Musk is correct, but what should Congress do? 
Just Can’t Stand it Anymore
Three Replies to Musk
Comment of the Day
“It’s crazy to me that all of these Republicans voted Republican in order to balance the budget, but when it comes down to it, they don’t really care. It’s just all about what Trump wants, and what Trump says is good.”
Powers of the King
What Gammon said applies equally about Trump breaking treaties like USMCA, reciprocal tariffs, and birthright citizenship.
What Should Congress Do? Mish Top 12 Ideas
Proposal #1: Stick to Medicaid guns. Repeal the Obama handouts to states 100 percent. Cut Medicaid funding by 25 percent. Give states a block grant. Watch the states clean up Medicaid fraud fast.
Proposal #2: Cut military spending by 25 percent. Give the money to the Pentagon as a block grant with the note “Spend it wisely”. Stupid programs would be cancelled. Unneeded bases would be canceled. Pet projects like the Golden Dome would never get started. And might I suggest we do not need more tanks because neither Canada or Mexico will attack us, and I don’t want the US to attack them either. We can close bases in Europe too, or make Europe pay us to defend them.
Proposal #3: Dramatically reduce the tax code by slashing all deductions. SALT gone. Charitable deductions gone. Mortgage interest (phase out over 10 years). Note that Trump is adding deductions and making the code more complex while moaning about the number of pages in the tax code and wanting to get rid of the IRS. The way to reduce the need for the IRS is to simplify the tax code, not make it more complex.
Proposal #4: End child tax credits and earned income credits, Make able bodied people work. To encourage people to work instead of receiving tax credits, make the first $35,000 in income tax-free for everyone.
Proposal #5: End all tariffs and subsidies except where genuinely needed for national security. Steel, autos, movies do not qualify. Microchips and rare earth elements would.
Proposal #6: Re-enact the USMCA, apologize to Canada and Mexico, join the TPP now called the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Following Trump’s withdrawal of TPP, the remaining members struck a new deal. These countries now have easier access to each other’s markets than what the US enjoys. I will do a separate post on this.
Proposal #7: SNAP (food stamp) modifications – No snacks, candy, chips, soda, on food stamps. Instead, to promote cleanliness, allow soap and cleaning supplies.
Proposal #8: Lower the corporate tax rate to 10 percent but make it 20 percent on income earned overseas. Some manufacturing will return to the US and all of the games played by drug manufacturers including the entire trade deficit with Ireland related to drug production (a massive $86 billion) would immediately return to the US. I will also discuss this in a separate post.
Proposal #9: Allow immediate corporate writeoffs of expenses, but only for expansion in the United States.
Proposal #10: Lower the individual tax rate and set the automatic deduction at $35,000. To make up for revenue lost, have a modest VAT but no tax on food, medicine, or shelter, the latter up to a base rate indexed for inflation. I have previously proposed a national sale tax, exempting food and medicine, but John Mauldin and Erica York at the Tax Foundation convinced me a VAT was a better idea.
Proposal #11: Heavily tax all executive stock options and pay over $1,000,000 with more of a focus on options and free shares that constitute shareholder dilution.
Proposal #12: Balance all of the above proposals to the required levels to stabilize debt levels while ensuring the middle class gets the biggest benefit from tax policy changes. I am willing to phase all of this in over time, if necessary, to reduce the likelihood of economic shocks, as long as it gets done.
Five-Point Synopsis
- I dramatically simplify the tax code, eliminating much of the need for the IRS.
- I encourage people to work by changing how Medicaid works, by tax code, and elimination of credits.
- I encourage business expansion in the United States via expense writeoffs and a lower corporate tax rate in the US than overseas.
- I reduce trade barriers by rejoining USMCA and joining the TPP replacement.
- I raise revenue at the extreme high end while lowering taxes for the middle class.
I am open for discussion and welcome other ideas. Trump is seriously on the wrong path on most of this.
The above ideas are from my May 25, 2025 post What Should We Do to Get Government Spending Under Control?
That’s the question I was asked today. 12 Ideas.
I failed to address putting more skin in the game on health care, especially Medicare. There is no incentive for anyone in the chain, to reduce costs.
Also we need to do something about emergency and very costly procedures used to keep people alive who are doomed in the next 6 months anyway.
