Let’s check in on the Treasury Secretary’s 3-3-3 plan.
The 3-3-3 Plan Goals
- Cutting the budget deficit to 3 percent by 2028
- Boost GDP growth to 3 percent
- Produce an additional 3 million barrels of crude (or energy equivalents) per day.
How’s Bessent Doing?
Regarding point three, Please note EIA Says U.S. Oil Production Will Peak in 2027
Shale oil production in the U.S. is also expected to peak in 2027.
After the peak, U.S. oil production is forecast to decline through 2050.
U.S. crude oil production is set to peak at around 14 million barrels per day (bpd) in 2027, according to the Annual Energy Outlook 2025 of the U.S. Energy Information Administration (EIA).
Last year, U.S. crude oil production grew by 2%, or by 270,000 bpd, to average 13.2 million bpd. Almost all the production growth came from the Permian region, which accounted for 48% of total U.S. crude oil production.
Growth in the U.S. shale patch has slowed in recent years, from the boom years in 2018 and 2019 when total U.S. production was rising by about 1 million bpd annually, thanks to the shale output.
Bessent needs a 22.7 percent improvement from 13.2 to 16.2 million bpd, or equivalent.
Is Trump about to push solar? Wind?
On May 20, 2025, I noted Trump’s “One Big Beautiful Bill” Would Increase the Deficit by $4.8 Trillion
Unfortunately, things keep headed in the wrong direction. The latest compromise added more SALT deductions.
On April 30, 2025, I noted Real GDP Down 0.3 Percent, Real Final Sales Down 2.5 Percent, Inventories Soar
OK, that is a single quarter snapshot. But are we going to perpetually avoid recession?
The overall plan is best described as fantasyland.
“His net worth is somewhere between $700 million and $1.3 billion. What’s your net worth?”
Bessent is a Trump parrot ass who defends what Trump does.
You should think more but cannot because of a massive case of incurable TDS Type II.
And by the way, “my billionaire has more money than yours”
Musk Calls Trump’s Trade Advisor a “Moron Who’s Dumber than a Sack of Bricks”
https://mishtalk.com/economics/musk-calls-trumps-trade-advisor-a-moron-whos-dumber-than-a-sack-of-bricks/
Musk has also diverged with Trump on tariffs, posting videos about free trade and saying at an Italian event he believes there should be zero
It’s not the first time Musk has disagreed with Trump on a policy or personnel pick. But the split over tariffs is one of the more significant differences in perspective between the president and his biggest booster and top adviser.
Stop the TDS bullshit I am tired of it
And by the way, “my billionaire has more money than yours”
Unless Uncle Buffy has Becky as a side-piece what good is all the money to him?
Sorry Mish. You don’t know him at all. His project is not Libertarian but he is not a puppet nor is he dumb. Quite the contrary. Even those in the business who do not agree with his economic philosophy recognize his intelligence.
When did I call Bessent dumb?
You have reading comprehension issues.
I said “Bessent is a Trump parrot ass who defends what Trump does.”
That does not make him dumb.
George Soros isn’t dumb either. Should we do what Soros wants because he is wealthy and not dumb?
Well you’ve done it again. Excellent post with bonus triggering of the MAGA cult.
Congrats on getting a 2-star Mishelin™ rating on this post.
Keep ’em howling Mish! It’s proof you’re doing something right.
It was Elon Musk that stated that Bessent was “a moron who is dumber than a sack of bricks”.
Rather succinct in my opinion.
To me Bessent acts as a damper between trumps irrationality and the real world. Irregardless of his nose being buried between trumps butt cheeks.
Mish didn’t call him dumb but I will, he is dumber than dirt, so is Soros, so are all of em. No one with intelligence destroys their country through corruption & parasitism, no one with intelligence creates a society with such extreme inequality that homeless people camp outside multimillion $ mansions. No with intelligence needs to continue robbing & pillaging when they have more money than can be spent in their, their children & grand children lifetime. Intelligent people are not greedy, intelligible people don’t spend more than the earn, intelligible people would recognise when inequality becomes this extreme even the rich are in grave danger. Intelligence would retire & enjoy their lives while doing real charity when they have $10 million or $50 million, or max $100 million. You have to be dumb as dirt to even want to be recognised. You see intelligence good, kind, honest, humble, charity, being dumb, well, that’s greed, arrogance, cruelty, stealing from the poor, rigging the system. Please do not tell me or delude yourselves that Trump, Bessent, Biden, all politicians, Musk, or any of them are intelligent, they are not. In fact Musk is the dumbest of them all, he’s just a ruthless man exploiting the real ability of others
People with the most money are not the smartest, they are the biggest risk takers who succeeded, sometimes by blind luck.
