Great insights, Danny! Curious to know your thoughts on three things:
1) related to Doge, economic impacts of Federal cost cutting on both direct and indirect employment
2) Immigration - seems a wildcard and potentially stagflationary if not done thoughtfully
3) I struggle with comparisons to Argentina - I get that Milei is validating the Chicago School, and is a good reminder for the US. But Argentina couldn't be any more different from the US economically and monetarily (understatement). Seems the tactics should be fit for purpose.
How are you? Great to hear from you. Thanks for your kind words...
1) Can't be good in general, but depends how much DOGE can cut... If meaningful, like Argentina, unemployment rate will probably increase initially. But the hope is that unemployment will improve as private sector picks up hiring. The whole idea is to shrink the govt, but increase the private sector.
2) yes, wildcard... if Trump really is going to deport millions of illegal immigrants, inflation is likely to go up. but also, unemployment will go down too (less supply)....
3) Yes, Argentina and the US are very different, but one aspect is the same... you can't have 7-8% budget deficit and assume the world will finance you forever. With $35 trillion federal debt and ~$2 trillion a year deficit in a $27 trillon economy, the US can easily get into Argentina problems of the past if they don't cut their budget (or increase taxes).
How's life? I live in LA now. If you ever visit, let me know; it would be great to catch up!
Great insights, Danny! Curious to know your thoughts on three things:
1) related to Doge, economic impacts of Federal cost cutting on both direct and indirect employment
2) Immigration - seems a wildcard and potentially stagflationary if not done thoughtfully
3) I struggle with comparisons to Argentina - I get that Milei is validating the Chicago School, and is a good reminder for the US. But Argentina couldn't be any more different from the US economically and monetarily (understatement). Seems the tactics should be fit for purpose.
Hi Jon,
How are you? Great to hear from you. Thanks for your kind words...
1) Can't be good in general, but depends how much DOGE can cut... If meaningful, like Argentina, unemployment rate will probably increase initially. But the hope is that unemployment will improve as private sector picks up hiring. The whole idea is to shrink the govt, but increase the private sector.
2) yes, wildcard... if Trump really is going to deport millions of illegal immigrants, inflation is likely to go up. but also, unemployment will go down too (less supply)....
3) Yes, Argentina and the US are very different, but one aspect is the same... you can't have 7-8% budget deficit and assume the world will finance you forever. With $35 trillion federal debt and ~$2 trillion a year deficit in a $27 trillon economy, the US can easily get into Argentina problems of the past if they don't cut their budget (or increase taxes).
How's life? I live in LA now. If you ever visit, let me know; it would be great to catch up!
Regards,
Danny