Add those to my ideas
Related Posts
May 12, 2025: The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
The bill is certainly big, but it’s damn ugly.
May 22, 2025: Scott Bessent Has a 3 Percent Deficit Target, How’s He Doing?
Let’s check in on the Treasury Secretary’s 3-3-3 plan.
May 22, 2025: The One Big, Irresponsible, Deficit-Increasing Bill Passes the House
Did anyone really think Republicans would be fiscally responsible?
Simply said: Brilliant. If Congress enacted your 12 point program, our economy would explode to the upside, and we would once again be the envy of the world. Sadly, none of this will occur due to the nonstop log rolling in Congress coupled with the moronic rantings of our current President who has a knack for self-destruction….
Thanks
I pinned your comment.
I failed to address putting more skin in the game on health care.
Add that to my ideas
Mike, I would love you to do your brilliant analysis on Trumps MFN Drug price plan. I think that may be his best idea. I think most of the American people, and trump people especially and too many republicans just do not realize how our lack of a cohesive medical insurance(care) ie, no basic form of government health care makes us less competitive globally, and domestically those costs just get passed on as a direct cost on goods and services.
Trump won’t fix anything, healthcare should be a public service non profit, not a private profit based corrupt system. Healthcare, education & unemployment benefits should all be free & available to all like the UK.
Education and Unemployment benefits are already free and available here (well public schools and you need to actually work to get UI payments).
For profit health care is one of THE major reasons that so much research and break throughs happen in the USA. For profit incentives research and break throughts. How many have happened in the UK vs the USA in the last 50 years?
In the UK most doctors live in apartments and many of them can’t afford a car. And their patients wait for months to get an appointment, and if a strike happens, nothing works. Medicines are dispensed on the basis of a strict formulary – no choice.
Of course, who am I with living and working experience in 3 countries, 11 years in the life/health insurance industry in 2 of them, and 2 daughters in London, compared to the average daydreaming commentator…
It’s been a publicly known “secret” that about a third of medical studies nowadays are fake, yet if you cut their funds you’ll have a war on your hands, the left will attack your for “being against science”. Same with the outrageous college tuition. Mish thinks just like Trump, “let’s just do these things” – but politics is about compromises, and congress will say “yeah, it sounds like a good idea, BUT…”. If Mish becomes President tomorrow, the judges will line up striking down these proposals from Day 1. Good luck passing them through Congress…
C’mon that’s the definition of dystopia. It cannot be that bad, or is it?
They also arrest for tweeter comments and police response for serious things is worse than a Benny Hill clip.
But my biggest problem is not any of these things. It’s the tiny living spaces (and if you find something of decent size and price, no A/C or central heating or outrageous rent or high-rise). I live in a floor-occupying apartment in Illinois built in the 1950s, and has all the things we take for granted in the American Midwest: it’s huge, and it’s got central heating and cooling. Cheap energy bills (!). Don’t tell Californians please! The rent is 1/3rd of what I would be paying near any UK city for the same thing.
PS. Once you get used to American amenities and space in the Midwest (including refrigerated eggs), you’re not going back to Europe, except for the “forever being outdoors” places like the large Greek islands.
They have better food.
Why are ya daughters in London?? I rest my case, ya talking nonsense, defending corporate parasitism.
Australia has free universal healthcare paid for by a two percent levy on annual income, (up to 3.5% for high income earners who don’t have private cover) which seems to work well. Doctors in Australia only earn about half as much as those in the US, but they have more holidays and report a greater work/life balance.
(For what it’s worth, average house sizes in Australia are reportedly the largest in the world… if you can afford them!)
Jack I have come around to that now. We still have to figure out a way to maintain the innovative medical devices and treatments we continue to create but the rest is a complete shit show. And I have my own business in the private sector. I pay more for shit coverages.
The standard of living makes us less competitive, which is why many U.S. factories were moved to low wage countries. The enforcement of anti trust laws would bring the cost of health care down. Also, a lot of the health problems are generated by the health care system, itself. There is a reason Senator Cassidy doesn’t want new studies on vaccines. He doesn’t want the truth exposed.
<<Unneeded bases would be canceled.>>
Everyone wants that. And yet, did you see what happened with the Chagos Islands recently? Pentagon will tell you “it’s either us or China, and when we go against Starmer this is what happens, so we should increase the budget to bribe Europeans to not let strategic locations go to China.”
