When billionaire investor Warren Buffett speaks, the world usually listens. And even when the “Oracle Of Omaha” has said something prescient in the past, it keeps popping up in the present. The latest recall on social media centers around Buffett’s quick-fix solution to the U.S. debt crisis.
An old video of the Berkshire Hathaway CEO circulated on Twitter, and even got a reaction from Tesla Inc Chief Elon Musk.
“I could end the deficit in five minutes,” said Buffett in a 2011 CNBC interview with Becky Quick.
“You just pass a law that says that any time there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election. Yeah, yeah, now you’ve got the incentives in the right place, right?”
When the video clip was shared on Twitter, Musk and economist Peter Schiff offered their takes.
“The current system incentivizes overspending, so we get overspending,” said Musk in tweet in regard to incentives.
Replying to Musk, Schiff said most of the spending is unconstitutional. “If the Supreme Court would only enforce the Constitution we would not have this problem,” he added.
Buffett’s idea for resolution may have been said in jest. But it could be important against the backdrop of a ballooning budgetary deficit. The U.S. has the dubious distinction of being the nation with the biggest debt. Its debt totaled a record $31.4 trillion as successive governments through tax cuts and excessive spending piled up debt. Both Republicans and Democrats take an equal share of the blame.
About $24.6 trillion or 78.3% of the debt is held by the public in the form of securities such as bills, notes, and bonds, issued by the Treasury Department.
When the debt crisis loomed large, ideological differences among lawmakers on either side of the aisle led to a stalemate. While GOP members called for deep spending cuts, the Democrats under President Joe Biden clamored for increasing revenue sources. After prolonged negotiations, the president and Speaker Kevin McCarthy (R-Calif) finally clinched a deal. They agreed to suspend the debt limit until after the next presidential election.
Biden is facing a 40% approval rating going into the general election as he faces a challenge from Robert F. Kennedy Democratic primary and a possible rematch in the general election.
It is expected that the Federal Reserve will increase the interest rate by a quarter percentage point within coming weeks.
The current interest rate is sitting at 4% as many Americans continue to struggle with the high rise of inflation.
Produced in association with Benzinga
Edited by Alberto Arellano and Joseph Hammond
