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What are your thoughts, Freeberg, on the
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kurfluffle, the Donny Brookke, the
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bruhaha between Elon and President
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Trump? There's a lot of people that are
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making accurate declarations that
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federal spending needs to be reduced,
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the deficit needs to be shrunk, we are
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in a debt death spiral, and they are
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absolutely correct. So, I don't think
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that Elon is off the reservation when he
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makes those comments and he's talked
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about this continuously and he dedicated
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months of his life to operating Doge and
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trying to bring to light some of the
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extraordinary operating inefficiencies
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in the federal government that should be
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addressed and I think, you know, we'll
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see what happens. Jury's still out. for
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those actions to get permanent, they I
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believe need to mandate them in a
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appropriations bill. And the White House
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has publicly declared that they are
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going to move forward with an
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appropriations bill to try and cement
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some of the Doge actions. So I'm
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hopeful, but I think Elon's right with
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respect to the spending. I will provide
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the voice I have heard publicly stated
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from the alternative view from the White
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House, which is this is not the bill to
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do that because it mostly focuses on
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these mandatory spending programs and
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they are addressing cost savings to some
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degree in these mandatory spending
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programs while keeping the tax rates
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where they are or reducing tax rates in
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some cases which the expectation is will
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stimulate GDP growth. So the White House
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view is also a view that you could look
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at and say economically I could see a
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path here that does make sense. You're
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reducing spending only on mandatory
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programs. You're going to come back with
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an appropriations bill to address
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discretionary spending. And then the
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final kind of action that the White
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House might take which we've heard about
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separately is empoundment that at the
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end of the fiscal year they may come
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back and say all the money that we saved
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by not spending it we can actually
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recover through empoundment. And the CBO
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has not accounted for tariff revenue.
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And just looking at the recent deal done
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with Vietnam, Vietnam's about $130
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billion a year of uh imports to the
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United States. And they did a deal that
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they announced two days ago with a 20%
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tariff on Vietnam, which you know, if
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Vietnam's import volume does not
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increase, is about 26 billion a year of
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incremental revenue for the federal
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government. So there's an argument that
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Bessant and Lutnik and others are making
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that you guys have failed to recognize
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that we've got a few other things we
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have up our sleeve that we're going to
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do. We're going to do empoundment. We're
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going to do this appropriations bill.
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We've got more revenue coming in. Net
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net. We will get the deficit down to
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where we need to be. In fact, Scott
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Besson was on TV saying over and over,
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we're going to get the deficit below 3%
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of GDP, which is the key target here.
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But the immediate reaction to this bill,
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I think that Elon is having is the same
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that I've had and it is the same that
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Senator Johnson had and is the same that
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many others have had, which is what the
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f are we doing? We are in a fiscal
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emergency in this country and we're not
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addressing it. So, I think both points
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of view can be valid and both sides can
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have a good kind of argument for why the
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bill should be passed and why the bill
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shouldn't be passed. The White House has
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declared that this is the only way
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they're going to get some of the
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programs done that they believe they
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need to get done. for national security
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like the ICE border stuff and these are
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things that they believe they need to
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get done but a lot of folks are looking
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at the numbers and saying this just
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isn't enough and you're now increasing
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the deficit by cutting taxes. One of the
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things the CBO does not do though is
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they don't have a strong model and
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there's a ton of economic debate on this
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point which is how do tax cuts stimulate
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GDP growth and job creation and income
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growth for people with jobs. The one
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argument is when you cut taxes, more
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dollars flow into the economy, more jobs
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are created, more businesses are
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created, the GDP grows, income for other
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people grows. The alternative argument
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is it's a tax cut for the rich. What are
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you doing? They're going to put that
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money in their pocket. It's only going
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to benefit themselves. So that's I think
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a key crux in the argument that you'll
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never get to a resolution on. The one
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side will use that one argument and the
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other side will use the other argument.
