U.S. Treasury Sec. Bessent outlines a 3-part ‘three-legged stool’ for economic recovery:
1) De-lever government (cut spending) while avoiding a recession
2) Deregulate so the private sector can safely re-lever
3) Reorder international trading system (e.g. via tariffs) to bring… pic.twitter.com/XDCkhjQNGj— Wall St Engine (@wallstengine) March 19, 2025
U.S. Treasury Secretary Bessent has laid out a sobering three-step plan to address the nation’s economic troubles. But, let’s face it, the reality is much darker than any proposed solution can fix in the short term. It’s a simple fact that Washington’s out-of-control spending is threatening to cripple the economy, and this latest “three-legged stool” is more like a desperate scramble for stability.
Bessent’s plan starts with the obvious: cut spending while trying to avoid pushing the country into recession. Sounds good, right? But here’s the problem. U.S. government spending has reached a level that’s entirely unsustainable. Federal, state, and local expenditures now make up a staggering 33.9% of the nation’s GDP. That’s a record figure, excluding major crisis periods. Remember 2020 when spending hit 42%? We were in the middle of a pandemic, and even then, it was absurd. But this? This is the norm now.
Looking back, the 2008 financial crisis and even World War II didn’t see government spending stretch anywhere near this far. Those crises peaked at 36.9% and 36.1%, respectively. The current trend is showing how deeply entrenched the problem has become. For the last five months, the government has spent $3.04 trillion while only managing to collect $1.89 trillion in taxes. That’s a hole that’s only getting deeper, with no easy way to climb out.
And it gets worse. In February alone, the government spent $603 billion—that’s twice the tax revenue of $296 billion for the month. The spending-to-revenue imbalance is staggering, and it’s clear that this is a crisis, not just a passing issue. Bessent’s plan might sound good, but these are band-aid solutions at best.
The truth is this: the U.S. doesn’t have a revenue problem—it has a spending problem. Until the government faces that reality and takes real action to rein in spending, the economic recovery will remain a pipe dream.
US government spending is out of control:
Federal, state, and local government expenditures now reflect 33.9% of US GDP, a record excluding crisis periods.
The all-time high was set in 2020, when expenditures accounted for 42.0% of GDP.
By comparison, during the 2008 Financial… pic.twitter.com/e9oQYOliK7
— The Kobeissi Letter (@KobeissiLetter) March 19, 2025
