Berkshire Hathaway CEO and well-known billionaire Warren Buffett recently said he could end the US deficit issue in just five minutes. Indeed, he discussed the impending debt crisis that has elicited warnings from noted finance experts like JPMorgan CEO Jamie Dimon.
For Buffett, the problem has a simple solution. Speaking to CNBC in 2011 he laid out a solution that he claims won’t take longer than five minutes to enact. Specifically, Buffett says he would pass a law that threatens Congress member’s seats for a deficit greater than 3%.
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Warren Buffett Shares 5-Minute US Debt Resolution
The growing US national debt has become an unavoidable problem. Budget deficits are projected to reach $1.9 trillion in 2024 while surpassing $2 trillion annually in the next six years. In 2034, reports show that figure is set to near $2.9 trillion, with public-held debt ballooning from $28 trillion now to $50 trillion in a decade.
However, Warren Buffett has a rather simple solution to end the US deficit problem. “I could end the deficit in five minutes,” Buffett told Becky Quick in 2011. “You just pass a law that says that any time there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”
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The solution is as simple as accountability. Charlie Munger, a business partner of Buffett, discussed how the plan aligns with the billionaire’s approach. “Show me the incentive, and I will show you the outcome.” For the US, remaining in Congress is the incentive to break the spending cycle.
A country that has introduced a similar legislation is Germany. They have instituted a hard cap on deficit spending. For the most part, it worked. The country has seen its most recent governments lower overall spending the past several years.
The winner of November’s presidential election will have to confront the deficit issue head-on. In May, the government had already spent $1.2 trillion more than it collected in 2024. Moreover, federal debt was already more than 97% of GDP in Q1. Whether it be Donald Trump or Joe Biden, maybe they ought to give Buffett’s solution a try.