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So look, I mean with respect to Elon and
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Trump, I will say one thing very
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importantly. I don't think MAGA can
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exist successfully without the tech
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alignment. I don't think tech can exist
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without MAGA because of the government
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alignment and the importance of the
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government allowing these new
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technologies like AI to come to market
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and to proliferate. I don't think that
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these two can exist in isolation and in
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conflict with one another. Elon is the
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de facto king of tech. he is the person
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that is saying look if I'm in conflict
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with Trump tech is in conflict with
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Trump or that at least that is the
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perception on the MAGA side and I think
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that that is very risky for both sides
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to allow a conflict to kind of endure
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and I do think that both sides have
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heads that are going to be cooler that
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will prevail here and I do think that
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these two are going to recognize the
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importance of being codependent if you
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will in being able to progress their
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respective agendas. Chimath, your
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thoughts on the kurluffle
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seem to be winding down and maybe
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reaching some sort of endgame. It feels
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like we're in some sort of an endgame
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here. And if there is one, what is it?
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I mean, I think it's just important to
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recognize that on the one side you have
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the most powerful person in the world
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and on the other side you have the most
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important powerful entrepreneur and
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richest man in the world. And when you
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have people that are that accomplished,
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it's not as if you're going to get along
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100% of the time. So I think a lot of
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the breathlessness around all of this
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stuff is overblown. I think the reality
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is that when push comes to shove, I
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think that they agree on more things
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than they probably disagree.
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And I think when everybody realizes that
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the alternative is essentially
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some insane form of socialism and
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redistribution,
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I think the alliance will hold
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and that they'll find some common
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ground. Jason, what do you think? Well,
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I think you're right. These two
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individuals are used to speaking their
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mind and they're both really good at
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social media and then there's no better
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media cycle than covering the two of
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them battling it out and trading barbs.
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But I think what Elon did this cycle was
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really interesting. He started a
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preference stack
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for Trump and that cascade, preference
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cascade, preference stack, however you
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want to phrase it, you know, I think
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played a large role, if not the role in
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getting Trump elected. People can debate
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that. I don't know that you can
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perfectly know what that $250 million
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and all that effort he put in, you know,
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what that did in terms of Trump's
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chances. Trump probably would have won
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anyway versus Kamla, but maybe not.
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Putting that aside, the platform Elon
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has refined during this political cycle
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is one that resonates and I think it's a
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really good idea for him to maybe if
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he's going to be involved in politics,
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pull that string and just crisply define
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it. And I was thinking about it over the
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last couple days and I think it hits
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into four basic groups. Balance budget
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and government efficiency. That's kind
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of one. fiscal responsibility,
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sustainable energy, which obviously he's
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been passionate about, and he's the
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leader in solar, batteries, EVs, and
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then manufacturing in the United States,
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which he also is the leader in, and
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pronatalism, and just, you know, the uh
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the population crisis. He really cares
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about those four issues. So what I think
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he should do is take that America pack
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and instead of making it like just pro
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MAGA, he should just clearly define what
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it is that he believes. Small set of
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issues and then he should go and back
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the people who are running to to be in
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Congress and senators and just say,
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"Hey, here is what I would like you to
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be in favor of." And do what Norquist
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did with his no new taxes pledge. Do
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some sort of pledge like that. I don't
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know if it needs to be a new party, but
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just really crisply define what matters
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to him. If he's going to be involved in
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politics, then get people to agree on
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it. And if he wants to give them
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donations, as is his right, as is his
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pack's right, to raise money, he could
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represent, I think, a very world
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positive view. Sustainable energy, just
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incredible execution, and a really
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efficient government. He should
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technical excellence, technical
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excellence, excellence at large, and
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America. Just go for it. and and and it
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doesn't have to be personal against
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Trump. One of the big problems with
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Trump is he he has a bunch of sick
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offense around him and the more you kind
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of appease him and just blindly follow
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him, I think the closer you the
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perception is that's the closer you get
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to him. I don't know that that's true. I
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think he likes debating stuff. So, I
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think he should embrace the people who
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debate it with him and then those people
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should just crisply say here's what I
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stand for and I'm putting my money
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behind it. I hope we're in alignment,
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but I'm going to stay in my lane and I'm
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going to prioritize what matters to me.
