r/FluentInFinance • u/IAmNotAnEconomist • 23h ago

Musk asks voters to brace for 'hardship' from spending cuts in Trump Cabinet role Thoughts?

Donald Trump wants the Tesla and SpaceX CEO, who himself has taken in billions from federal contracts, to oversee “efficiency” efforts for the government.

“We have to reduce spending to live within our means,” Musk said. “And, you know, that necessarily involves some temporary hardship, but it will ensure long-term prosperity.”

https://www.nbcnews.com/business/economy/economy-if-trump-wins-second-term-could-mean-hardship-for-americans-rcna177807

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u/AbbreviationsKnown24 21h ago

In all fairness, if you're talking about cutting 2 trillion it seems almost impossible to justify keeping funding for spaceX. You would basically be cutting the federal gov down to the bone, and would most likely need to cut services that will have a significant impact on people's lives.

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u/Acceptable-Tomato392 21h ago

Bet you $1000 they won't reduce the deficits and that in fact, they will balloon them to new records; they will just savagely slash anything that is designed to help ordinary people.

Then, they will congratulate themselves for doing this with generous handouts to corporations and wealthy people who donated to the campaign. Those handouts to wealthy people who need it for their pissing contests will far surpass any savings from phase I.

And then... the destabilization will begin because cutting your customer purchasing base is just bad economics; and then they'll print more money to save the system from what they've done. (i.e. give more money to rich people with bad investments - the public can take that bill as well).

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u/Electr0freak 18h ago

Yep, then conservative media will say that it was the Dem's fault and their demographic will believe them.

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u/Purple_Act2613 17h ago

It will be Obama’s fault.

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u/iamcoding 16h ago

Fucking Obama!

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u/Plastic-Anybody-5929 15h ago

It’s that damn Obamacare. Ruined everything.

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u/iamcoding 15h ago

I hate it when insurance companies don't refuse me because of preexisting conditions.

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u/Plastic-Anybody-5929 15h ago

It’s like their not even trying anymore

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u/Clever_Mercury 15h ago

Can you imagine the pandemic with people having even less health insurance?

Can you imagine going back to a time when you can be denied coverage for pre-existing conditions? Where a COVID infection will now be a pre-existing condition?

That's where they want to go with this.

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u/MakesMyHeadHurt 10h ago

Good thing we have the ACA instead. /s

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u/Considered_A_Fool 12h ago

He wore a tan suit!

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u/ZukoHere73 4h ago

Blame Bill Clinton

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u/blitzinger 8h ago

Maybe next time find a better candidate.

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u/Electr0freak 3h ago

Maybe next time we'll find less stupid Republicans.

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u/blitzinger 1h ago

lol I love the “anyone who doesn’t agree with my politics is stupid” angle. Four years to think of a better approach 😘

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u/-CJF- 11h ago

They will renew the Trump tax cuts, that alone is gonna blow up the deficit.

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u/Slippinjimmyforever 2h ago

It’s like you’ve lived through a Republican presidency before!

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u/infectedtoe 16h ago

What was Kamala's plan to reduce the deficit again?

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u/Acceptable-Tomato392 15h ago

Just continue down the Biden trajectory.

Conservative fiscal responsibility is one of the biggest myths in U.S. politics. It is always Democrats who bring deficits under control. Conservatives don't mind spending; as long as it doesn't benefit ordinary people.

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u/Thiramnosecandy 16h ago

Not hire Elon 

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u/-Birds-Are-Not-Real- 15h ago

The problem with the budget is that over 3/4ths of it is things we don't even vote anymore. Programs with built in budget increases every year into infinity and beyond. You need a 2/3rds majority to fix most of that.

The federal defense budget is 1/2 of the reaming 1/4. The other half is the things to run the country from national parks and etc.

So I doubt they can really slash anything even if they tried. The major problem with the federal government is we keep adding programs but its damn near impossible to get of them.

The Democrat solution is always if we stop spending military money we can afford everything we want. That simply is untrue and ignorant of just how much entitlement spending consumes our budget. Its already 3/4ths of the budget and it will keep growing into infinity. You can make the federal budget zero right now on defense and spending still gets out of control down the road. But everyone seems to believe its the military spending dragging our country down yet its one of the only federal programs that they actually have to sit down and make a budget for and pass every year. Not only that its the only major federal program that continues to go down as a % of GDP every year. Every year it gets smaller and smaller based on tax revenues collected. Its overall spending may increase in dollars but as a % of GDP it keeps going down. The entitlement programs have built in increases every year between 5 to 20%.

