Berkshire Hathaway Leader Suggests Quick Resolution to U.S. Deficit
In fiscal year 2023 the U.S. deficit rose to $1.7 trillion, representing a significant 23% rise over the $1.4 trillion figure in 2022. According to the Bipartisan Policy Center, during the same period, revenues decreased by $457 billion (9%) while outlays decreased by only $83 billion (1%). “The Fed’s interest rate hikes and changes in student loan policies, as payments resumed” were two main reasons for the widening deficit; while outlays were impacted by rising debt servicing costs to $177 billion (33%) as a result of the “Federal Reserve’s six interest rate hikes since October 2022, which pushed the federal funds rate to a 22-year high of 5.25% to 5.5%.” On a CNBC interview, investing legend Warren Buffet’s response when questioned “what he might do to solve the growing problem” was “I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for reelection,” he said, “Now you’ve got the incentives in the right place. So it’s capable of being done. … A more effective threat would be just to say, if you guys can’t get it done, we’ll get some other guys to get it done.”