Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/p>\n
America\u2019s deficit crisis is dominating headlines today, but the country\u2019s most famous investor offered a solution to the problem nearly 15 years ago.<\/p>\n
In 2011, Warren Buffett told CNBC\u2019s Becky Quick (1) that the crisis could be resolved relatively quickly.<\/p>\n
Top Picks <\/p>\n
\u201cI could end the deficit in five minutes,\u201d he said. \u201cYou just pass a law that says that any time there\u2019s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for re-election. Yeah, yeah, now you\u2019ve got the incentives in the right place, right?\u201d<\/p>\n
But the President and lawmakers in Congress seem to have plenty of incentives to move in the other direction, and that could have long-term consequences on your personal finances. Here\u2019s why.<\/p>\n
Trump\u2019s borrowing spree <\/p>\n
During the 2024 election campaign, Donald Trump presented himself as a fiscal disciplinarian, according to MS Now (2). \u201cIn the near future, I want to do what has not been done in 24 years: balance the federal budget,\u201d he told Congress in 2025 (3).<\/p>\n
Fast forward to today, and the Trump administration\u2019s policies have actually broadened the deficit. Tax cuts have reduced revenue while the military budget has expanded. The administration has requested a defense budget increase to $1.5 trillion (4) \u2014 that\u2019s a 42% uptick compared to 2026\u2019s budget.<\/p>\n
The federal budget deficit is already on track to hit $1.9 trillion in fiscal 2026, which is 5.8% of the nation\u2019s GDP, according to the Congressional Budget Office (5). That\u2019s nearly double the GDP ratio Buffett said should make lawmakers ineligible for re-election.<\/p>\n
Every annual deficit adds another layer to a cumulative debt pile that is already at historical highs. As of March 2026, federal debt exceeded $39 trillion. This is larger than the annual GDP of over $31 trillion, according to NPR (6). This is the first time the national debt has crossed 100% of national GDP since the end of the Second World War.<\/p>\n
Buffett\u2019s solution could potentially mitigate this issue, but the implementation would require something nearly impossible: getting lawmakers to vote for a law that fires them, and to self-impose a ceiling they\u2019ve spent decades avoiding.<\/p>\n
Simply put, the math works, but the politics doesn\u2019t. And this could have long-term consequences on your finances.<\/p>\n
Read More: Here\u2019s the average income of Americans by age in 2026. Are you falling behind?<\/a><\/strong><\/p>\n Real consequences <\/p>\n The national debt may seem like an abstract problem, but it has real consequences for ordinary citizens and families. Studies cited by a recent Wall Street Journal (7) report suggest that per-person income would be roughly 6.7% larger if the national debt was reduced to 80% of GDP by 2050.<\/p>\n \u201cThe thing about the national debt is that it affects basically everything in our economic lives and then some,\u201d Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), told WSJ. \u201cBut we don\u2019t see it, we don\u2019t feel it, and many people don\u2019t realize it.\u201d<\/p>\n Inflation, higher borrowing costs and stagnant wages are all potential outcomes of the national debt on your personal finances, according to the U.S. Government Accountability Office (8).<\/p>\n Protect yourself <\/p>\n The government\u2019s spending and debt binge is beyond your control. But what you can do to protect yourself from the impact is to add some exposure to so-called \u2018hard\u2019 assets.<\/p>\n These are tangible assets that tend to retain their value better during times of debt crises, inflation and currency devaluation. Think gold and real estate.<\/p>\n To add some exposure to the precious metal, you could consider opening a gold IRA with the help of Goldco<\/a>. This structure helps you benefit from the safe haven features of gold while also maximizing tax benefits. The logic goes like this: unlike fiat currency, gold can\u2019t be printed at will. This means it tends to hold its value better during market volatility.<\/p>\n With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Even better, the company will match up to 10% of qualified purchases in free silver<\/a>.<\/p>\n If you\u2019re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today<\/a>. Just keep in mind that gold is typically best deployed as one part of a diverse portfolio.<\/p>\n As for real estate, you don\u2019t need six figures to buy a property to get started. You can also get into the market without committing to a 30-year mortgage, potentially tapping into a new passive income stream in the process.<\/p>\n Platforms like mogul offer fractional ownership in blue-chip rental properties<\/a>, which gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or 3 a.m. tenant calls.<\/p>\n Founded by former Goldman Sachs real estate investors, the mogul team handpicks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.<\/p>\n Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property.<\/p>\n Every investment is secured by real assets, not dependent on the platform\u2019s viability. Each property is held in a standalone Propco LLC, so investors own the property \u2014 not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.<\/p>\n Getting started is a quick and easy process. You can sign up for an account and then browse available properties<\/a>. Once you verify your information with their team, you can invest like a mogul in just a few clicks.<\/p>\n There\u2019s no way to predict when the national debt turns into an economic shock, but adding gold or real estate to your portfolio could allow you to absorb some of that shock and protect your wealth.<\/p>\n You May Also Like <\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n CNBC (1<\/a>); MS Now (2<\/a>); U.S. Embassy in Italy (3<\/a>); The White House (4<\/a>); Congressional Budget Office (5<\/a>); NPR (6<\/a>); The Wall Street Journal\/ YouTube (7<\/a>); U.S. Government Accountability Office (8<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. America\u2019s deficit…\n","protected":false},"author":2,"featured_media":514650,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[144326,79,67112,1400,356,179,18,204987,20366,19,17,137489,1361,617],"class_list":["post-514649","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-becky-quick","tag-business","tag-congressional-budget-office","tag-dave-ramsey","tag-donald-trump","tag-economy","tag-eire","tag-federal-budget-deficit","tag-goldman-sachs","tag-ie","tag-ireland","tag-members-of-congress","tag-real-estate","tag-warren-buffett"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116680544910447701","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/514649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=514649"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/514649\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/514650"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=514649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=514649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=514649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}