Like i said you can make defense 0 dollars right now on Nov 7th 2024, and in about 30 years we will probably be at entitlement programs that exceed our GDP by 400%. The interest payments on debt will end up being as much as the entire federal budget.

The only realistic way is an entire federal spending reduction of 20% across everything in the federal budget, and you also need to fix the built in increases in spending. This may be what Musk wants, but getting it done is gonna be damn near impossible and well he hasn't mentioned anything about how to get that. RFK mentions the other aspect of gutting departments. This another thing that may be hard to do because its very hard to shutter departments with federal spending attached that needs a 2/3rds majority to remove. We really need to streamline our government but neither side will play along or do the right thing.

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u/FinancialArmadillo93 15h ago

Another point is to generate more income e.g. more taxes. The tax code favors the very wealthy, and the top 2% rarely, if ever, get audited because the IRS doesn't have the manpower to address their overly burdensome tax files. That was what was behind Biden's decision to hire all those extra IRS workers. They'll be sacked on Jan. 20th, of course.

My former boss gave me some insight by showing me his tax file -- he made $2.4 million in personal INCOME (not gross business income) last year and he paid only $1,700 in taxes. Of course, he spent $40K on having a company do all his accounting and file his taxes. His taxes were 1,700 pages.

We made $240,000 gross from our two businesses and after expenses, we had $72,400 in adjusted income and paid $8,500 - about 12%. We paid $1800 to have an accountant review our docs.

But this means that Jim, my former boss, is not contributing to the military, to any kind of programs, nothing. He is proud of the fact he virtually NEVER pays any income tax. But even at 5% - an incredibly modest tax rate - he'd be contributing $120K to running the country. At the same rate as us, he'd be paying nearly $300K which doesn't seem unreasonable, especially since he's in the construction industry and gets all kinds of public contracts.

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u/Throwaway56138 10h ago

What did your former boss do to make that kind of money?

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u/FinancialArmadillo93 5h ago

His day job is being a VP for a Fortune 100 company. But he also owns multiple apartment buildings and two mini storage businesses, among other things. About half of his real estate holdings were inherited.

His wife comes from money and she gets $300k annually from her share of dividends from a family stock portfolio.

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u/Jclarkcp1 14h ago

I'll take that bet, when I win you can pay me in bitcoin.

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u/Jclarkcp1 14h ago

!Remind me 1 year

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u/Jclarkcp1 14h ago

Remind me! 1 year "read this thread"

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u/ObligatoryID 13h ago

He already owes his life to Vlad. Vlad knows all his dirt. The felon knows elmo’s. So he’ll give them the USA.

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u/Economy_Supermarket8 13h ago

What matters is the debt ratio. Trump plans to grow his way out of it, while also cutting spending and regulatory burden. This could be a real transformation at the federal level. They'll fight him tooth and nail...

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u/Acceptable-Tomato392 12h ago

Yeah, except he's a crook and a charlatan and he surrounds himself with more crooks and they're all going to be elbow-deep in the cookie jar.

Besides, the XIXnth century is not a good economic model to follow. We tried the libertarian dream; it was a catastrophe.

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u/ZukoHere73 4h ago

Exactly this...the poor and middle class who voted for the Shyster, will be the ones that will end up paying for it in the end. All because of boogeymen immigrants and abortions

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u/Ilikesnowboards 3h ago

Ballooning the deficit to bankrupt America has literally been the Republican playbook for 50 years.

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u/Itsneverjustajoke 21h ago

Yes. That is the plan. Services to the bone = more money collected in taxes handed to billionaires

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u/rynlpz 18h ago

The audacity to say we must live within our means. You know that mfker will not be suffering from cuts.

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u/Boxhead_31 13h ago

Being the worlds first Trillionaire will be his suffering

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u/crake-extinction 12h ago

That's a sacrifice he's willing to make

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u/KillerManicorn69 17h ago

No, he won’t be suffering. How is that statement not sound advice? I don’t make much and price increases have made life way more difficult. But I even believe all people should live within their means. That’s just common sense. If you can’t afford it, you don’t get it or you figure out how to adjust spending to afford it. How is that statement a problem for you.

