The narrative is rising about the potential implications of massive federal spending and the gargantuan deficit.
DOGE is becoming a household world and politicians, think tanks and the electorate love to condemn government waste, fraud and abuse. The issue at hand is the details,,.the specifics as to what agency or program is to be cut.
Bureaucracies are unelected bodies whose self-interest is the bureaucratic entity itself where importance is measured on budget size and head count. I have never read a bureaucratic head stating it is willfully cutting its budget.
Government is inefficient by nature given the lack of a profit motive. There are no market incentives as in the private sector to cut costs.
For at least 80 years all politicians have talked about cutting waste, fraud and abuse. Perhaps the only administration that had an element of success was the Clinton years from 1996-2000.
President Clinton stated the “Era of big government is over” and “we have ended welfare as we know it.” Government ran surpluses even with tax cuts. A primary catalyst for the Clinton’s Administration change in fiscal policy was the bond market. The term “Bond Market Vigilantes” was known in many households.
James Carville made his infamous statement “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a . 400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
DOGE is planning to immediately implement $500 billion in cuts, which is only 25% of the current annual budget deficit. Bloomberg writes the federal bureaucracy is already “lawyering up” to defend their turf.
I ask is not government supposed to be “Of the people, for the people?” Are these legal fees the best use of the taxpayer funds?
The Defense Department and Amazon have essentially the same revenues/expenditures. AMZN can track their revenue to the penny, should not the Defense Department be able to do the same? If AMZN operated in the same manner as the Defense Department (and almost every other bureaucratic entity), executive management and its Board of Directors would be in jail.
Should government be held to the same standards of accountability and use of taxpayer’s funds. It is our money not the government.
Politicians love to brag to the constituents how much money they brought home to their districts, thus making spending reductions extremely difficult, especially as some spending increases are automatic. Some regard advocating a reduction in spending is electoral suicide.
Many believe the country is or will enter a fiscal crisis in intermediacy. I share this view, and it will be this crisis that affects change.
Will DOGE be surprisingly successful? We shall see.
Enough of the rant, Treasury markets rallied across the curve on Trump’s pick for Treasury Secretary who is believed could temper Trump’s aggressiveness. Oil also declined on progress in Middle East peace talks. The Treasury rally permitted equites to stage a moderate advance.
Last night the foreign markets were down. London was down 0.31%, Paris down 0.25% and Frankfurt down 0.33% . China was down 0.12%, Japan down 0.87% and Hang Seng up 0.04%.
Futures are flat. Trump proposed some specific tariffs that initially nominally roiled markets. Oil is up about 1%. The 10-year is off 2/32 to yield 4.28%.