The entire idea that money means we should take someone’s advice implies we should let Soros and Musk set policy. How silly is that?
In terms of IQ, I bet Ben Bernanke would beat nearly all of us. How did his QE to infinity work out?
Bessent is not “dumb” in any real sense. But he did sell his soul for power. And the price is he repeatedly has to look like a fool defending Trump.
There will be congressional hearings as usual when this is ends, and it will- Air (BTC) has a 2 Trillion mkt cap, that’s what the Fed has done…not the Gov…the Fed..they printed and encouraged the inflation- they are not fighting it now just like they did not summer 22′- this is all planned and musk, trump, biden, pelosi, bessent, mnuchin, powell have no clothes- silly people pushing the final straw..private equity ..as it goes..all will go- Political Independent for 16 yrs now and it’s glorious to watch the traitors on both sides of the aisle rack up debt- Agree w your post- The SHEEP R being played- lol
I can’t understand why they just don’t cut spending THIS YEAR? Why is it always pushed off into the future. This is one Big Ugly Bill
Bessent wants to grow US oil production by 3 mbpd, from the current 13.2 mbpd to 16.2 mbpd. That “might” be possible if oil prices go up over $100/barrel and stay there. That would provide enough incentive for US oil companies to drill all their tier 1 and 2 locations and grow production.
Breakevens for new wells for US oil companies are currently around $65/barrel.With WTI prices at $61, oil companies are reducing their drilling activity. As long as prices stay below $65, US oil production will slowly decline. We have already dropped from 13.5 mbpd to 13.2 mbpd.
In addition, we are running out of tier 1 locations and are starting to drill more tier 2 locations, which have even higher breakeven costs.
We didn’t leave the Stone Age because we ran outta rocks…we moved on because we found a “better way”…Oil ?- why, without all your millions in K street donations to influence politicians we would have been 75% off oil 10 yrs ago- But no, let’s keep drilling for 20th century power- L outloud- hope your call options in big oil work out for ya 🙂
The biggest mistake everyone is making, the biggest delusion being spun here is the belief the US will have 10 years to project that far. It’s absolutely insane to extrapolate what the deficit or debt will be in 10years when this ship is collapsing as we speak, the US won’t survive a yr or two on this trajectory. Can the sheep really believe there is excess money to finance a $2 trillion & rising annual deficit, when all countries are running deficits, even those who previously had surpluses. Look, the money does not exist without a massive tock collapse feeding the delusional governments appetite for debt. Even Germany has a deficit, Saudi Arabia, the whole world is running deficits & economies heading into recession, yet no one sees this. I could go on & on about the fantasies being spun. At the end of the day the ponzi is collapsing, countries are already in a financing war over attracting what little money remains. It’s all mathematics, for every deficit $ a surplus has to exist, countries do not have it, savers do not have it, it’s either a deflationary collapse or hyperinflation & the if the US choose hyperinflation their last lifeline of reserve currency status dies. These are the fact & Trump wont get a single dollar from the Middle East cuz they too are broke running deficits & oil is going a lot lower. The world has truly lost it’s mind, it’s over.
Heres my take.
Prices will go up. Wages will have to follow
Corporations will take the tax cuts and buy back stock to enrich the ceo/ boards/ investors instead of investing in factories
Trump rolled back green policies because of oil money and the us auto manufactures cant compete with chinas bdy ( or whatever the company is) ev cars
Trumps asking the average american to pay down the national debt but can not balance the budget. Which is just another tax
His people will love him still
Trump is accepting a 400 million dollar jet he plans to take with him when he leaves. Its bs about his libary. What is he gonna park the jet in front of the building. Or turn it into kind of a jet mobile libary
Book mobil thing.
We live in times where politicians represent the party r or d and not the people. Dont believe me. That is the threat of getting primaried.
I could keep going but i have to go to work.
> Prices will go up. Wages will have to follow
yes? Maybe the work will be done elsewhere.
Washington, DC is fantasyland.
And what if the Big Beautiful Bill earns us a BBB rating?