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And Elon's priorities are exceptionally
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sharp and well- definfined, and he
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should pursue them. Yeah. Jury's out on
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where this ends up and the broader
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picture. You guys will get annoyed
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because I've talked about Ray Dalio so
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much, but I think he's done an amazing
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job in the last 5 years basically
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explaining everything we've seen from
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global conflict to the internal
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conflict, the rise of socialism in the
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US and the relationship to the debt and
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deficit cycle. He just posted on Twitter
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yesterday that he went to DC to discuss
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the budget deficit with senior people on
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both sides of the aisle. and he said,
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"It's clear to me that we are unlikely
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to change the debt trajectory we're on
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and avoid the painful consequences." And
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he talked a lot about this concept of
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absolutist politics. And this is the
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same reaction I've had every time I've
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gone to DC and we've met with members of
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Congress. And if you guys remember from
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the beginning, I said Doge isn't going
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to be it. As much as Elon can identify
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and resolve to a better way of operating
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the federal government's agencies, you
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cannot change the spending without a
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change in statute from Congress. You
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have to get Congress to act. And every
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time I met with members of Congress,
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their incentive is to keep the money
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flowing to their districts. That's what
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they focus on. And every year their
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districts want more in different
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contexts, in different forms, through
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different programs. And that's what
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their job is. Their job is to go to DC
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to represent their state's interest or
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their local district's interests and say
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we need to make sure that we're taken
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care of as the money flows. And as a
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result, everything keeps getting bigger
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and bigger and spiraling away. At the
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end of the day, the way we economically
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save America, if we even have a shot
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without money printing, which a lot of
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people like Bology and Dalio and others
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are now indicating is what's going to
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happen is we're going to end up
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inflating away or printing away all of
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the debt that we've taken on is to get
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to a 333, which Bessent has highlighted
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is also his goal. 3% federal deficit to
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GDP, 3% GDP growth, and 3% inflation.
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And just to give you a sense of where
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those numbers sit today, the current
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estimate is 6% deficit to GDP, 2.4%
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inflation. So we've actually got a
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little bit of room to run on inflation.
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And GDP growth this year of 1.4%.
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So will the tax cuts in this bill
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increase GDP growth? Will AI increase
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GDP growth? The jury is out. Will the
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tariff revenue reduce the deficit more
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than the CPO is estimating? And the
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increased GDP growth reduce the deficit?
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The jury is still out. And what will
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happen with inflation? And if the Fed
00:11:47
cuts rates, you're going to see
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inflation climb a little bit more. Maybe
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the tariffs effect on inflation will
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still come through. Some folks have said
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that hasn't hit yet, but it will come
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later this year. Will we exceed 3%.
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Inflation TBD. So the jury is still very
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much out on whether these actions that
00:12:03
are being taken, which Bessant has
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declared is going to get us to that 333
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number. But then a lot of folks who are
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looking at this with a cold stare with
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like no political influence with no
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political intention not representing a
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party not representing an administration
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like Ray Dalio are saying what the there
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is no way we're going to get there.
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Bology I think you know pointed out in
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his tweet his point is actually a very
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good point which is our debt is not just
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the federal debt but there's other debt
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that we're not even accounting for.
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consumer debt. I've said this in the
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past. There's there's actually corporate
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debt. Yeah. The business debt, consumer
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debt. There's also state and local debt.
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And then the one key number that we
00:12:46
never talk about is the unaccounted for
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liabilities in public pension funds,
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which is on the order of trillions of
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dollars more. So when you add all of
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this up, someone's going to pay the
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bills on all that debt or we're going to
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have to inflate away that debt by
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printing money. And at some point, the
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trains left the station. A lot of people
00:13:03
are saying, "We're done. There's no way
00:13:04
out of this. So, you know, the Elon
00:13:06
Trump battle is like an interesting kind
00:13:09
of side kurfuffle, but it's not really
00:13:11
the big story here. The big story is the
00:13:13
trains left the
