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I just want to highlight the CBO projection right so this is the US government's debt as a percent of the US
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government's Revenue which you you indicate in your book is more important than debt to GDP you've got to look at
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the actual Revenue being generated by the government and how much debt they have and the CBO highlights this
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expansion to 700% meaning the government is going to have a debt level that's seven times the income it's making every
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year over the next uh I believe this is a 10-year chart and you propose a bunch of actions that can keep it flat over
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the next 10 years so number one is I call it my 3% solution the solution is you must cut the deficit which is the
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equivalent of bonds selling down to 3% of GDP and it's 7 a half% expected that's
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about 900 billion a year yeah roughly and that means cutting it as you point out by cutting the deficit by more than
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half from where it sits yeah well it's yes because it with the continuing the uh the tax cuts strum tax cuts that's
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that'll be 7 a half% and you want to get it down to three it sounds Draconian but
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we did that kind of change from 1990 1 till 1997 and there are three keys to this do
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it soon fast when the time is good when the economy is good in other words do it
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now now the Temptation is going to say well we're going to ease into this and we're going to be there and we're going
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to do it in three years from now but if you have a bad economy you you cannot do
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it okay and that's the that's the worst so we have the best economy and the sooner you do it the more you're going
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to do it so 3% solution do it now and recognize that you have to De deliver it so if you're
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having let's say Cost Cuts in government you have to own the number so everybody's got to
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pledge 3% now the the the argument say now to get there but you have to own the number um so much so that you'd say if
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it's not 3% throw me out of office and you can't make it any one thing right but you also have to realize
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like if you did it spread out nothing's going to be insurmountable but the main thing is you take the things you can cut
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from or build from so what can you cut from and you look at government expenditures roughly 70% of government
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expenditures are you can't cut cut so so it comes down to a small percentage that
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you can cut but you you find out how much can you cut so the important thing is 3% the other thing about it is to
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realize that if you make those moves the bond market will benefit you see this and so interest interest rates
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will go down right and interest rates going down interest rate expense is most important if the federal
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government were to cut spending significantly and quickly the market would naturally react to lower rates
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that's right I think that is so important for everyone to hear if you look at my calculations if you get 100
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basis points cut in rates that's equivalent to significant cutting in spending so he's right but you but if
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you do that without the other parts you're going to make it less desirable to own these things these bonds and
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because that's that's going to be a problem where if you do these things together they can support each other so
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in other words fine cut it from spending and by the way Ray the longer we wait the more interest accumulates because
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it's at a higher rate the more the debt accumulates and ultimately this is the arithmetic death spiral that you get
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into the longer we wait the more you have to cut in the future to get out of the hole it's not linear it's a
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nonlinear cutting that's needed So the faster you do it the less you have to cut I think that is so important let me
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just say that again for any person in government listening the faster you cut the less you have to cut yes and you can
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do it in a manageable way you know a bit here a bit there these bits add up and if you don't you're going to have this
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Arc of compounding so let's talk let's talk politics for a second is Doge and the concept of Doge enough or do we need
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legislative action here there's a combination of a question it's not just Doge it's a matter
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of less regulation productivity changes that might come from AI which then have translate to
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profits that might be capital gains profits they might be profits and all of that and
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so but it really you know when I look at it it looks it looks very tough and and but
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there's also you know Revenue also tariffs produce Revenue so but yeah people think um on the on the tariffs
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people don't think of taxes as inflation but taxes are inflation right because you it costs you more
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so the real question as you play with the numbers is it's very very difficult to know and be precise about how much is
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going to come from uh productivity and profit increases from the efficiencies gained by Ai and new technologies how
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much going to come from this and that we don't honestly know but the important thing is we're at the edge and not to
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make it a crapshoot so and to get the if the number must be 3% and so you should
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have a clear passage to that 3% number