Thanks for the prompt to check out that thread
@Cosmacelf - In addition to the list of 936 startups valued at over $1B that Elon referred to when he said many will not make it when the next recession comes, these charts were also very interesting and sparked another response from Elon. The combination of the two really spells a hard bump against the guardrail if spending isn't reigned in quickly.
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It has been estimated that Middle East military spending has been approximately $2T/year - and on top of that the Pentagon had another $21 Trillion that could not be traced...........? The Federal Budget for 2020 was only $4.79 Trillion. We have buried our soldiers, our budget, and our flexibility as a nation in the Middle East since my boots were on the ground in Desert Storm. China is running circles around us in large part by not being a part of any of this. And now we are reaching a point in time where the Working Age Population -those tasked with paying for all this - is declining. The guard rail is coming at us fast. Elon gets this. Without addressing these issues as the highest priorities, decreasing the working population on the 2nd graph above puts us on the 'S' Curve for the first graph above it. And herein lies another great tragedy of the dismantling of the original Green New Deal by those looking out for all of us in DC. In its original form, the portions of the Green New Deal that moved us rapidly away from fossil fuels and thus significantly reduced our $2 Trillion/year Middle East spending habit was estimated to cost.....(wait for it)......about $2 Trillion. Hmmm, imagine that. By spending a single year's Middle East military budget amount we could rapidly accelerate ourselves away from a $2 Trillion/year expense..........and thus eventually have the ability to create nearly a $2 Trillion/year savings - every single year going forward. And all of those funds could have been used to further advance all the remaining portions of the The Green New Deal (social and infrastructure spending), with monies remaining to continue accelerating our transition towards a nation-wide distributed grid fed almost exclusively with renewable energy, accelerating sustainable transportation powered from the renewable energy on that grid, and accelerating a more sustainable Planet as a result. Therein is the greatest irony - that a single year's budget was literally the seed monies necessary to pay all of this forward were priorities just a little bit different. But here we are, and Elon is right............"This chart is a big deal". And the backstory is horrific IMO.
The slow and painful death and transformation of the Green New Deal into the Infrastructure Bill and BBB didn't only manage to protect the existing Paradigm while significantly slowing our transition to renewable energy. It created a path without any near-term off-ramp that offered us a savings commensurate with expenditures. Thus running us further up the 'S' curve on the first chart above. But hey, at least the current grid operators can be the future grid operators. And maybe we can keep producing a lot of hybrid ICE vehicles and create a market for hydrogen made from fracked natural gas in the process. Ugggghhhh. So when Elon stated in his WSJ interview that "Honestly, it might be better if the bill doesn't get passed. The federal budget deficit is insane", my wife and I breathed a deep sigh of relief - not just because we didn't agree with the Union-made clauses, but for all the reasons above. Personally I will be following any and all recession comments Elon makes very closely. He is willing to say what is uncomfortable to hear. That has been a gift to us all.
It was fascinating to stand on the Three Gorges Dam in China as they were completing its construction, and to tour all across that country a decade ago and see solar farms popping up everywhere - in fields, over ponds and lakes and canals, and on so many buildings at the tipping point in time when it just barely became economically viable to do so. Serendipitously, we were there observing China's equivalent of a Green New Deal unfolding before our eyes a decade ago - without a $2 Trillion/year expense in the Middle East holding them back. And the savings those projects created were poured right back into more projects - just as the original Green New Deal could have done here. Metaphorically - China was Tesla, and the US is Mary Barra and GM still bumbling for a plan and a path. We could/should have been on the same trajectory long before China, when Carter leaned-in and put solar panels on the White House. But then Reagan took them off, and a decade later the Navy ship I served on was anchored in a floating mine field in the northern part of the Persian Gulf watching Iraqi oil rigs burn instead.
Elon, Tesla, and TSLA mean much more to me than I can express.
lol.
www.barrons.com