Movable goal posts. Nothing new here. Classic marketing: “new and improved,” will solve your woes! Various airy pledges got the votes, followed by the “first 100 days show,” then reality sinks in. Political capital oozes out.
You can’t get growth without inflation. The money supply needs to be reduced drastically in order to get productive growth with less inflation. Derivatives also would have to be banned. Right now there is too much money chasing after everything. The solution has always been simple for fixing the inflation. But none of this will fix the debt. That is baked in and continues to grow larger. The better path the Trump admin could have taken is negotiating the debt owed down with bondholders that are sovereign wealth funds and governments. The real problem is the developing world sees everything as a zero sum game in negotiation and so does Trump. No one thinks win win anymore.
ridiculous
The US had plenty of periods of growth without inflation
According to Corwin D. Edwards, professor of economics… [Edwards attended Oxford University in England on a Rhodes scholarship and earned a doctorate in economics at Cornell University. He spent a year teaching at Cambridge University in England in 1932. He taught at New York University in 1954, the Chicago School from 1955-1963, the University of Virginia, and the University of Oregon from 1963-1971.]
The U.S. Golden Age in Capitalism, 1955-1964, was driven by “increased money velocity which financed about two-thirds of a growing GNP, while the increase in the actual quantity of money has finance only one-third.”
Lending by the banks is inflationary (increases the volume and turnover of new money). Lending by the nonbanks is noninflationary (results in the turnover of existing money, a velocity relationship). If savings are not expeditiously activated, then a dampening effect is generated.
See the pervasive error that characterizes the Keynesian economics, viz., “Requiem for Regulation Q: What It Did and Why It Passed Away” (FRB-STL, February 1986), the Fed’s “Bible”
The FED’s Ph.Ds. are learning:
nonbanks vs. banks liberty street.pdf
“Activities and related risks of banks and nonbanks remain intimately connected, indeed in a symbiotic relationship…”
Dr. Gilbert assumed that the NBFIs were in competition with the DFIs (whereas actually, the NBFIs are the DFI’s customers). And savings flowing through the NBFI (from the commercial banks), never leaves the member commercial bank system (as anyone who has applied double-entry bookkeeping on a national scale should already know).
Dr. Gilbert naively asked the wrong question. His implicit and false premise was that savings are a source of loan-funds to the banking system. Gilbert assumed that any potential primary deposit (funds acquired from other DFIs within the same regulated boundaries), were newfound funds to the banking system as a whole.
Thereby in his analysis, Gilbert also assumes that every dollar placed with a non-bank deprives some commercial bank of a corresponding volume of loanable funds. However, saver-holders never transfer their funds out of the payments system unless they hoard currency or convert their funds to other national currencies. This applies to all investments made directly or indirectly through intermediaries.
Gilbert asked: Was the net interest income on loans/investments derived from “attracting” these savings deposits (viz., outbidding other DFIs for the same stock of core deposits), greater than the interest attributable to the direct and indirect operating expenses of endogenous retail and this wholesale “funding” [sic]?
The question is not whether net earnings on CD assets are greater than the cost of the CDs to the bank; the question is the effect on the total profitability of the commercial banking system. This is not a zero sum game. One bank’s gain is less than the losses sustained by the other banks in the System. The whole (the forest), is not the sum of its parts (the trees), in the money creating process.
Inflation was at 5 to over 7% and the defense spending was 8% of GDP at that time. WW II debt was being inflated away in this period.
Mish i feel there is a factor people do not consider when talking about growth. We are a mature economy. There is not a ton of people needing say a refrigerator. Pretty much every house hold has one and does not need another unless it breaks or they remodel. Think of other items tvs computer etc. bit different than in the 50s 60s. Im am interested in your thoughts if you have any on how this factors in.
Yes, demographics plays a role.
US growth now is healthcare (aka cause-sickness-treat-symptoms-but-do-not-cure) and elder care.
Inflation-free growth comes from productivity increases. White-collar productivity is limited given the wasted resources on many college degrees. AI will change that along with big displacements.
Too much credit chasing after everything.
Mnuchin and The Blonde: “gold is good”.
Those were the days!
The next fraud – “3%” inflation target. When it’s actually WAY higher, as anyone with even rudimentary math skills knows. Volcker’s Fed Funds rate was 20% , when we had a truthful CPI of around 15% in 1982.
So, that’s a fraud on Bessent’s part?