<<Stupid programs would be cancelled>>
Do you know how many departments/offices and sub-offices Generals have? Most of them non-millitary complete nonsense, just studies about penguins to hire their friends’ kids. Talk to the Generals, good luck convincing them.
<<Instead, to promote cleanliness, allow soap and cleaning supplies.>>
Cleaning supplies are already dirt cheap in the USA, cheapest in the Western world. Cleanliness is a habit, irrespective of prices. You can make gyms free, lots of people will subscribe, same number will actually be going.
<<Heavily tax all executive stock options>>
All corporations will attack you, claiming that you deprive of them of talent. Remember what happened when they bailed out the banks? AIG kept paying the bonuses. Even colleges will attack you on that, because they’re selling their students promises of high bonuses later in life.
<<Make able bodied people work.>>
They’ll call you a racist in the North, and you’ll also lose tons of votes in the South. Everything is made in China, no jobs for Johnny. And you don’t want the tariffs either…
<<To encourage people to work instead of receiving tax credits, make the first $35,000 in income tax-free for everyone>>
Is that what you think Johnny’s problem was all along? The tax bracket??? Johnny can’t find a job, and if he does, it’s not even paying rent. And if Johnny asks for more money, Mish will tell him “no, because a higher salary is inflationary”.
Send your list to Trump. Maybe he will hire you!
Mish Top 12 Ideas; Take 2:
Proposal’s #1, #2, #3, #4, #5, #7, #9, #11, #13, #14, Agreed with 100%!!
Proposal #6: I would need a better overall understand of this issue, and it’s potential consequences. My issue.
Proposal #8: I would need a better overall understand of this issue, and it’s potential consequences. My issue.
Proposal #10: I would need a better overall understand of this issue, and it’s potential consequences. My issue.
Proposal #12: I would need a better overall understand of this issue, and it’s potential consequences. My issue.
(T2) Proposal #13: Also we need to do something about emergency and very costly procedures used to keep people alive who are expected to pass in the next 6 months anyway.
(T2) Proposal #14: putting more skin in the game on health care, especially Medicare. There is no incentive for anyone in the for discussion and welcome other ideas.
Great to see ideas that need to be considered or taken into account! It seems to me of late anyway, that everyone Has to Be Happy OR Feel like it Anyway… Just do “What Makes Sense” & “Right out of the Gate”, for me anyway, Pull the damn bandaids OFF. Get the shop righted by taken the sharp turn that is required to get you back on track! No More is Needed YET! No More is Expected YET! That Day will come, and soon enough, but make sure Your Still in Control of the Ship, to be able to steer it correctly!
Nicely Done Mish!!
I doubt that. Mike’s ideas are sensible ones however, you would instantly fall into depression for many years, the system is so corrupt & deficits so massive it’s beyond fixing, You’ll lose the reserve currency, you’ll default on the debt. a complete overhaul is required. Sheeple just do not get it, for more detailed answers study Rome, Great Britain, Spain, France, Netherlands, Portugal & many more. They were all once the wannabee big shots, the soon got humbled, the US is next & it’s it wont be decades or years either. The only unknown is whether they’ll burn it to the ground with war before they wake up from their delusions.
mish ideas is more fantasy like dungeons and dragons. no doubt you are correct. we are crumbling like all those other empires. i was in russia in 90s after USSR crumbled. i learned a great deal how people react to all being broke, together. our currency will go the way of the ruble, the italian lira, and the argentine peso in the next 4 years. gold has been best asset class so far in 21st century. just like all centuries before this.
Exactly!! Anyone who has a deep & real understanding of history, economics, mathematics & psychology can easily see the path this is going.
Correct, Mish ideas sound like high-school economics fantasies. I have an idea too!!! Let’s all walk! Walking is free and beneficial to health. And let’s all eat only healthy foods! And let’s all be honest!
Reality: everyone knows all those things, yet very few actually do them. It’s like the old “home gym equipment”. People bought the machines, which ended up in the basement unused.