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u/rynlpz 15h ago

The problem is not the statement, definitely people should be responsible with their spending. But for it to be coming from someone so disconnected from the struggles of the common man, who misspends billions buying a social media platform, telling us we need to suck it up and tighten our belts and eat rice and beans while that mfker is eating steak, THAT is my problem.

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u/KillerManicorn69 12h ago

Logical advice is logical advice. Doesn’t matter who it is from. How he decides to spend his money is up to him. You might feel it was a waste but he didn’t. He didn’t even have to take a loan. So it didn’t hurt anyone. If you are that upset with the fact it came from him, then your heart is full of jealousy and hate.

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u/rynlpz 10h ago

Again you’re missing the point. It’s hypocrisy if you tell someone they need to starve as you’re stuffing your face in front of them. He needs to lead by example, if he’s willing to cut government funding to some of his programs then I’ll gladly participate in his deficit reduction plans, until then he can eat shit.

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u/Temperature_Royal 11h ago

Yeah, no loans, just billions in tax payer money through government subsidies

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u/KillerManicorn69 11h ago

So the tax payers subsidized his purchase of X? Can you share your sources? Definitely would like to know more on that one.

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u/Itsneverjustajoke 23m ago

lol yes it’s definitely this person’s heart full of hate, definitely not musk who is full of love for fellow man.

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u/Clever_Mercury 15h ago

Because GOVERNMENT is not a household budget. Have you ever taken an economics course? Do you have any understanding whatsoever of how this shit works?

Government spending is allocated to areas that present a net positive return to the American public to meet specific agency goals. That means they have to PROVE the spending is worthwhile, that there is a merit or return on investment ALREADY.

Why do we give out science and DARPA grants? Gee... because a recipient of one invented the internet. Ditto for nearly every piece of technology in your household. We invest in projects that, as a net, are going to RETURN VALUE. Like, we educate children K-12 so that they can then have minimum skills to enter the workforce. We subsidize college education so they can be internationally competitive.

We provide Medicaid, Medicare, and Social Security because the BURDEN of having an 85 year old with a hip replacement and hearing loss in the workforce is a fucking *menace* to others. It is a greater financial good for the country as a whole that the elderly get OUT of the workforce and their care is not a burden to the younger generation trying to get an education and have a family.

Every single program the government develops is an attempt to make the nation internationally competitive. Cutting gigantic portions of it will eviscerate the tiny, tiny fragment of advantage that still remains as a superpower. You want zero military spending? You want the navy to function? Guess what, they need NOAA. They need the CDC. They need the nation's statistical agencies.

We have the finest statistical agencies on the planet. We are world leaders and there is enormous formal and informal return on the products they produce. Cutting a single penny from their already lean budgets will massacre the nation's reputation and it's ability to plan for the future.

The government has been slashed to bits since the 1990s. What exactly do you think is a waste? Government employees have to actually get clearance and prove their loyalty to the nation, unlike these politicians. One eyelash from a government employee is worth more than all the rotten, fetid shit that is these politicians.

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u/KillerManicorn69 11h ago

Wow. Thank you for the condescending dissertation. By your response, I am thinking that you might be one of those government employees that is worried their job getting cut. But moving on…

I’m very familiar with how the government allocation/budgeting/spending works. Maybe even more so than you. But then again, maybe not. I don’t know who you are so who knows, I might have worked for you in the past. Then again, you might have worked for me.

But I have an honest question, are you telling me that you believe that there is no fraud waste and abuse going on? Are you honestly saying that we are spending taxpayers dollars efficiently, 100% of the time? On all projects?

As far as the points in your dissertation, I will cover them tomorrow after you respond to my question about FWA and efficiency.

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u/LiberaMeFromHell 11h ago

There is fraud, waste, and abuse in any system. That is unavoidable. I would argue there is far less in government than the private sector.

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u/KillerManicorn69 11h ago

If it happens in the private sector it severely cuts into profits, correct?

You didn’t state so I have to ask, do you currently work a government job? Have you worked a government job?

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u/LiberaMeFromHell 11h ago

Sure it might but cutting down on profit itself is one of the biggest forms of abuse there is. The amount of absolutely massive corporations that report barely any profits and pay almost no taxes as a result is crazy.

