How Can the US Deal With its Budget Deficit, According to Peter Thiel

Billionaire Peter Thiel has suggested several concrete approaches for the US government to address its significant budget deficit.

In a recent appearance on the Joe Rogan Experience podcast, Thiel criticized the government for its excessive spending relative to its revenue. He highlighted the rising costs associated with interest payments on the national debt, which exceeds $35 trillion.

Thiel proposed three main strategies for managing the deficit: significantly raising taxes, drastically cutting spending, or continuing to borrow. He pointed out that in the first ten months of fiscal year 2024 alone, the national deficit has reached $1.516 trillion, with projections from the Congressional Budget Office indicating it could hit $2 trillion by the end of the fiscal year on September 30, 2024.

According to Thiel, reducing government spending is crucial to easing the debt burden, though he acknowledged that his suggested measures might face public resistance. These measures could include reducing government expenditures, raising the Social Security eligibility age, and implementing means testing to ensure that only those in genuine need receive Social Security benefits. Thiel noted that such cost-cutting strategies are politically challenging and likely to be unpopular.

He explained that means-testing Social Security would involve limiting benefits to those who truly need them, as Social Security represents the largest portion of government spending. For the period from October 2023 to August 2024, Social Security expenditures are projected to be $1.21 trillion, while interest payments on the national debt amount to $763 billion.