PS. While we’re at it, let’s just call China and ask them to make products that adhere to Western health and safety regulations, and to stop building new coal plants every week. I’m sure just a phone call will do the job…
bwaaahhhh. exactly. i don’t have an auto. walk about 5 miles per day for life events. all those rich kids who have autos and think they are poor really crack me up. the best currency in a collapsing empire is good friends/family you trust and can ride it out helping each other. and of course gold and silver. i paid to buy and rehab homes with those metals. what worked in past centuries will work today. most of world still runs like 1800s. we chop down trees, send logs down rivers, cut em up, put them on trains and ships. and gold and silver still work as money.
<<the best currency in a collapsing empire is good friends/family you trust and can ride it out helping each other.>>
This is the main reason why in Greece, with unemployment during crisis periods hitting 20% and up, very few people (only in Athens) are homeless. It’s still a family culture. We may not like Cousin A, but we won’t leave him on the street.
I just forget to add, the US was never the envy of the world, you were just gifted with the reserve currency of the world which you abused to the point of ya own ruin. Americans are human beings like everyone else, ya’ll immigrants except of the natives. What makes you different?? Boy are you all gonna be humbled, ya country is dying & the fall will be greater than any other country in history.
the native amerikans walked here, and also took small boats hugging coast from asia to west coast of 2 amerikas. i don’t think they had passports or real ID.
I agree with you. This stuff or anything similar will not be done though. First you’re gonna have the courts stop you. Then hate is gonna rise up and you can’t stay in power. Before you accomplish anything you’ll be the villain and out of power, guaranteed! It cannot and will not be fixed. Everybody wants so much from government. Dream on, unless and until the general populous is behind it instead of being behind what government can do for them or how government can prosper them. Well, I don’t see that! All I see are socialists in power that want more of the same, when all the smoke clears.
Musk helped trump get elected and now hes supposedly realizing they are overspending. Please, people have known that for years, decades even, he’s faking it to get more publicity and doesnt really care, would support anyone to get favors for himself or his companies at the cost of us citizens. Just watch who he supports in any election from here on forward. If it isnt the libertarians or the very few conservatives like Massie or Paul, thats even further proof he’s lying. If he was serious he’d be tweeting telling everyone to quit voting for the deranged Republicans and Democrats who are bankrupting the usa.
he’s right.
A while back I posted, “On a 1 – 10, Trump is a two” and was accused of TDS (despite my voting for the clown three times). Sit back, grab a beverage of your choice, and watch how this plays out, folks.
TND….Trump Never Delivers.
So… this guy is complaining about entitlements and spending:
(Grok3 reports) Tesla’s Estimated Total Government Support (Since Founding)**
– **Direct Subsidies & Tax Breaks:** **$3B+** (factories, grants, tax abatements).
– **Regulatory Credit Sales (ZEV + Carbon):** **$9B+** (2010-2023).
– **Indirect Benefits** (consumer tax credits, charging infrastructure grants): **Billions more*
Plus billions of government nipple sucking dollars for SpaceX, Starlink, & do nothing DoD contracts not to mention the Fed’s QE which ballooned the stock market. THIS guy wants to cut Joe Schmoe’s Medicaid?
Watch for the BBB to smoothly pass reconciliation and give Musk the big fat throbbing finger. Woot!
[Thanks for your work Mish, always scads of fun!]
I hear a voice… it’s coming from under the bus…
Musk is full of shit. He ran around the government and claimed 250 year olds were getting social security (clearly thst was BS) and he didn’t bother to even take a tiny glimpse at the pentagon. He did exactly what I expected, pretty much nothing. He destroyed his brand while doing it. Now he’s trying to save some face. He suckles from the teet of the taxpayer quite a bit last time I checked. The guy is known compulsive liar, but people still value what he says. SMH….
Yup. Without government cheese he would have nothing. Born on third base and thinks he hit a home run.
Musk is an enthusiastic very young man (for his age), characteristic of all Silicon Valley (Elizabeth Holmes in the beginning really believed she could do it).
These are people with simplistic business ideas (“let’s fire 10,000 people to balance the budget“), but they can’t think of the next step (“what are you going to do now, with 10,000 more unemployed? Couldn’t you just reduce their salaries instead, and send them in departments where they are more needed?“).
Remember Google? “Don’t be evil” they said… kids.
Musk should have been used as a useful tech tool – Trump made a mistake bringing him too close. Musk can’t understand than in Politics you do what’s possible, and accounting is not everything; it’s only a part.
