The Trump-Musk Battle

I was all set to write about a very serious and very important topic today, but I've put it on the back burner because I simply cannot stop myself from addressing the fight between cult leader, convicted felon, and failed President Donald Trump and Shadow President Elon Musk. At the same time, I am going to address financial and economic topics that are somewhat outside my area of expertise. The poster who constantly accuses me of writing about things that I don't understand will probably have a field day today. Nevertheless, dumb as I am, I have a proposed solution that will be good for Trump, good for Musk, and good for the country.

First, for those who spent yesterday in a cave and missed the Trump-Musk cage match, it actually started in late May before Musk had officially left his White House job as a Special Government Employee. Referring to the One Big Beautiful Bill, as the reconciliation act has been officially named, Musk told CBS Sunday Morning that "I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing." His remark was mostly either ignored or shrugged off by Trump and other Republicans. Then, on Tuesday, Musk tweeted his disgust with the spending bill saying, "I’m sorry, but I just can’t stand it anymore" and that "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination." Musk concluded by writing, "Shame on those who voted for it: you know you did wrong. You know it." Yesterday, Musk went even further, telling his X followers to contact their Senators and Congressional representatives and tell them to "KILL the BILL".

Finally, Trump decided to return fire. He first accused Musk of suffering from "Trump Derangement Syndrome". Then he took the gloves off. Trump posted on Truth Social that, "Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!" When Musk responded that, without him, "Trump would have lost the election", Trump suggested that "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts." Things only went downhill from there with Musk eventually suggesting that Trump was included in the Epstein Files and agreeing with a tweet saying that Trump should be impeached.

The Trump-Musk rift was probably the most predicted event in the history of predicted events. Almost everyone has been expecting it from day one. Now that it is here, my first instinct was to empty my retirement accounts and invest everything in popcorn. But, as fun as politics can be, we are talking about real life. What happens with the bill being debated will have real impacts on all of us. It can affect who gets healthcare, who has a job in a few months, and the direction of our economy. So, while some levity is good — in fact, much needed — we also must look at the serious side of things. On that, I have some thoughts.

In the beginning of March, I wrote a blog post titled, "What Might be Motivating Musk" in which I suggested that Musk might not care too much about income tax rates, but instead was primarily worried about interest rates. My theory was that most years Musk pays very little income tax. However, both he and his companies have huge amounts of loans. As a result, interest rates impact him much more than tax rates. I thought that this explained his fixation on cutting government spending. In that post, I documented Musk's history of suggesting that inflation is caused by government spending and that inflation leads to higher interest rates. Therefore, cutting government spending, according to Musk, should reduce inflation. Related to this concern is the national debt and budget deficit. Increased debt can also lead to higher interest rates. In Musk's critique of the One Big Beautiful Bill, he has repeatedly fixated on the fact that it increases the deficit, probably because of his concerns about the impact on interest rates. I suspect that Musk's current obsession with the deficit can be explained almost entirely by his concern about interest rates.

When addressing a budget deficit, there are two tactics. One is to reduce spending, hence the Republicans' current attempts at cutting nearly everything that is not nailed down other than defense (for which they increase spending). The second is to increase revenue, which primarily means taxation. The One Big Beautiful Bill, however, contains tax cuts. But if Musk doesn't care about tax rates, he might be convinced to support removing them. In fact, if tax increases were reserved for the wealthy, that would probably be popular and a political win for whomever was responsible for it. Steve Bannon has been a strong advocate for increasing taxes on the rich, saying at the end of last year that, "I’m for a dramatic increase in corporate taxes. We have to increase taxes on the wealthy." Even Trump himself has previously said that he is okay with a tax increase on the rich, but he is afraid of Democrats mocking him. He posted on Truth Social that "The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming,‘Read my lips’". Trump went on to say, "Republicans should probably not do it, but I’m OK if they do!!!" Yesterday Musk retweeted a tweet that concluded by saying, "Drop the tax cuts, cut some pork, get the bill through."

My suggestion, therefore, is that Trump, Musk, and Bannon work together to encourage Congress to come up with a deficit-neutral bill by reducing tax cuts for the wealthy. This shouldn't be that difficult. According to the Congressional Budget Office, the current legislation has $3.75 trillion in tax cuts and increases the deficit by $2.4 trillion. So, reduce the tax cuts to $1.35 trillion and Bob's your uncle. Perhaps it's not that easy, but the principle stands regardless. Spending cuts can still be included. Trump claims that Musk is upset that electric vehicle subsidies were dropped. However, Musk has repeatedly said that he supports removing EV subsidies if petroleum subsidies are also cut. So, cut those as well. That will make Musk happy and will be better for the environment. Yes, oil lobbyists will scream and holler, but who cares? The richest man in the world and the President of the United States present a pretty formidable team. If this sort of budget were passed, the bond market would love it. The stock market would (I guess, contrary to conventional wisdom) likely also go wild. Such a bill could even get support from some Democrats. John Fetterman, for example, wouldn't be able to contain himself in his eagerness to support such a bill. There are a number of issues that I have with the One Big Beautiful Bill and I probably wouldn't like anything with which Trump and Musk come up with, but what I am proposing here is far better than the alternative.

The Trump-Musk contretemps are great entertainment, and I am completely here for it. But their quarrel might also present an opportunity. I am just a lowly website owner without any particular expertise, but I still think this is a sensible idea. It has its downsides, of course. We would have to put up with Trump gloating about reducing the deficit (or at least not increasing it). But I, for one, am willing to make the sacrifice.