How the US Debt, Deficit, Economy and Taxes Will Be Fixed

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Commerce Secretary Lutnick describes how the US Debt, Deficit, Economy and Taxes will be fixed.

The US has been spending $6.5 trillion but taking in $4.5 trillion with a $2 trillion deficit and $37 trillion in debt.

However, the US has $500 trillion to $1000 trillion in assets.

DOGE will cut $1 trillion of waste, fraud and abuse.
Lutnick will increase government revenues by $1 trillion.
This will balance the US budget.

$200 billion out of $1.2 trillion of Covid PPP money went to China fraud gangs. This was known and proven but there was no effort to stop that fraud because of lack of incentives.

Lutnick is going to adjust the GDP calculation for the last 25 years. They will remove the unproductive of what is currently included in GDP.

There was no income tax before 1913. Income tax was started for WW1. There was no removal of income tax after WW1 as the US rolled into the great depression and then WW2.
After WW2 the tariffs was lowered for other countries as they were rebuilt.
After the other countries were bailed out, the tariffs were left at favorable levels to other countries.

The tariffs are targeted at industries and companies can be brought back to the USA or purchased from others in the USA.

The reason US software has not been updated since 1975 is that government accounting was changed that forced government agencies to pay for ten years of software up front.

Google, Amazon, XAI/Tesla and other technology are building all new software for free for the US government. Why do this for free? They will then be able to make the same and integrated software for all of the other countries in the world.

The US sovereign wealth fund will be guaranteed returns. The US government will buy from various companies and those contracts will boost the value of the companies. The US government will take 20% warrants from those companies. If the US government buys huge vaccine orders and that triples the companies value, then providing the US government warrants lets US citizens benefit from the value that is created.

Lutnick’s $1 trillion of revenue will be getting rid of Tax and other scams (cruise ships, maritime ships, Ireland), Gold cards (1 million or so) and tariffs.

Ships will not be able to flag with Liberia and pay no taxes or fees in the USA.

Once the budget is balanced and Lutnick and Elon each do more than $2 trillion combined then at least no taxes for anyone making less than $150,000 per year and possibly no income tax at all. About 85% of americans make less than $150,000 per year.

Bessent says
1. They will reduce the spending at a rate that will not cause a recession. They will get to a 3% of GDP deficit. Every $300 billion/year of spending cut is 1% of GDP.
2. Re-order international trading system (using tariffs) to get jobs back to the US.
3. Low and predictable taxes, slash regulations, predictable regulations and cheap energy. Get 1.5%+ or more in GDP growth.

23 thoughts on “How the US Debt, Deficit, Economy and Taxes Will Be Fixed”

  1. BTW one , actually a big reason the Japanese and the Chinese were kicking the US ass in manufacturing was they own their own central banks and don’t have to borrow money from anyone. They channel immense sums of cash to industrial and infrastructure use and can create the cash from nothing. The West, we have to pay the central banks. Another huge scam.

  2. Trump and Elon are cutting a lot of serious fraud and waste but…no doubt the wealthy will benefit far above the middle class and a lot of programs will be cut that are needed. Unfortunately many of those programs instead of doing what they were supposed to were looted and channeled into politicians and their supporters pockets.Have any of you ever looked at the money they “spent” on the homeless? It’s an incredible fraud. They could have built apartments for every homeless in the country for a few years worth of the money spent but instead we have people living on sidewalks. it;s a scandal.

    As for the debt it is mathematically impossible to pay it off. Why? Because ALL money is created with debt from the FED private bank. So how can you possibly pay off debt…with more debt? You can’t. It’s impossible. Some have looked at this, seeing as how it’s unsustainable and reading the various global organizations publications say that the plan was to redo the whole banking system into some other asset swap where each country would have so much cash based on GDP. This of course was, I believe, what the economist Keynes wanted. I don’t think this will happen.

    A thought. I wonder if the sovereign wealth fund is a trick to create money “without” going through the FED tip off system. The last person to do this by issuing silver certificate backed currency, Kennedy, well you know what happened to him.

  3. My proof that this will, most likely, not work:
    Trump and Musk are no gods, they know how to run a business (although Trumps backrupcy records are not hopefull) but not a country. A lot of economists say that it will not work and a few say that it will. Both cannot provide any definive answer because we simply do not know, its simply never tried.
    If you do not have proof / examples / calculations on to get something complex to work , there is only one way to get it to work. Fail repeatedly until you figure it out. See SpaceX rockets for instance.

    The only issue is, their doing it with the US.

  4. virtually none of these savings will happen, and Trump has a long history of tax cutting mostly for the wealthy, so eliminating income taxes under $150k/year won’t happen either, but tariffs will make everything more expensive – most recently cars – for the middle and working classes (virtually indistinguishable to the top .1% that makes these policies).
    Trump/Musk are mostly losing in courts & where they succeed in cutting it just makes government LESS efficient, will lead to more pollution, sickness, disasters and corruption, tax-cheating which the neutered IRS won’t be able to catch, all leading to MORE expense, not less for the government and ultimately for the taxpayer.