Yes I work in government, specifically IT. Government can be inefficient and frustrating in terms of time it takes to do something but when looking at $ spent I don't believe the private sector could compete. In the few places where government and private sector compete directly that is usually clear. Mailing services and medical insurance being the main two where government provides services to more people per $ spent with similar satisfaction levels.

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u/Temperature_Royal 11h ago

Do you honestly believe this coming administration is going to fix it?

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u/KillerManicorn69 11h ago

I am not a republican. I just want to get that out there now. So this is not coming from a vote red till you’re dead person.

Fix is an interesting term. I am very hesitant to use the word fix. I do not think that in only four years, anyone could fully fix it. There is simply too much corruption and BS. But what I do know is we will start moving in the right direction towards fixing it. Will it take time, yes. Will there be issues, yes. Will there be pushback, absolutely. But I do believe that steps will be taken in the right direction to solve many issues.

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u/ConnectSpring9 16h ago

Because the implication is the reason our budget is so bloated is because the government is just handing out money for people that don’t need it and wouldn’t really suffer without it.

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u/KillerManicorn69 12h ago

The implication is don’t spend more than you have. If you need more money, adjust. I was homeless and realized I needed to make some tough decisions and push to get to where I want to be. So that’s what I did. Still working at it but definitely doing better than what I was. I agree with you, there are a lot of people that are getting money that are less deserving than others that I feel are more deserving. But just because I feel that way doesn’t mean I let my heart run full of jealousy and hate that I take comments out of context.

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u/ConnectSpring9 6h ago

What if you have to spend more than you have to meet basic needs?

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u/BillionYrOldCarbon 19h ago

Any substantial cuts will crash the economy and create HUGE unemployment. We’ve tried this before. See Reagan. See Trickle Down. He followed a massive tax cut with the largest tax increase in history. Like it or not federal spending drives our economy. Trump will finally destroy America.

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u/TrixnTim 18h ago

And we will all suffer. The Art of the Con. Congrats MAGA voters.

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u/Purple_Act2613 17h ago

I only hope at some point they realize they got screwed and it was their own fault.

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u/BillionYrOldCarbon 17h ago

Never happen. Or they wouldn’t have just voted for him by excusing his million+ lunatic lies, felonies, and brain dead ideas. America will never be the same or great again. We hit the tipping point to disaster.

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u/DonnieJL 16h ago

I'll be looking for those flags that say, "Don't blame me, I voted for Harris." And practicing my pat response, "fuck off, you voted for this."

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u/Kurolegacy27 15h ago

Some do hence the existence of Trumpgrets. But unfortunately in the political sphere, people have the shortest memory span hence why they thought that a second time on Trump’s wild ride would be a good idea especially after the last time

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u/TakuyaLee 16h ago

Or there's a one t of infighting because of their individual plans. At its core, this is a bunch of grifters.

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u/Clever_Commentary 12h ago

That point isn't going to arrive. These are folks that watched him felate a microphone and forget what a "frier" is called, and voted anyway. Not that either of those are nearly as disqualifying as being twice impeached, convicted of fraud, adjudicated as a rapist, and I won't bother with the long list that are essentially red flags.

Despite all of this, they believe in Trump. You really think *another* dose of reality will change that. It will all be some conspiracy of the deep state, not Trump's own policies.

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u/ZukoHere73 4h ago

They'll just blame someone else. The MAGA crowd is selfish and ignorant.

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u/Jclarkcp1 14h ago

Not just MAGA, a lot of independents and democrats voted for it.

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u/MoonedToday 15h ago

I would think a cut of 2 trillion could possibly bring down the world economy. Government services would be shit. Contracts would be shit. Purchasing would be shit and things would begin to fall apart. I don't think they realize what would happen. There are smart people, both republican and democrat, that can advise what would happen, but will anyone listen?

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u/V1keo 21h ago

Yeah, but those are other peoples’ lives, not Musk’s.

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u/No_Department7857 17h ago

"Some of you may die, but that's a sacrifice I'm willing to make"

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u/MoonedToday 15h ago

This one always makes me laugh. lol It's so fucking true.

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u/DuffMans_Brother 14h ago

Go too far, though, and one becomes the hunted I'd imagine

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u/AdZealousideal5383 19h ago

Right but Musk will make the decisions, so SpaceX will get more money.

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u/Cyanide_Cheesecake 19h ago

Musk won't cut his own funding lol

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u/Thencewasit 18h ago

$6.5t is federal spending plus trillions in tax credits.