One of the (probably deliberately) confusing aspects of the US fiscal debate is that the debate focuses on how much a new bill would add to the current law baseline over the next 10 years. Thus, the current debate is circling around the largely irrelevant question whether the big, beautiful bill adds $4 trillion, or $5 trillion, or $6 trillion. The debate completely ignores the fact that under the current law baseline, $24 trillion would already be added (under current policies, the amount is a “few” trillion higher), and that the big, beautiful bill debt addition comes on top of the $24 trillion. A much better approach would be to use something like the Bessent 3 percent of GDP deficit rule as the baseline, and then ask how much does the big, beautiful bill add to the Bessent baseline. For the curious, the answer is 17 trillion. That would probably sounds very different to the average voter.
The goal year is 2028. The year that we are living in right now is, I guess you know, 2025. Oil-equivalent production of natural gas counts as oil production. We need much more of that to power AI and US industry. We will, hopefully, be seeing a much more business-friendly tax regime and much less regulation on business in the near term. It sounds like you are rooting against the US, in our attempt to battle back against the tremendous advantage that prior governments and corporations have given the Chinese, much to the detriment of our own workers and national defense. You should probably be tariffed at the same rate as the Chinese.
That rate changes from day to day. Perhaps if trump wets his bed he wakes up in a bad mood and changes the tariffs?
Face it we have an incompetent administration at the helm, one that even bankrupted a casino!
Trashing todays economy does not guarantee recovery by 2028
Since your a fan of AI, here is what is says about fracking under the water table
Risks of Fracking Under the Water TableWater Contamination
Methane and Gas Migration
Wastewater Management Challenges
Well Integrity and Mechanical Failures
Surface Spills and Improper Disposal
The insane and inconsistent tariff policy makes growth impossible as no business leader can predict what they will be facing from one day to the next.
Even farmers can not estimate what to plant as their crops are being rejected by our former trading partners.
3% growth is more likely to be -1%
What planet is Bessent from?
planet of “the cult of chairman mao zeDON”.
Scott Bessent is a former hedge fund manager who worked with Stan Druckenmiller, George Soros, and Jim Rogers. His net worth is somewhere between $700 million and $1.3 billion. What’s your net worth? He’s regarded as a very smart person. Who thinks that you are a smart person? Your dog doesn’t count. He faces a very tough job, trying to restore the finances of the US government after the Biden administration, per a Biden EPA administrator, was engaged in what felt like “throwing gold bars off of the Titanic.” You should read more.
“His net worth is somewhere between $700 million and $1.3 billion. What’s your net worth?”
Bessent is a Trump parrot ass who defends what Trump does.
You should think more but cannot because of a massive case of incurable TDS Type II.
Then why is Bessent oversupplying T-bills?
What does the administration get if this target is reached?
How do they suffer if it is missed?
The Treasury Secretary has basically no effect on the budget deficit. About the most the the Treasury Secretary can do is affect when debt is sold and what the duration of the debt is.
He’s in the cabinet. He should be telling Trump we can’t afford $1 Trillion + for “defense” or to waste money on (the likely ineffective and destabilizing) “Golden Dome”. He should be telling Trump to let extension of the 2017 tax cuts include some increase in tax revenue.
He prob wants to keep his Cabinet job (until he doesn’t).
And that’s the problem. No one’s willing to take the chance of getting fired or losing their seat in Congress. No one ever resigns in protest. Almost no one with any integrity in that town.
All invoking Taleb’s “Skin in the Game,” or more recently, Davies’ “Unaccountability Machine.” Evolution gives us players who have upside with drastically limited downside. Happened in corporate governance too. We have not managed “agency costs.” Maybe we as voters are numb to the same effects, thus feeding into it.
Elon’s thrown in the towel and will agitate for reduced spending from the sidelines. Of course, he was temporary anyway.
Does Maisie have integrity? He has a solid seat.
They have already profited so much from manipulating the market and insider trading that they do not care!
And the mindset at the top is a bunch who believe in severely gated communities, and their ultimate escape from global consequences, indeed from anything “public.”
Off topic, but interesting company.
https://news.mit.edu/2025/allium-engineering-enables-100-year-bridges-corrosion-resistant-steel-0520?
utm_source=join1440&utm_medium=email&utm_placement=newsletter&user_id=671c0055ef9fc5fdc50127ac
It’s looking like democracy – such as ours is – is incapable of keeping deficit spending even close to within the constraint of GDP growth. Trump and the current Republicans aren’t even trying. Democrats have every right to mock Trump, but they’re the ones who made his win possible by nominating Word Salad Harris (she did such a great job on the border) and Tampon Tim. God help us.
