Analysis: Trump's refusal to reduce the fiscal deficit is in direct opposition to the goal, and the current fiscal path is inevitably leading to bankruptcy

On July 1st, the transaction information platform Kobeissi Letter pointed out that the irony regarding the situation between Elon Musk and Trump is that eliminating the US fiscal deficit could actually achieve all of President Trump's economic goals at one stroke. Firstly, eliminating deficit spending would reduce the amount of national debt issued, thereby lowering the bond yield. This would also lead to a decrease in the inflation rate, enabling the Fed to cut interest rates and stabilize the bond market. In fact, the bond market was the reason for the turnaround in the trade war in April when the 10-year Treasury yield surged to over 4.60%. To a certain extent, reducing deficit spending would allow Trump to exert more tariff pressure to narrow the trade deficit. Although the trade war is regarded as "short-term pain for long-term gain," the true application of this phrase lies in cutting deficit spending. With Musk's continuous public statements about the debt crisis, an increasing number of Americans are starting to pay attention to this issue. Since the implementation of stimulus measures during the 2020 pandemic, bankruptcy is the inevitable outcome on America's current fiscal path.