Tag: trade
Welcome to the New Era: Treasury Secretary Scott Bessent and the Plan to Rebuild America
By William Cork
On a day that began with a tour through the West Wing, conversations with Elon Musk and David Sacks, and a detour through the White House soda machine, the All-In crew capped things off with a marathon sit-down with Treasury Secretary Scott Bessent. It was more than just another podcast episode—it was a 90-minute masterclass in how the Trump administration is trying to rewire the U.S. economy for sustainability, growth, and national security.
Scott Bessent, former macro investor and now 79th Secretary of the Treasury, is not a politician. That’s what makes this conversation so important.
“I’ve been in this building seven weeks. President Trump’s been back in the White House for eight. But we’re not here to take a victory lap. We’re here to fix what’s broken.”
This isn’t your usual D.C. doublespeak. Bessent lays out a clear, three-part plan: delever the government, deregulate the private sector, and drive a strategic reindustrialization of America.
Debt and Deficit: “We don’t have a revenue problem. We have a spending problem.”
Let’s start with the elephant in the room: the U.S. debt and deficit. Under Biden, spending ballooned to 25% of GDP, well above the 21% historical norm. Bessent puts it plainly:
“We’re going to deflate it slowly. Our goal is to get back to 3% deficit to GDP by 2028.”
The Trump administration’s goal isn’t a slash-and-burn austerity model, but a long glide path to discipline.
“Every $300 billion we cut is about 1% of GDP. You try to do that too fast, you’re landing the plane in a nosedive.”
Instead, Bessent frames it like a macro investor would: strategic deleveraging on the public side, while enabling productive releveraging in the private sector.
“We’re going to cut spending in a controlled way. At the same time, deregulate so the private sector can pick up the slack.”
The vision is a leaner federal government with fewer contractors, fewer overlapping regulations, and a smaller footprint—one that clears the runway for private growth.
Main Street vs. Wall Street: “It was driving me crazy when Kamala Harris said she was fighting for the middle class.”
Bessent is relentless on one theme: the Biden years eviscerated the American middle class. Inflation didn’t just rise—it hit people without assets the hardest.
“If you had stocks, great. But if you didn’t, the cost of everything inflated and you had no way to catch up. It was fundamentally unfair.”
He points to the ‘Everyman Index’ from Strategas that shows inflation for working families was closer to 35%, not the 22% reported in CPI.
“Used car prices. Car insurance. Rent. Groceries. If you’re in the bottom 50%, you got hammered. And people noticed.”
And that’s why Trump is running again. Bessent didn’t mince words:
“About 18 months ago, I told President Trump I wanted to get involved. Because we were going to the point of no return.”
His critique of the Democrats is both technical and philosophical:
“They spent like we were in a war. Or in a depression. We were in neither. It was cynical. Spend now, raise taxes later, trap the country in a European-style social democracy.”
Macro View: How a Soros Alum Is Rethinking the American Economy
This isn’t just political revenge—it’s deeply grounded in a macro investor’s worldview. Bessent’s resume reads like a who’s-who of Wall Street legends: trained by Jim Rogers, mentored by Stan Druckenmiller, former CIO at Soros Fund Management.
He walked through the famed 1992 trade that broke the Bank of England, describing the kind of asymmetric thinking that now guides policy:
“I realized British mortgages were floating rate. If they raised rates to protect the pound, homeowners would be bankrupted.”
“Stan said, why not bet the fund? Soros replied, ‘Why not three times that?’”
That’s not bluster—it’s a strategic worldview. What’s unsustainable will break. Policy should anticipate that, not react.
Deregulation: “Why do small banks have to hold the same capital as JPMorgan?”
One of the sharpest lines in the entire interview came when Bessent addressed the regulatory overhang:
“Small banks are 70% of ag loans and 40% of small business loans. They’ve been suffocated by overregulation.”
The plan? Undo the financial corset:
- Reassess Basel frameworks
- Repeal duplicative capital requirements
- End one-size-fits-all rules for small banks
He even suggested a technical fix to the Supplementary Leverage Ratio that could shave 30–70 basis points off Treasury yields.
“Every basis point we save is a billion dollars per year.”
Trade and Tariffs: “We’re reordering the international trading system.”
The second pillar of the strategy is reindustrialization. This means:
- Targeted tariffs to shift supply chains
- Low and predictable tax rates
- Radical deregulation
- Cheap, abundant energy
“We can’t crush labor like China. So we’ve got to crush energy prices.”
It’s a nationalist economic strategy—but designed for resilience, not isolation.
“The goal isn’t protectionism. It’s fairness. Predictability. And getting the U.S. back into the game.”
The Sovereign Wealth Fund: “We’re going to mobilize the asset side of the balance sheet.”
Perhaps the most transformational idea? A U.S. sovereign wealth fund. Bessent, alongside Doug Burgum and Howard Lutnick, is leading the charge.
“Why does Social Security sit in Treasuries? Why can’t it participate in the American economy?”
He cites the models in Alaska, North Dakota, even Australia:
“We want to create assets for the American people—not just debt.”
The fund will be built on federal assets: energy leases, urban land, and future privatizations. The goal is to beat the 10-year Treasury rate and offer every citizen a stake in national prosperity.
“The idea is compounding. Compounding security. Compounding hope.”
The Culture of Reform: “It’s the Department of Government Efficiency, not Government Elimination.”
Bessent was candid about the institutional resistance in Washington:
“Within a 10-mile radius, 25% of U.S. GDP pulsates through here. Everyone wants to skim a little.”
But he’s not on a warpath against federal workers:
“The people here are great. I’d hire many of them in my private firm. It’s the system that’s broken.”
From IRS reform to AI-driven tax compliance to slashing contractor grift, this is a modernization agenda—not a demolition job.
“We’re not trying to cut government. We’re trying to make it smarter. More responsive. More accountable.”
On President Trump: “He regards himself as the Mayor of America.”
Bessent had nothing but praise for Trump’s instincts, memory, and humanity:
“He listens. He takes it all in. And he cares about everyone—whether you’re Elon Musk or the guy cutting the Rose Garden.”
And the tone of this administration?
“This isn’t about ideology. It’s about effectiveness.”
Final Word: Affordability, Growth, and a Return to Common Sense
From supply chain czars to energy reform to housing deregulation, Bessent made one thing clear: the affordability crisis is real—and solvable.
“Inflation is quiet. But affordability got away from people. We’re going to fix that.”
This is the plan. It’s detailed. It’s bold. And it’s rooted in market logic, not bureaucratic inertia.
America is at a crossroads. Scott Bessent is making sure we take the path that leads not just to recovery—but to renewal.
Here’s the full episode and worth a watch!
Bill Cork 