We are not a Democracy. We are a Representative Republic….and as such: NO WAY does our Structure as a Nation have any influence on spending.
“When the people find they can vote themselves money, that will herald the end of the republic.” — Benjamin Franklin
Congress won’t enact a reasonable solution because they’re afraid of losing their seats. Cut entitlements and voters will rebel. Cut “defense” and arms manufacturers will cut off the funding needed to run campaigns. Limit SALT deductions and blue state voters react. End carried interest and Wall Street donors react. Raise any tax and get pilloried. God forbid anyone criticizes anything Israel does. We have a latticework of special interests ensuring widening deficits.
BRAC ACT was interesting although limited scope.
Could that work for the full budget?
My guess, not until there’s a crises … then is it too late?
What is a crisis? 1970s style stagflation maybe?
https://en.wikipedia.org/wiki/Base_Realignment_and_Closure
a republic is a form of democracy. you get an F for basic civics. old sport.
Regardless of the “Word Salad” moniker, Harris was a competent and self made American. The notion of a malignant narcissist (trump) as president is infinitely worse.
Bottom line is we would have a booming economy, far higher tax revenues and far better relationships with our neighboring nations and allies with Harris as president.
Far be it from me to disregard the skills that brought her to prominence in California. “Word Salad” wasn’t just a moniker. It reflected the shock people felt when seeing a major candidate unable convey what the F she was trying to say. People can reasonably disagree about which of the two would have been worse. I just hope we soon get better candidates. Democrats – please listen to the advice of Ruy Texeira. https://substack.com/@theliberalpatriot
For F’s sake, offer someone whose main goals aren’t a wide open border and trans’ing children.
Oh sheesh. Ok, I get it now.
But if we ‘perpetually avoid recession,’ it won’t ever happen. How cool is that?
Maybe Trump should forget tariffs and introduce a VAT on all US goods and services and imports? The VAT rate should be sufficient to repay 1/30th of the Federal Deficit every year. It has NO other purpose, and goes away when the debt is 100% retired.
BUT BUT… Congress will continue to spend beyond its means. This is when you realize the US has very few statesmen/women worthy of election. Likely, it would take a dictator, and hangings on The Mall to change the current mindset, and achieve a responsible Congress.
BTW, limiting next year’s budget (including interest expense) to a FIXED % of this year’s real national income would be one RATIONAL approach.
NO MORE DEBT! If you want to go to war, reduce expenditures elsewhere. Same for health, welfare, etc.
Can’t spend it if you don’t have it.
And yes, there are issues, like the endless inflation and FED f*(kery. Hanging a few would likely fix that problem.
bessent should be drug tested. he sounds high as a kite.
Being in this particular weird fishbowl does that to some people. I think it is a condition for survival there.
We aren’t even going to average 2.6% GDP growth over that term
DOGE can only recommend but it’s Congress that must cut. Bessent can only play the hand that was dealt to him.
Republicans have a majority in both chambers and the presidency. If they want to reduce the deficit they can. They simply don’t want to.
They will TALK as if they want to – – and ACT to not make it happen.
True. There are some traditional Republicans who have no problem with deficits and vote with Democrats on this issue.
Actually, we’re a hostage to our own stupidity. If you cut the deficit markedly, you get a recession. During recessions, the deficit blows out, due to increased governmental support payments. Debt goes up — it’s the credit death spiral. Another part of the spiral — tax revenues are to a great extent a function of the stock market. If the stock market goes down, federal receipts go down, exacerbating the debt spiral. So, we can’t have a recession. It doesn’t mean that we won’t — it just means that the consequences would be really bad. I don’t envy any Treasury Secretary trying to thread this needle.
Well said. The system’s weakness is seemingly funneling down to these sort of narrow, Scylla and Charybdis sorts of dilemmas in every set of choices. No fun for any of us, as, sneering or cheering, we ll have a front row seat.
My default prediction is inflation, the “solution” for a covert tax increase and covert default, when raising revenues or cutting spending is politically impossible. So the rock or hard place we reach is maybe in the bond market.
True! Even if congress could agree, Trump will veto any bill that is not “big and beautiful”.
Which congressional district is he in?
“I’m just a bill, on Capitol Hill…”