Danny Moses, known for predicting the 2008 financial crisis, warns that federal government cuts led by Elon Musk will have significant negative effects on the economy. In an interview, Moses stated that the reductions are underappreciated and could lead to critical revenue loss. He noted that while federal expenditure impacts maintenance and support for states, cuts hinder economic momentum. Despite the perception of savings from government efficiency efforts, the long-term consequences of reduced spending must be considered, especially given past market reactions to political changes.
I think we are underestimating the impact to the economy of the cuts we're making at the federal government, and what that might mean [for] the knock-on effects into the economy.
It's not as simple as just, 'We think there's fraud, let's cut without understanding the broader ramifications on the economy.'
When federal spending is not used to maintain critical infrastructure, prop up entire states' revenues, or grease the wheels of finance, it impacts the economy directly.
Stocks ironically soared after Donald Trump's election, despite clear indications on the campaign trail that his policies would sow uncertainty.
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