  5. It’s very clear Lutnick can talk and knows how to sell his stuff. But how much of it is actually realistic?? Eg Somehow it’s taken as obvious that anyone who complains about being cut off from welfare is a fraud. This seems like complete baloney to me. I’d say it’s more likely the other way around. He says they can do 1 Trillion in cost cutting and 1 Trillion in earnings from tariffs without so serious consequences that the country will regret it. I’m no economist but I have strong doubts. If he’s right then great. But I am not optimistic.

    Meanwhile, much of the Trump agenda is clearly based on pure fantasy. Thinking that climate change isn’t worth doing anything about is No 1. Then denying a whole class of people (trans) exist to make life simpler is pure religion inspired bigotry. I’m all for making sports fair but that’s a side show. Gender dysphoria and ambiguity are empirical facts, almost certainly based on biology, not culture. The real world seems just a little too complicated for some people it seems. But for a government to ban mention of it or scientific research on it really brings the US back to the Dark Ages. Did anyone mention the world isn’t flat?

    • The people exist, they’re just not the gender they claim to be. It’s obviously an opinion if you choose to define gender based on what you feel like, I’m tired of hearing people claim that “ThE sCieNcE” backs up transgenderism.

      • Just worked out the very simple reason Lutnick and now Musk keep saying the complainers are the fraudsters. They’re trying to shut everyone up!! No joke. Talk about Soviet style propaganda! The US has become a very scary place.

    • Just worked out the very simple reason Lutnick and now Musk keep saying the complainers are the fraudsters. They’re trying to shut everyone up! George Orwell had nothing on these guys. The US has become a very scary place.

  6. Consider the burden on America’s economy the Federal Government imposed 6 months ago.
    Then try the same for 6 months from now.
    The cost of energy will be down. Stupid rules, regulations & reports will be down. Girls will have privacy & the top of the medal stand. Maybe, those god-awful drug commercials will be gone, along with fewer opioid deaths. Maybe $5T worth of foreign investment is in full swing.
    We’ll have a real Spaceship.

    • Hope so, but look at all the traction the courts are getting against the EOs just trying to keep the rainbow Klingers in the military.

      I see the DOE is back at it with $900M of SMR funding. Wish they would just knock that off – dev is a waste. Oklo now wants to build a 50MW LWR (Hello? NuScale).

  9. All the slashing has nothing to do with cutting the deficit or balancing the budget.

    The proof of the lie is, though they’re slashing federal expenditures in the name of reducing the debt and deficit, they’re going to gift the top wealthiest people with a tax cut greater than the “savings” they’ve made, leading to more debt.

    The recently passed funding bill that runs through September included permission to add an extra $2 trillion in debt.

    If every single federal employee — including those in the postal service, were fired, zeroed out, it would “save” just under $300 billion per year.

    All the cuts being done are being done with one goal in mind, to offset $4.5 trillion in tax cuts.

    The last time this was done under trump ~85% of savings went to the top ~1% of Americans.

    And it added $4.5 trillion to the debt.

    In exchange for transfering trillions of dollars in wealth up to the top 1%, the rest of Americans are getting cuts to cancer research, medical access, infrastructure repairs, school funding, Intellegence gathering, etc…

    If the admin was honest about why the cuts are happening, they wouldn’t be digging a deeper hole by cutting taxes for the rich.

    Again.

    There are ways to create new revenue without creating inflation in our economy.

    A little while back I outlined a way to raise ~$1 trillion per year through the issuance of a stable coin based on minting a trillion dollar coin to be permanently held by a coin bank as collateral.

    Selling an American backed, collateralized stable coin, pegged to the dollar, would create a nearly $1trillion profit used to pay down debt, and fund foreign expenditures.

    There are ways to address the deficit and debt without slash and burn tactics.

    But, some easily distracted people enjoy the blaze and chaos, no matter the destruction that results.

  11. This is just fantasy. Lutnick will add $1 trillion AND nobody making less than $150k will pay taxes? What happened to the Republican Party that screamed about half the people not paying taxes?
    Musk will cut spending by $1 trillion? Maybe over 10 years. Musk will not cut spending as much as the forthcoming tax cuts will cut revenue. AND the Trump created recession with further cut revenue.

  14. Trump Administration Abruptly Cuts Billions From State Health Services
    More than $12 billion in federal grants that were being used for tracking infectious diseases, mental health services, addiction treatment and other urgent issues were canceled.
    ..from NYT…..

  15. As much as I like this site, Brian at times reveals how much of a nerd he is. He remains strongly optimistic in nearly all things but seems able to spot scams in the scientific world accurately. In the realm of politics, maybe not so much. I and nearly all other citizens would love love love to see these predictions play out as proffered, but my take is not……as hopeful as Brian’s.

  16. “$200 billion out of $1.2 trillion of Covid PPP money went to China fraud gangs. This was known and proven but there was no effort to stop that fraud because of lack of incentives.”

    Well I hope whoever was in charge back then doesn’t come back and get any second chances.

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