Skepticism

After the hype of the trip to the Middle East, now it’s time to go back to the really important stuff: the budget. Where are we? Trump presented his tax plan, or as he refers to it “the One Big, Beautiful Bill” (OBBB), and both chambers of Congress have passed the bill with some comments. It is now going through reconciliation where the (supposedly) small discrepancies can be resolved to enact it into law. The idea is to have it ready before Memorial Day (May 26) to be able to tackle and avert another debt ceiling crisis on July. But if you look at the chart below, if the plan is approved without major changes, we’re going to follow a line above the green one. Not only the current tax plan from 2017 will not sunset, we’re adding more fiscal stimulus, and therefore widening the budget deficit. Unless. Unless we can really bring more manufacturing onshore and therefore more revenue, and therefore more taxes. Unless DOGE can cut enough fat from our government spending to make a dent. Unless AI increases productivity so much we enter into a new paradigm with robots working for us and producing more, more efficiently. And that’s the plan. But in the words of the great Homer, from the Oddisey, “skepticism is as much the result of knowledge as knowledge is from skepticism”.

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