Treasury Secretary delivers startling message on U.S. economy

thestreet ^ | March 10, 2025 | Todd Campbell

[lasereye]

It may not seem so to some, but many Americans are struggling.

While the S&P 500 has delivered eye-popping returns over the past two years, workers have been increasingly pinched by inflation, and job losses are becoming increasingly common.

As a result, consumer confidence has plummeted, casting a big shadow over what could happen to the U.S. economy next.

Treasury Secretary Scott Bessent, a stock market veteran trained by legendary hedge fund manager Stanley Druckenmiller, has watched the economy's give-and-takes for decades.

Recently, he offered up thoughts on the U.S. economy's future that are likely to raise eyebrows.

Challenger, Gray, & Christmas's latest report shows that 172,000 Americans lost their jobs last month, the largest number for the month of February since 2009.

Recession worries have become more common following weak data and poor consumer sentiment.

“Could we be seeing that this economy that we inherited starting to roll a bit? Sure," said Scott Bessent in a CNBC interview. "And look, there’s going to be a natural adjustment as we move away from public spending to private spending."

Bessent believes this 'adjustment' is necessary following years of overspending that have made America addicted to friendly fiscal policy.

"The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period,” added Bessent.

The comments suggest that the Trump administration understands that cutting fat from the Federal budget, including via lay-offs that could further increase unemployment and pressure spending, won't be pretty short-term.

However, it also shows that Bessent and the team believe that a reset is crucial for America to succeed.

That reset is evident in the administration's already-announced moves to charge tariffs on imported goods from Canada, Mexico, and China.

[lasereye]

Stock market futures indicate a big drop at the open today.

[neverevergiveup]

Those job numbers likely reflect the firings of workers with government jobs, and this was necessary. I feel for anyone who loses their job, but I also feel for the millions of Americans who don’t have the guaranteed pensions etc. that government workers have and who are struggling and paying taxes to fund those federal worker pensions etc.

[griswold3]

‘The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period’
If only they would learn to live within their means. One could hope. Things will start to slide and then someone will scream ‘somebody do something’ and the dems will propose big government programs. And we’re rolling downhill like a snowball headed for hell.

[Jonty30]

Do the right thing and you’ll see the economy repair itself quickly. Argentina was worse off, but they’ve made leaps and bounds with Milei in charge.

[MeneMeneTekelUpharsin]

We will probably become Argentina before things get better. This mess was created over a 40 year period of Democrat criminal malfeasance. It can not be fixed in just four years. Well, it could, if they would start arresting thousands of Federal Employees involved and putting them in prison and then setting strict standards of behavior for EVERYBODY and cut welfare and virtually eliminate illegal immigration and ship the illegals back to where they came from. Put people BACK to work, by force if necessary. I know many don’t want to hear that, but it IS the solution.

[Larry Lucido]

How is this startling to anyone other than Tom Campbell? The rest of us knew this and we don’t even have blogs .

[nathanbedford]

However, it also shows that Bessent and the team believe that a reset is crucial for America to succeed.

I think it shows that Bessent and the team believe that a reset is crucial for America to survive.

Although I have need clear my dismay over Trump's policy concerning Ukraine, I have also been among the loudest voices here warning of a potential sovereign debt crisis if the so-called "bond vigilantes" lose confidence in our ability to control spending and debt.

I believe we are in a foot race that only Trump can win. His stated intention is to cut government spending, cut taxes, cut regulations, drill baby drill and with a combination of GDP growth producing higher taxes, the deficit can be tamed and confidence of our bondholders maintained.

We have about $10 trillion of debt to roll over within about 9 months and it would be a catastrophe if there were no bond buyers at the window. Equally, a double whammy is potentially in store. These bonds that have to be rolled over will be paid at a higher percentage of interest and any additional interest increase could put the refinance in jeopardy.

So it is not just jobs at stake, it is not just a question of America succeeding, is a question of survival.

[Psalm 73]

"Stock market futures indicate a big drop at the open today."

One of my coworkers checks his 401K and other stock assets daily. His mood swings up and down with the natural market oscillations.

Damn dude, just leave it alone and get on with your life (and your job).

[AndyJackson]

over a 40 year period of Democrat criminal malfeasance.

Actually the two biggest deepstate run up the deficit spend on daddy's credit card grifters were those two idiots Bush and Cheney. They are the one's who put this whole globalism, socialism, crony capitalism trifecta on steroids with DHS and the war on terror. The dems are the enemy, but our globalist deepstate RINO are the enemy in our own ranks. They are in Trump's tough but stupid category.

[existentially_kuffer]

There’s an old adage, “what’s not to like?” Buying opportunity or selling opportunity.

[Theoria]

The "bond vigilantes" haven't been around since the Clinton era, and that's part of the problem. They are a market component on keeping government spending in check.

We have had the luxury of abusing our dollar power, those chickens are coming home to roost. We've propped up our economy for decades by deficit spending, the 'growth' we've enjoyed has come at the expense of future taxes.

The gen x, y, z etc now will face the storms of ever improving automation, ai and other advancements that take edge off of the human workforce.

[Alberta's Child]

Although I have need clear my dismay over Trump's policy concerning Ukraine, I have also been among the loudest voices here warning of a potential sovereign debt crisis if the so-called "bond vigilantes" lose confidence in our ability to control spending and debt.

I believe these two statements of yours completely contradict each other. You can’t complain about Trump’s policy on Ukraine on one hand, then turn around and acknowledge that the U.S. government is dealing with a fiscal disaster.

A bankrupt nation like ours has no business bankrolling a massive welfare state in Eastern Europe. Trump’s policy on Ukraine is one of the most sensible foreign policy initiatives to come out of the Beltway in my lifetime.

[bert]

Holding opportunity

[period end of story]

Unleashing a tariff war at this time....

Hello inflation.

[Texas Fossil]

My local bank was bought out by another bank group (solid one), transferred last weekend. So I had to notify my stock broker of the change of routing and account number for fund transfer when needed.

I had them check my account balance, it actually was in pretty good shape.

I am not a trader, unless I see an individual stock that I think is particularly well run.

[quantim]

“This mess was created over a 40 year period of Democrat criminal malfeasance.”

And the cooperation and willingness of the GOPe/uniparty is important to be noted as well for putting us in this mess, it is our current battle for years to come. Let us hope that President Trump started an avalanche that cannot be stopped.

[ronnie raygun]

Test to see if the people really believe in Trump, these bastard rats and republicans over the years have drove us over the cliff. You only find out how bad when you have access to everything they have been doing and stealing for decades.

[Bobbyvotes]

Cutting unproductive government jobs is similar to squeezing puss out of infected wound. Surely the process is painful. But it speeds up recovery & healing.

[ClearCase_guy]

bfl

[RinaseaofDs]

$1T every 100 days.

The number is so large, they don’t understand it. It’s the meteor. There is still time to dodge it, but barely.