🏦 The "Big, Beautiful Bill" delivers no real deficit cut and the long end reprices

“The bill ultimately yields no real change in the annual deficit. The annual deficit could climb to $2.5 trillion, being added to the federal debt load every single year going forward. In fact, if you look at the Treasury yields, the 30-year is now kissing 5%.”

“unless you're willing to make serious systemic changes to things like Medicare, Medicaid and Social Security, you're not going to solve any of these problems. And here's the sad reality is nobody is willing to do that.”

“And remember, if you look at the historical perspective, when the global reserve currency nation sees their debt sell-off, it usually is part of a global sell-off that happens. It's not just the US that gets affected. And any one of these markets can cause a cataclysmic follow-on to the rest of the global financial markets. Like if Japan sells off too much, we are going to start to see a lot of unraveling happening.”

“What he is saying is that there is increasing risk that that trade unwinds. When that trade unwinds, what you're going to have are net sellers of up to, as Friedberg said, a trillion plus dollars of US treasuries.”

“But the immediate reaction to this bill, I think that Elon is having, is the same that I've had, and it is the same that Senator Johnson had, and it is the same that many others have had, which is what the F are we doing? We are in a fiscal emergency in this country and we're not addressing it.”

“And it's probably important to then say, well, what would a boundary condition be? I don't think the boundary condition is the dollar. I actually don't think the boundary condition is the debt.”

“So this is where details do matter. I think there is a willingness and a, you know, discipline problem on both parties, and I think maybe he can help fix that. The second thing is that we have these arcane rules, particularly in the Senate, that you need 60 votes in many ways to cut things, except through very hacky methods. And that's a reality.”

“At 3.3%, which is the current average rate we're paying across $36 trillion, we have a run rate interest expense. So just the money we're paying each year on the interest of the outstanding debt is $1.2 trillion a year. And if the spike's up to 5% from 3.3, we're talking about nearly $2 trillion a year in interest expense.”

“Now that rates have gone up and don't seem like they're you know, going down anytime soon, the deficit does matter and it really matters. And you can kind of run a couple of scenarios, but like pick your metric. If the deficit kind of continues at current levels and we were to refinance the debt at the prices that David was talking about, it's only a few years before spending on interest is significantly larger than spending on Medicare and Medicaid or Social Security or the military.”

“The Big Beautiful Bill is doing, it's oriented toward growth stimulation. Everything that we can do to stimulate more capital investment in the United States is embodied in the tax law as part of that bill. So with the growth coming out of the Big Beautiful Bill, and if we continue to go through the cuts with decisions, I'm very optimistic that we're going to get back on the right path.”

“I have issues with the spending, and that's not been resolved. So like I said before, here we are, folks. My full-throated endorsement will come around when Doge actions are taken seriously and or the White House puts pressure on Congress to take action on spending.”

“And what we're seeing now across the board is generating about $300 billion a year of additional tariff revenue that goes to help balancing the budget. So $300 billion a year over 10 years is $3 trillion. That is a big number.”

“The thing I most worry about with respect to tariffs is if it does create a new revenue source for the federal government, it gives the federal government another crutch to keep spending up.”