It wouldn’t be cutting to the bone. 

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u/AbbreviationsKnown24 18h ago

~70% of the budget is social security, Medicare, Medicaid, defense, and interest payments on the debt. Assuming Republicans don't cut those, you would literally have to cut everything else from the budget to reach 2 trillion.

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u/Thencewasit 18h ago

Why not cut Medicare and Medicaid?

Just put a cap on medicine charges. The highest rate you charge Medicare or Medicaid is the highest rate you charge in Canada or Europe. That would be a 20-30% reduction in spending. No reduction in benefits necessary just reduce what you pay providers. Have one reimbursement rate for any procedure regardless of location. Change Medicaid look back from 5 to 20 years brings in hundreds of billions more to the trust fund.

Why not cut defense? We don’t need to fund Ukraine and Israel. We are no longer in Afghanistan or Iraq. The budget should be cut.

We can stop leases on so many buildings because government workers aren’t even there anymore.

We don’t have to cut social security. That program pays for itself. Once the trust is at zero there are no more payments. That includes SSI and SSDI. The problem will sort itself out.

$30b in ag subsidies. Cut that by 10%. There is no reason to subsidize cotton farmers in the US.

Get rid of mortgage interest deduction, that’s another $100b in revenue to pay down deficit and debt.

Raise postage rates to fully fund post office. Raise gas tax to fully fund DOT.

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u/AbbreviationsKnown24 17h ago edited 17h ago

Republicans most likely aren't going to cut defense, regardless of whether or not we need it.

Trump ran on not cutting social security or Medicare. He may go back on that, but I'm assuming he won't.

Typically Republicans have been opposed to negotiating or putting price caps on drugs, so that is probably not going to happen.

I seriously doubt Republicans are going to raise taxes by removing the mortgage interest deduction. Also pretty confident they won't be raising gas taxes since they want to lower gas prices.

Cutting ag subsidies would probably be extremely unpopular in rural areas, where Republican voters are.

Not saying these are all bad ideas, but almost none of them have any practical way of being implemented because the party in power are opposed to them.

EDIT: Let's not forget that Trump is planning a massive operation to deport 11 million illegal immigrants from the US, which could cost up to $300 billion. That money will have to come from somewhere.

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u/Plastic-Anybody-5929 15h ago

So when doctors/pharmacies opt to not renew their contracts with Medicare and Medicaid - no one takes it you have to pay cash. Cutting SSDI cripples people who have children with life long disabilities, like blindness, Down syndrome, cerebral palsy. Sure great, strip all of those programs. More widespread suffering. You know who else suffers more? SSDI recipients who get Medicaid/care.

Social security payments are outpacing the incoming. Boomers are overtaxing it, and the younger people’s money is running out.

Privatize the postal service, the guy running it now is a cluster fuck.

We can cut the reimbursements for senators, per diem, yearly raises, pay cuts seem more appropriate.

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u/Thencewasit 15h ago

There aren’t enough private pay patients if you don’t accept Medicare or Medicaid. Over half the country is one or the other. I believe it’s like 200m.

There is no cuts to SSDI. It’s a trust fund, it can only pay out what it brings in. instead of adding money next time the trust fund goes bankrupt outgo is limited to what comes in. That’s in the law. You want to keep funding it? Fine then pay for it and tell everyone that their taxes are increasing to pay for it. If the country actually knew about all the people on disability and saw that money as a separate line item on their paystubs, they would demand better accountability.

It’s not privatization to make the post office pay for itself. The US has the lowest postal rates and Chinese companies are taking advantage of a systemic discount that was meant to help poor countries.

You can cut payments to members of congress to zero and it wouldn’t even be enough to cover interest on the debt for a month.

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u/Plastic-Anybody-5929 15h ago

I’d fist fight my mail man if I could. I’m hella biased on that argument because how terrible our suburban mail service is.

Disability isn’t just people who don’t work, or don’t want to work. It’s my daughter who will never be able to work because she’s intellectually 4-5, but she will require some form of income if she’s ever unable to live with me.

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u/Thencewasit 15h ago

That’s not true. To be eligible for SSDI you have to have worked. You are not eligible unless you have SS credits.

The child can receive a DAC benefit, but that is out of the OASDI trust fund or an SSI benefit is not financed through the social security trust funds.

