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David Woo: ‘Impossible for DOGE to Cut Gov’t Spending Without Slashing Defense Budget’

There is a lot hype and talk around the appointment of Elon Musk and Vivek Ramaswamy to head Trump’s “Department of Government Efficiency” or DOGE. But how realistic are their lofty ambitions – when faced with the realities an imperial state whose federal resources revolve around the business of war? 

Economic commentator David Woo says…

“Trump has promised to make permanent his 2017 tax cuts that are set to expire at the end of 2025. However, his decision to nominate Scott Bessent, a fiscal hawk, as his Treasury secretary, over the objection of Elon Musk, suggests that he understands the danger of adding to the national debt at a time when annual interest payments are well over 1 trillion dollars. This is likely also why Trump has charged Musk and Vivek Ramaswamy with identifying $500 billion dollars worth of annual spending cuts. Trump understands that to keep the bond market calm and the Fed on its interest rate cutting path, he needs to do more than pay lip service to debt sustainability. The challenge that Musk and Ramaswamy face is that most of federal spending is mandatory expenditures that are beyond their reach. This mean that they have to find cuts in discretionary spending that accounts for just 26% of total federal spending. With defense spending accounting for 56% of federal discretionary spending, it would be impossible to cut $500 billion dollars without reducing defense spending. To go after defense spending, Trump has to end the Ukraine war that has become a gravy train for the military industrial complex. What this means is that ending the Ukraine war is not only a foreign policy goal for Trump but it is central to his economic plan. Defense stock are down since the election but they are still up on the year. If DeSantis replaces Hegseth as Trump’s nominee as defense secretary, defense stocks have plenty of room to fall.”

David Woo, a former top-ranked Wall Street global macro strategist tells it as it is. Watch: 

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Get Your Copy of New Dawn Magazine #203 - Mar-Apr Issue
Get Your Copy of New Dawn Magazine #203 - Mar-Apr Issue