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Trumpy Tech-bros look at the Big, Ugly, Bill and are terrified [1]

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Date: 2025-05-24

Once in awhile I try to check out some of what the other side is saying about current events. I listened to one podcast this morning, All-In, that features some guys from tech that are very conservative (bios snippets below). They love DOGE, they love austerity, they want Trump to succeed. But they are not crazy MAGA and seem to have one foot on the ground. I have listened to parts of other episodes and there is nary a bad word about Trump actions. So this came as a shock: these guys see this “Big, Beautiful Bill” causing serious financial damage. They say that the interest rates that the CBO is using are way too low, and that rates are going even higher. This bill is even worse than I imagined. I am no financial expert, but it sure looks like it could cause a recession at best, depression at worst.

Here are key excerpts, with minor editing on my part:

Friedberg: “Now interest payments have to be paid every year and so I thought was really worth sharing the CBO estimates which is what you referenced Jason are estimates of what the cost is going to be over time. This is from Jessica RLE or Ridle out of Manhattan Institute put this chart together budget Office yeah so the Congressional Budget Office the CBO creates an estimate of the budget the spending and the deficit and ultimately the incremental debt that the US government will need to issue to fund its obligations over time this is a chart that was put together that the expectation on a baseline basis is that over the next 30 years or so US debt to GDP will climb to 203%. But what a lot of people don't know and don't talk about is that in the CBO estimates they assume in all of their models that interest rates are at 3.6% and with the bond selloff yesterday what we are now seeing is 30-year Treasury interest rates at over 5% it's 5.1% this morning and for every incremental 1% above 3.6 six your spending an extra 350 billion a year in interest! 350 billion a year so as we go up by 1.5% interest over the next 10 years. We're spending another 5 trillion just on interest payments half a billion dollars after trillion dollars a year of incremental interest on the difference between 3.6 and 5.1. What the market is telling us is that the current bill that's being passed out of the house is showing such an extraordinarily high deficit that the market does not want to buy the debt from the government rates are now climbing and that creates a massive problem for the government We thought we were going to get uh an administration and maybe um some focus from the government that we would be have more austerity measures balance the budget now it looks like we're going to pour gasoline on the fire. “

And:

Palihapitiya: “That lack of discipline is going to create I think a negative set of consequences. So what are those consequences? Today the ten year is around 4.5% at the rate in which it's escalating since liberation day by the end of this year we're going to be past 5%. The 30 year is on a rate now to get past 6 and a quarter maybe even reach 6 1/2%. Those are way beyond what most people thought was a reasonable place to be for the United States economy and so what will the implications be as rates go to those levels you'll delever from the United States you'll sell US debt you'll own things like gold and Bitcoin. If you're curious about what's happening to gold and Bitcoin they started to spike in the last few days. You'll have ratings organizations that add to this cascade by downgrading the United States that happened on Friday. You'll have very smart people starting to signal that this is a much harder problem than they initially thought. What they were supposed to do was implement some form of austerity they were supposed to by the will of the people, pass a recision bill they were given that recision bill it was just $9 Billion. They couldn't even pass a $9 billion recision and instead they passed a $4 trillion inflation to our debt. Now you hand this to the Senate, the Senate is in a very difficult place as well do they want to quote unquote claim victory and say "Here you go President Trump here's your bill." But they'll further bastardize this thing and it will be even further away from what I think benefits MAGA and benefits Main Street. So who does it benefit current course and speed right now. This bill is about traditional Republicans and traditional Democrats circling the wagon and putting on a platter a set of things that I think will be hurtful to average Americans. You're going to see energy prices spike. You're gutting the number of electrons that will be available for things like AI. You're going to increase Medicare prices and the math is wrong so when you sensitize this thing to a 4 and a half or five and a quarter rate. So meaning not what the CBO used but the real conditions on the ground. This thing is an albatross and I think unfortunately for President Trump's agenda and for a MAGA movement this is the worst of all conditions. The financial markets will punish this.

From their website, here are short descriptions of their backgrounds: (their website is allin dot com, but no https so I am not posting the real link here.)

Jason Calacanis is a technology entrepreneur, fund manager, host of This Week in Startups podcast and co-host and executive producer of the All-In Podcast.

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