You know the American federal budget has become a larded-over whale and needs a good trimming. John Paulson, an investor and friend of Donald Trump who could be the next Treasury Secretary (not to be confused with former Bush Admin Treasury Secretary Hank Paulson), and Elon Musk, who Trump plans to put in charge of the new Department of Government Efficiency, will work hard to do the trimming. The Wall Street Journal’s Brian Schwartz reports:
Billionaire investor John Paulson says he would work with Tesla Chief Executive Elon Musk to enact massive federal spending cuts if Paulson were to become Treasury secretary in a second Trump administration.
Paulson, an ally of the former president, said in an interview that his priority would be extending Donald Trump’s expiring 2017 tax cuts, followed by “working with Musk to reduce federal spending,” particularly by getting rid of the subsidies for green energy in the Inflation Reduction Act, which he referred to as the Green New Deal.
“All of these tax subsidies for solar, for wind, inefficient, uneconomic energy sources,” said Paulson. “Eliminate that. That brings down spending.”
It is relatively unusual for an ally of a presidential candidate to talk openly about the role he or she might play in a future administration. Treasury secretary is one of the most prominent positions in the government, interfacing with Wall Street, business leaders and foreign heads of state.
Paulson, 68 years old, has been close to the former president for over a decade. He is one of several people Trump and his allies have considered for Treasury secretary, according to people familiar with the matter.
The Treasury secretary will likely be a point person on several key Trump initiatives, including extension of the Tax Cuts and Jobs Act, portions of which expire at the end of 2025, and a range of new tax cuts. Financial markets worry that the resulting deficits could put upward pressure on interest rates.
Action Line: For the safety of the U.S. dollar and all the investors relying on the continued reliability of Treasury securities, America needs to rationalize its budget. With public debt now over $35.5 trillion, alarms should be going off in Washington, D.C. But no one in the Biden administration seems to hear them. Click here to subscribe to my free monthly Survive & Thrive letter.