“ Trump made a mistake bringing him too close. ” wat? when the man who personally spent 260M to get you elected comes around you stand up and adress him as sir.
GDPNow 4.6%
Boom! Net exports jumped to 1.36 from a Q1 distorted low of -5.36.
My goodness what a difference tariffs make on a distorted the other way GDP . . . for now at least.
I’ll take it though. My bet is the MSM isn’t going to let Joe Merica know that the economy for the time being is moving along briskly.
Nice job, Trump! Keep your fingers crossed, because we all know a few months from now might paint a different story.
Re proposal #3: Please clarify. Do you mean slash all deductions or just all deductions unrelated to the production of income (Schedule A deductions, and adjustments to income such as retirement plan contributions, educator expenses, the QBID (qualified business income) deduction, and student loan interest), or are you proposing a tax on gross income (income not reduced by any expenses)? I believe that deductions directly related to producing business or investment income should continue to be available.
I mean all personal deductions, not corporate.
But I did not think about IRA contributions. I would allow those.
Agree 100%. Mish for POTUS!
Musk is starring in the remake of “Mr. Smith Goes to Washington”
Too bad Musk’s trashed credibility and reputation makes his opinion pretty much politically worthless.
Trump will get Elon deported. LOL
A couple comments, no new VAT tax while there’s an income tax. Congress will just increase both the VAT and the income tax and take more from from us. Cut the entire budget 10% across the board for starters and no budget increases except for natural population increases in those programs due to births and/or age adjustments.
“Just Can’t Stand It Anymore”
If the world’s richest man is impotent to impact change and he can’t stand it anymore then where does that leave everyone else?
Got exit strategy?
The rats are eating each other now.
Mish’s points could be adopted by Democrats to great benefit of us all. But Musk is just trying to maintain some relevancy by spilling the drinks. It will work.
The ole pinball game is about to “tilt”. When all else fails they take you to war.
Some people say your a dreamer, but you are not the only one. I have a more reasonable plan. Hire 10,000 magicians who will be able to spin straw into gold. Use that gold to pay off the national debt and provide free healthcare for all. We need to also hire Dr. Manhattan (watchmen) or Superman to protect us from all our enemies. This requires only two simple actions so it is much more likely than your fantasy. 🙂
This is a forum for serious economic discussion, and you as such your comment is ridiculous. Current US national debt is $37 trillion, and as of today gold is $3400 per oz., so we would need a total of 10,882,352,941 oz of gold to extinguish that debt.
An average magician can spin an average of 60 oz of gold each day from straw, assuming a base 12 point mana pool and that they are located in a mana-dense area for faster mana recovery. As such it would take 10,000 magicians working at least 18,137 days to spin enough gold to pay off the national debt (also assuming the increase in total supply did not affect the per oz. value of gold). 18,137 days is 49 years! Please double check your math before posting.
<<so we would need a total of 10,882,352,941 oz of gold to extinguish that debt>>
Plus, if we founded that much gold, its price would plummet (because it would not be rare anymore). And then we would start selling it, which would reduce its price even further.
On this one
“ Lower the individual tax rate and set the automatic deduction at $35,000. To make up for revenue lost, have a modest VAT but no tax on food, medicine, or shelter, the latter up to a base rate indexed for inflation.”
No no no no
F No
No no no
Unless it comes with a constitutional change that not only institutes the VAT, but provides hard limits on the largest percentage of their income anyone pays in federal taxes. Absent that in about 10 years we would have a 15% VAT plus our current income taxes. The entirety of increased revenue would be eaten up by new spending, and we’d wind up right where we are today only with federal spending at 30% of GDP. As you have said yourself it will be more of this in exchange for more of that only with a much bigger piggy bank.
I’m really looking forward to your post on Proposal #8. Should be very interesting.
Good grief, Mish is el fuego. Where does he find enough clones to write up all the posts he manages every week? My life is enhanced by your assiduousness. Thank you.
Your 12 point program is spot on and greatly benefit the country in the long term. My only change is that I would reduce military spending by 50%. Unfortunately it tramples on people so called ‘rights’ and is political suicide. As you know, it is not what is best for the country, it is what is best for the (uni)party.
Based on those proposals… Mish for President!