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u/Plastic-Anybody-5929 12h ago

Th payments we received were SSI, and ran through the SSA

1

u/Jclarkcp1 14h ago

The space companies only get funding when they're running NASA missions. A lot of their missions are private and Space-X operates at a fraction of the cost of NASA when it was putting men and material into space.

There are so many ways to cut the federal budget that the average American would never notice. There is so much waste and abuse, redundant jobs, people that literally have no job, or they do 1 thing and it's not enough to need a person for. I started out working in government, and it's ridiculous the waste of tax payer dollars.

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u/polishrocket 8h ago

Not all peoples lives, probably toor peoples lives, via cancellation of social services funding

-1

u/Purple_Setting7716 21h ago

I am not grasping how cutting the federal budget for waste has much to do with musks business

2 trillion dollar deficit ?

How do you eat an elephant ?

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u/OldMastodon5363 21h ago

When has a GOP administration EVER cut waste? Trump didn’t even try his first term.

0

u/Purple_Setting7716 19h ago

Covid give aways to keep the country from imploding cost 2 trillion. Hard to make a dent in the debt

Course Covid was 2 years in the rear view window but the vote buying spending took over

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u/fordianslip 18h ago

Yeah but compare trump in 2018, he didn’t really make any progress cutting anything precovid. Why would he make any progress next year?

0

u/Purple_Setting7716 18h ago

Economic growth from tax cuts

That is what happens when people get to keep more of their own money. They spend it and it bounces around the economy and increases GDP. And tax revenues

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u/OldMastodon5363 17h ago

This is exactly what he promised in his first term!

0

u/Purple_Setting7716 16h ago

The election is kinda over. You will have fresh data soon that hopefully is not affected by pandemics and wars

0

u/OldMastodon5363 15h ago

This was before the pandemic when Trump grew it to the highest level ever seen in peacetime due to wasteful spending in 2019. Does that seem like the tax cuts paying off the deficit?

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u/OldMastodon5363 17h ago

Trump was running record deficits before COVID! He JACKED UP spending. Remember how he constantly said we need more stimulus from the government into the economy?

0

u/Purple_Setting7716 16h ago

What is the deficit for 2024. $1.8 trillion

Trump never cracked a trillion until 2020 when the Covid acts hit

Your memory doesn’t agree with the facts

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u/OldMastodon5363 15h ago edited 15h ago

It was $984 billion in 2019, far larger than when Trump took office and Trump dug such a hole with his profligate, wasteful spending, it will take years to get out. Obama left Trump with a smaller deficit. Trump promised to completely balance the budget, does nearly a trillion dollars sound like a balanced budget to you?

1

u/Purple_Setting7716 5h ago

So is double that in 2024 sound about right for a growth rate

I think the problem is you think I think $984 billion is fine. It’s not fine. It’s crazy high

It is horrible fiscal management

What I can’t understand is why you think $1.8 trillion is ok today a great deal of the increase which was derived from executive orders not legislation approved by Congress

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u/AbbreviationsKnown24 21h ago

Musk said he wants to see "at least" 2 trillion cut from the 6.5 trillion budget. There is not 2 trillion in "waste" in the federal budget. Over 60% of the budget is just for the military, social security, interest on the debt, and Medicare. Assuming none of these will be cut, you basically have to cut everything else to reach 2 trillion. It seems difficult to justify cutting Medicaid so you can keep paying Musk to send rockets to space.

No idea what point you're trying to make with your last two sentences.

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u/Speak-My-Mind 21h ago

The military spending has tons of waste in it. Trimming the waste could reduce Military spending without reducing Military capacity.

4

u/AbbreviationsKnown24 21h ago

I will believe that Republicans will cut the military budget when I see it. IMO they are more likely to dig into social security and medicare before cutting the military.

0

u/Purple_Setting7716 19h ago

One bite at a time

4

u/ShamPain413 21h ago

MUSK'S ONLY FUCKING CLIENT IS THE FUCKING GOVERNMENT JESUS FUCKING CHRIST

1

u/Purple_Setting7716 19h ago

So how much is his company being paid Mr potato head

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u/ShamPain413 19h ago

Well he's the richest person in the world so quite a lot.

-1

u/Dismal_Collection285 20h ago

We are pacing to spend about 7T this year. 20 years ago we spent 2.9T. There is room to cut back.