To investors,
I published a 2-hour conversation with Cantor Fitzgerald CEO Howard Lutnick yesterday. The reception has been very positive, including a number of people saying it is the best conversation we have ever recorded.
Howard and I spent a good amount of time talking about the national debt. I expected him to harp on the nearly $2 trillion annual deficit that the government runs and he did not disappoint. An interesting data point during this part of the conversation was Howard’s story about Elon Musk and the Department of Government Efficiency (DOGE).
Howard believes Elon can reduce government spending by approximately $500 billion per year. As you can imagine, Elon is excited about the challenge of finding inefficiency and firing bureaucrats. Think Elon slashing costs at Twitter post-acquisition, but for the government.
No one thinks the government is efficient. In fact, almost everyone agrees the government has a spending problem, but either through lack of courage or skill we have not had anyone able to wrangle the out-of-control spending from the politicians.
Maybe DOGE could be successful. Maybe not. But even if Howard, Elon, and the newly formed DOGE could reduce spending by $500 billion, that would still leave about $1.5 trillion annual deficit.
This is where things get interesting — Howard explains how a new administration could go on offense to drive more revenue for the federal government. By now you have probably heard the idea of using tariffs to increase revenue and decrease our dependence on foreign goods, but Howard shared another idea that I had not heard before.
The United States has a ~ $500 trillion balance sheet. We have never had an administration look at the balance sheet as an asset that can generate revenue. Howard’s idea is to use the significant assets to drive a 0.25% return or better annually.
This balance sheet is made up of buildings, land, mineral rights, and many other assets. Any revenue generated from the assets would help to close the additional deficit left over from whatever DOGE can reduce.
Is it possible? Maybe. It is nearly impossible to tell at the moment. But the idea of trying to pull these new levers is worth exploring. The spending problem is not going away, so we need to figure out other avenues for revenue without increasing taxes on individuals.
I rarely tell you all to watch an episode of the podcast, but this one is a “highly recommend” from me. Many viewers are saying it is the best episode we have ever published, regardless of which side of the aisle you sit on.
As a bonus, Howard tells his personal story at the end. The story is one of resilience and perseverance. He lost both his parents at a young age and then watched as more than 650 of his employees died in the September 11th attacks. Howard had a choice to rebuild the company and support the families of his colleagues, or he could have shut everything down and walked away.
Howard is a fighter. He rebuilt the company. And the story at the end of the conversation will bring you to tears.
You can watch the full conversation with Howard Lutnick here:
Hope you all have a great day. I’ll talk to everyone tomorrow.
-Anthony Pompliano
Founder & CEO, Professional Capital Management
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