Just the first two were fantastic. Everything else is icing on the cake. Love the SNAP as well, and of course a simplified tax code.
I’d whack the military budget by 50% (David Stockmann has done the math on this) but 25% is a good start.
Bravo!
BTW I do recommend Tucker’s chat with Sen Ron Johnson, who really knows all this budget stuff. Obamacare was a deficit timebomb. Just go back to the pre-pandemic budget levels at least.
I want to add: Musk is the headline story on all MSM outlets now. That’s the clue that: It’s theater. It’s narrative. A perfect sound bite to appease the masses (for now).
Don’t worry, they’re going to pass a bill with deficits to the moon by July 4th.
This bill = Inflation. Inflation, Inflation, and more Inflation is in the cards, especially if the Ukraine war widens. Infest accordingly.
Democrats will find the votes if “too many” Republicans bow out. You can count on it.
Smoke and mirrors. Its the small no financial parts of the bill to keep trump in power we should be focused on.
Musk is an actor doing political theater. After just appearing buddy buddy with Trump at a social event, he’s bashing the “BIG BEAUTIFUL BILL”.
Bravo. Good acting. Not.
I heard DOGE projected savings (theoretical, not proven) are down to $150 billion. That’s enough to pay for the “Golden Dome” and more bombs for Israel. We could save $150 billion by doing away with just those 2 expenditures.
No, Musk is just naïve.
And very, very, VERY high.
Indeed. Musk (and most of Silicon Valley) is like a smiling Norwegian tourist in rural Pakistan.
On point 4, I don’t really understand how this works to keep people from employment. Could someone clarify for (an embarrassed) me?
What ya talking about?? Point 4 or proposal 4?
This (Proposal #4: End child tax credits and earned income credits, Make able bodied people work. To encourage people to work instead of receiving tax credits, make the first $35,000 in income tax-free for everyone.)?
Well if it’s this it’s full of assumptions, he is suggesting people get it too easy & so hit em with a stick by removing benefits & then making work pay better by allowing people to earn more before paying tax. This assumes there are jobs, full time jobs, ones they can qualify for. The reality is that’s fantasy really. There are no good jobs for the mass of people, they do not have the skills or education for what remains, corporations want more robots or computer not people. It’s a policy full of assumptions. Sounds great but not reality.
What I would say also is child tax credits or income credits are not a subsidy given to the people, it’s a subsidy given to corporations, how?? Well corporations rip workers off for higher profits & the Gov pays the extra so they do not starve or become homeless. This is what I mean about a system too corrupt to fix. The economy & system is fascist, if corporations & government didn’t collude against the citizens they wouldn’t need hand outs.
2 white trash drug addict hate mongers turn on each other. mark me as safe, from being surprised. it’s funny. really. democracy works. amerika is white trash empire of debt and warmongering.
Eliminate the income tax entirely. Get rid of the IRS altogether.
Replace with a VAT (or Fair Tax) and give rebates on the first $50,000 spent. Exempt anything that is fully recycled or sold from thrift stores (as an example).
This would have the effect of incentivizing work, but also reducing waste on the environment. I think our measurement of “growth” in economics is outdated, because it is entirely focused on incentivizing consumption of resources.
Desired growth should be savings, wealth, and permanent infrastructure, not one-time consumption. It’s just a shift in mindset, and it gets away from our debt-minded, instant gratification style society.
Your ideas assumes the politicians as well as the Grifter in Chief care about the country & it’s citizens, if that was so, you wouldn’t have such a corrupt system. The only way this gets fixed is revolution or total collapse, even then it’s so far gone you can’t possibly ever recover, no thief ever says I’ll steal less, only more until they are stopped by force or death.
Please explain why a VAT is better than a national sales tax? It would seem items will be taxed everytime its sold in the manufacturing process leading to a higher tax burden.
Already did.
A VAT does not double-tax
It is harder to avoid.
If a sales tax is imposed exclusively on final consumption, then VATs and sales taxes are economically identical. However, when the sales tax is applied to some intermediate transactions (“business inputs”), it results in tax pyramiding, where the tax is embedded in the price multiple times over.
Aren’t sales taxes only applied to the final buyer? Here in CA you can get a certificate that excludes you (a seller) from paying sales tax).
Most people who can do “remedial math” will agree with Musk.