Investing legend Warren Buffett is known for his wisdom and easy to remember quips.
His most famous quote, which advises us to “be fearful when others are greedy and greedy when others are fearful,” is hailed as some of the best investing advice for the modern market.
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But he has plenty of other one-liners.
Some of Warren Buffett’s most famous quotes include:
“Someone’s sitting in the shade today because someone planted a tree a long time ago.””Price is what you pay. Value is what you get.””It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.””The worst sort of business is one that grows rapidly, requires significant capital to engender the growth and then earns little or no money.””It’s never paid to bet against America. We come through things, but it’s not always a smooth ride.””It takes 20 years to build a reputation and five minutes to ruin it.””Rule number one is never lose money. Rule number two is never forget rule number one.”
Buffett has dozens upon dozens of helpful tidbits that he’s shared throughout his 93 years and ownership of about 65 companies via the company he leads, Berkshire Hathaway (BRK.A) – Get Free Report (BRK.B) – Get Free Report.
And now Buffett is offering up another piece of free and simple advice, this time on the subject of the U.S. economy.
Buffett offers simple advice on U.S. deficit
The U.S. deficit continues to widen. In fiscal year 2022 the government ran a deficit of $1.4 trillion. In 2023 it climbed to $1.7 trillion — or $320 billion (23%) more than the previous year.
“Revenues decreased by $457 billion (9%) and outlays decreased by $83 billion (1%) year-over-year,” the Bipartisan Policy Center writes. “Outlays were impacted by the Federal Reserve’s six interest rate hikes since October 2022, which pushed the federal funds rate to a 22-year high of 5.25% to 5.5%, raising debt servicing costs by $177 billion (33%).”
It cited Fed interest rate hikes and changes in student loan policies, as payments resumed, as two main reasons for the widening deficit.
But Warren Buffett has a simple way to stop the increasing debt.
It comes from a clip taken in 2011, when CNBC’s Becky Quick asked the billionaire investor what he might do to solve the growing problem. The clip has since resurfaced online.
“I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of
Congress are ineligible for reelection,” he said,
“Now you’ve got the incentives in the right place. So it’s capable of being done. … A more effective threat would be just to say, if you guys can’t get it done, we’ll get some other guys to get it done.”
Warren Buffet explains how he can end the US deficit within 5 minutes pic.twitter.com/voe5bX0IZx
— Historic Vids (@historyinmemes) July 11, 2023
Musk responds to Buffett’s deficit idea
Elon Musk responded to the video, saying, “Incentives matter. The current system incentivizes overspending, so we get overspending.”
“Works for me. And let’s include the corrupt senate too,” another wrote about Buffett’s solution.
“Nor should they be paid from that point on,” another user suggested.
“You’d also have to make them ineligible for working as lobbyists,” one pointed out.
“So many things can be solved this way, the problem is unfortunately not that easy. If they fix things like this there is no more opportunity to steal cash from the tax payers and thus not lucrative anymore,” another said.
