David Stockman to Elon Musk and Vivek Ramaswamy
Advice on the Nearly Impossible Job of Cutting $2 Trillion from the Federal Budget
When Ronald Reagan was elected in 1980 on a call to bring the nation’s inflationary budget under control, the public debt was $1 trillion. By the time Donald Trump was elected the first time, it had blown up to $20 trillion. It is now $36 trillion, and under built-in spending and tax policies it will hit $60 trillion by the end of the current 10-year budget window.
Most economists agree: Absent some incredible and incredibly unlikely economic boom of some kind, US debt is a financial atomic bomb, just waiting to be triggered.
To obviate this probability, Trump appointed Vivek Ramaswamy and Elon Musk to DOGE, the Department of Government Efficiency, to cut $2 trillion from the federal budget.
That task is enormous. And given the fact that all the major economic lobbying groups, including the Military Industrial Complex, Big Pharma, and Big Farming, will do everything they can to thwart the effort, the chances that Musk and Ramaswamy can accomplish the goal is, according to David Stockman, highly unlikely.
Nevertheless, if they mean to try, Stockman has a series of recommendations for them, beginning with the elimination of 15 government agencies that he believes could be safely closed.
But, he says, even if they are successful in shuttering all 15, with the combined 70,000 employees fired or furloughed, the savings would be only about $11 billion – a small fraction of the $2 trillion goal Musk and Ramaswamy have agreed to.
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Tech Giants’ Big AI Bets Are Starting to Pay Off
Revenue from cloud businesses at Amazon, Microsoft, and Google reached a total of $62.9 billion last quarter. That figure is up 22.2% from the same period last year and marks at least the fourth straight quarter in which their combined growth rate has increased. In this article, Miles Kruppa and Tom Dotan examine the companies’ accelerating growth in cloud computing, the surest sign yet that spending by AI customers is beginning to justify the tech giants’ huge investments in infrastructure to power the technology.
Meanwhile, in this essay, Jason Furman argues that although some regulation is needed to reduce the very serious possibility that AI technology might go wrong, overly regulating it, as he contends the EU is now doing, will backfire. He then provides six “principles” that governments should consider when drafting AI regulation.
Masterpiece by René Magritte Sold for Over $120 Million
René Magritte’s great 1954 painting “L’empire des lumières” sold at Christie’s last month for a record-breaking $121 million, nearly $28 million above the auction house’s estimate, and the first Magritte to sell for nine figures. Art dealers are hoping this could be the turning point for a struggling art market.
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