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In American elections there is a long and curious practice of “money flipping.” These are legal funds distributed to party officials to help get out the vote.
Most famously, it was used by John F. Kennedy’s primary campaign in West Virginia in 1960, when the candidate’s wealthy father, Joe, organized the delivery of suitcases of cash to voters in one of the poorest states. .
Campaigning in Pennsylvania for his Nov. 5 election, Donald Trump, billionaire Elon Musk has put a strange twist on an old practice.
The Tesla, Space X and
Debt buster: Tesla, Space X and X mogul Elon Musk (pictured) said if Donald Trump is elected president, he would support a new ‘Department of Efficiency’
Musk is campaigning for the Republican candidate with a manifesto of cutting public spending.
It’s a topic we heard little about in the run-up to next week’s first Labor budget, where all the early leaks have focused on tax rises.
Musk is learning lessons from his experience at social media site X, formerly Twitter, which he bought for $44 billion in 2024.
Since taking over, Musk has savagely attacked headcount, laying off 80 percent of the workforce and displacing people with artificial intelligence (AI).
He tells his Pennsylvania audience that if Trump is elected, he would support a new “Department of Efficiency.” It seems unlikely that Musk himself could be in charge given the numerous conflicts of interest.
Musk is right. The International Monetary Fund, which holds its annual meeting here in Washington this week, has identified the $100 trillion global debt as a cause for concern.
He cites the United States and Britain as countries that need to take early steps to restore stability to public finances.
In past US election campaigns, the scale of government spending and debt has often been an important feature. In the current run-up to the vote, only Musk is capitalizing on the issue.
Data from the United States Congressional Budget Office (CBO), a US-style Budget Responsibility Office, suggests that the US national debt, which remained at an average of 48.3 percent of the national wealth in the half century to 2023, will increase to 122.4 percent. percent of production by 2034.
Both presidential candidates have outlined plans that can only increase America’s debt overhang.
It estimates that the policies of Trump and Democratic candidate Kamala Harris would add $7.5 trillion and $3.5 trillion, respectively, to the debt over the next decade.
This is largely due to the refusal to cut Social Security (welfare and pension payments) and state-supported medical programs.
Musk believes he can do better using artificial intelligence and efficiency.
Unlike the candidates, including Trump himself, he at least has a plan.
russian roulette
The squandering of US debt is one of the reasons for the renaissance of gold, which in recent trading reached a record high of $2,740 an ounce. It has also been driving down the price of 10-year U.S. bonds, which currently yield a hefty 4.1 percent.
Markets are also concerned about deepening geopolitical risks. This will also be a central theme in Washington at the IMF and World Bank sessions.
The BRICS (Brazil, Russia, India, China and South Africa) meeting in Kazan, Russia, have a very different agenda.
This powerful group, once seen as the great hope for future global growth, is increasingly alienated from Western democracies.
Most oppose the United States’ unwavering support for Israel in its conflict with its proxies in Iran and the funding by the United States and Europe of Ukraine’s defense against Russian aggression.
Today, Britain is releasing £2.26 billion in interest from frozen Russian assets to support Ukraine as part of a broader $50 billion European program.
The Russian-sponsored summit, attended by Chinese President Xi Jinping and Indian President Narendra Modi, is looking at ways to reduce the dollar’s role as a reserve currency.
Anyone interested in rubles?
slow trainer
Bank of England Governor Andrew Bailey is sure to face questions at the IMF this week about why the Bank is so slow to cut the UK bank rate, currently stuck at 5 per cent.
Perhaps the Bank should pay attention to Goldman Sachs analysis that projects the bank rate will fall to 2.75 percent this time next year. It’s time to move on.
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