Musk gets to be the shadow President, he's got all the fucking power in the world. What would he need more tax cuts? What would $300B get him that $200B doesn't get him? I don't get it.
Power.
Right. But more power than the Presidency? More power than $200B?
At this level, his ability is constrained by his capacity to source technical talent and organize others to execute his plans, not by funding.
AFAICT, there is no difference between $200B and $300B... unless he wants to buy 2 other twitters... but even there time seems like a bigger constraint than capital...
If we're talking about Musk, he can't be President.
And yes, more power than hundreds of billions of dollars. Money isn't power on its own, it is converted into power. The actions you're responding to are exactly that process of converting money into power.
Aside from this, when you reduce spending this dramatically, there tends in practice to be a structural element to it that can cause some serious long-term economic damage. As governments try to make the numbers add up whilst avoiding political damage, they make sub-optimal decisions that can reduce investment, limit state capacity, and bake in some perverse incentives. Once you've done that, you can find that reversing it is not so easy because you also have to solve the extra problems the cuts created in the first place.
Examples of that would be when you limit a department's productivity because you've cut "superfluous" administrative staff while pushing their workload onto people who should be doing other things. Then even if you try to increase the department's budget later, you have still lost a bunch of organisational memory. Or when badly thought-out means testing for benefits creates some really janky effective marginal tax rate cliffs. As a result, instead of just cutting taxes later, you also then have to sort out your Kafkaesque welfare system.
To bring this down to earth, ask people to imagine how their lives would change. Paint a word picture of how the world would be different for most people under Trump and Musk's plan. Make your picture short enough for an average person to read and imagine it.
Also, Trump claims that we are an "occupied country" -- occupied by invading immigrants and criminals. Ask people how that "occupation" manifests itself in most people's lives. I'm sure most people would say there is no such manifestation. Then ask how the day-to-day world would change if Trump took some action to eliminate the so-called occupiers. The big change in most people's lives would be more police and police-like forces nosing about. It wouldn't be pleasant. Ask people to imagine living in such a world. Is that what they really want?
They won't believe you. Musk and Trump are geniuses, dontcha know?
And they hate liberal elites more than I can understand. But they'd align with Xi, with Putin, with anyone as long as they promise to destroy the liberal elites.
Noah, I am concerned that you are normalizing a Trump victory in your latest posts. After saying 'the free world teeters on the edge of a knife' (which is completely accurate), you are now talking about Trump winning in terms of 'we are all going to be really stressed out' and 'the policies for austerity are the wrong policies'. Those characterizations seem ... let's say pretty weak ... compared to how you have previously spoken.
The projections for job losses from Trump's plans, even before Musk came in to basically say 'we are going to eliminate more money from the budget than all discretionary spending put together' are severe enough that I think most economists should be saying "this is a terrible direction for the country's economy".
Still waiting for someone to explain to me why the federal government of the United States, as the monopoly supplier of dollars, needs to borrow back the dollars it has spent into existence in order to "finance" its creation of any additional dollars it wishes to spend.
I'm also still waiting for someone to explain to me we can't make the hysteria about the federal "debt" dissipate immediately by referring to it as "private sector savings, and do the same with respect to the "deficit" by referring to it as the "public sector surplus."
BTW: If Trump is re-elected, and begins to ratchet up both the (fictional) "deficit" and the (fictional) "debt" by cutting all sorts of taxes without also cutting government spending, I predict, with absolute certainty, that Veep Vance will immediately hit the stump to repeat, endlessly, the immortal words of that other vile prick of a VP, Dick Cheney: "Deficits don't matter." And that will put an end to hysteria about the debt and the deficit once and for all (since, as Trump as suggested, we'll never have to have another election after the one next week).
The truth, the whole truth and nothing but the truth. The top tier insists we proles must obey our betters, and such questions are not open for consideration.
An unfortunate reality is that whatever plan is put in place must be effective within one administration or, more likely, two years of one administration. The odds of a 30-year plan surviving a change of one administration not to mention up to seven administrations to show any effective benefits are slim to none.
Reading this post, I found Musk's plan DEEPLY offensive. I realize that we are talking about two separate plans: Musk is only really talking about spending cuts and Trump about tax cuts, but comibining them yields the result described in this post: services like Medicaid and ACA subsidies for the most vulnerable are cut, and the affluent Americans get another tax cut. The difference between this and Reagan;s tax cuts is that Reagan was cutting from a much higher tax rate. He also cut taxes in several steps: first, from 70% to 50%, then increased Social Security taxes on everyone, then did a tax reform which finaly cut the top rate to 28% and created a dual rate system of 15% and 28% (with a parallel AMT system of 26% and 28%). The whole project took over 6 years and it was passed with wide majorities in Congress. This plans smacks of the "wealfare queens", "let them eat cake" Marie Antoinette. There is NO discusion about entilement reforms. In short, it takes a system where we redistribute wealth from young to old and redistribute it some MORE from young to old. Does Musk realize that a lot of Trump supporters rely on government programs like disability payments and Medicaid? Fortunately, this will never pass in Congress.
To add to this, the math does not even work because we will likely need a (small) increase in defense spending, and some increases in R&D spending (which Musk is in favor of and so am I). Ad we probably do need to pair down the federal government some. I would be in favor of gettimg read of the Dept. of Education - we don't need it. But putting this in perspective: the last serious deficit reduction effor was the Budget Control Act of 2011. This was passed essentially under duress (the infamous debt ceiing standoff between Obama and the Tea Party House Republicans), but in the end, both Houses passed it and the President signed it into law. It planned about $2 trillion in spending reductions over 10 years! The Act worked for about 4 years after which the leadership of both parties quietly scrapped it.
I’m all for the audit, but we should be looking for efficiencies instead of cost cuts. Are we spending the money wisely? My guess is we are not. If we were, we could deliver more and support growth in the economy through infrastructure improvements and a more capable workforce. I liked Josh Shapiro’s “Get Shit Done” approach they used to repair the collapsed I-95 bridge and how they are using that model for other initiatives. Changing the government contracting process itself to something more like the private sector could lead to higher productivity pretty much immediately.
One thing is absolutely certain -> Under a Trump 2.0 regime: The very wealthiest, the top several hundred billionaire oligarchs, will see their wealth grow enormously. The bottom 95% of te US public will see their assets shrink dramatically - they will be impoverished in order to make Trump, Bezos, Musk and the rest of the corrupt oligarchs phenomenally wealthy.
Elon's plan is to create so much chaos there is no time to focus attention on his personal activities and investments. By the time the smoke has cleared and the fires are out, he'll be long gone. Not a ten-year plan. Zero accountability.
Just let the Trump tax cuts expire. It's not that hard
Is the “fly in the ointment” really the lede? My takeaway from this is that US overperformance vs other countries is mostly a function of higher, unsustainable, deficit spending.
Doesn’t that put the accomplishments of the US economy in a different perspective than you and others have described (a sign of American fundamental strength or bidenomics or something else?