Kennedy: I Can Do What Milei Did

US presidential hopeful Robert F. Kennedy Jr has said he will adopt the same approach as Argentina's budget-slashing new leader.

Is it even possible to bring America's debt under control?

In these times of high inflation, higher interest rates, and sky-high debt, the position of "Fiscally-responsible politician" has been vacant for some time.

Enter Javier Milei, Argentina's chainsaw-wielding populist president, who just balanced the country's books by slashing government agency budgets, cutting fat until the country saw its first monthly budget surplus in twelve years.

While there's no way of knowing what the long-term consequences or collateral damage of his hardline approach will be (good and bad), it's impressive just to know that it can be done, and that there's someone willing to do it.

US Debt To Hit $40 Trillion By End Of Next Year
US debt is set to spiral by another $20 trillion in a decade, and there’s little hope that either Republicans or Democrats will bring it under control.

Now the US has its own Milei disciple, independent presidential candidate, Robert F. Kennedy Jr.

Anything You Can Do...

Over the weekend, Kennedy tweeted that he was prepared to do the same for the US.

"After just 9 weeks of Javier Milei in power, the government of Argentina has its first budget surplus in over 12 years. In US terms, Milei turned a 1.2 trillion-dollar annual deficit into a 400 billion surplus. It’s possible here too. Unlike my predecessors, I’ll actually drain the swamp and fire the bureaucrats who’ve racked up $34 trillion of debt."

Kennedy, who already has one of the most recognizable names in politics thanks to being born into the Kennedy dynasty, has attracted further fame, acclaim, and controversy over his various outspoken beliefs about the coronavirus pandemic and vaccines, among other things.

Laying Down The Gauntlet

US debt is on a dire trajectory. Currently above $34 trillion, it's forecast to increase to $54 trillion within ten years. 40% of tax receipts are required simply to pay the interest on the debt. The country has to borrow more to stand still. As Jay Powell recently noted, this is unsustainable, and yet few politicians have shown any real ability or even inclination to do anything about it.

Jay Powell: US Debt Is “Unsustainable”
Even the Federal Reserve Chair is sounding alarm bells about the size and unsustainability of the national debt.

While Kennedy himself is unlikely to end up in the White House, his words may be taken as a challenge to other members of Congress to step up their game.

As we've noted before, there are only three ways that the US can pay down its debt. One is increasing taxes and/or cutting spending: Balancing the budget the "traditional" way. That's politically unpalatable at a time of squeezed spending and citizens who are already struggling to make ends meet, but it might be the best of a bad set of options.

The next is money printing, debasing the currency to pay its obligations. That would be inflationary, and possibly hyper-inflationary: Again, an indictment of the US's policies and politicians, and something that would bring enormous pain to ordinary Americans.

The last is default, which would have serious long-term consequences and would irreparably damage America's standing on the world stage (as well as its ability to borrow money in the future).

America's debt is a problem. A huge, and rapidly-growing problem. And it's one far too large to sweep under the carpet.

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