Warren Buffett voiced strong concerns about the U.S. government’s fiscal policies at Berkshire Hathaway’s annual meeting. He described the current deficit as “unsustainable.”
“Congress isn’t doing its job to reduce the fiscal deficit,” Buffett said. “We are doing something that is unsustainable.”
Buffett largely avoided political commentary, but he reluctantly addressed a question related to efforts to cut government spending.
As the iconic leader prepares to step down at the end of the year, with Greg Abel named as his successor, Buffett’s cautionary statements on government spending highlight ongoing debates around fiscal responsibility in Washington. Buffett explained that the current fiscal deficit, operating at roughly a 7% gap, is unsustainable for a prolonged period. “It has the aspect to it that gets uncontrollable at a certain point,” he noted.
When asked about the topic of DOGE (presumably referring to the cryptocurrency Dogecoin), Buffett didn’t delve into specifics but reiterated his overall message about the difficulties of reducing the deficit. “I wouldn’t want the job of trying to correct what’s going on in revenue and expenditures of the United States,” he said, emphasizing the challenge of narrowing the fiscal gap to a sustainable level. Buffett also pointed out the inefficacy of Congress in handling deficit reduction.
“I think it’s a job I don’t want, but it’s a job I think should be done, and Congress does not seem good at doing it,” he remarked.
Buffett’s deficit warning at meeting
During the event, Buffett mentioned that he would recommend Greg Abel, now a vice-chair at Berkshire Hathaway, as his successor.
In a reflection on past warnings, Buffett cited Federal Reserve Chair Jay Powell, noting, “Jay Powell is not only a great human being, he’s a very, very wise man, but he doesn’t control fiscal policy.”
Buffett’s comments emphasized potential investments in Europe, potentially spurring more financing in foreign currencies. “Obviously we wouldn’t want to be owning anything that we thought was in a currency that was really going to hell,” Buffett remarked. He suggested that significant European investments might lead to more transactions in local currencies.
Buffett criticized the hardline trade policies of the Trump administration without naming the former president directly. “Trade should not be a weapon,” he asserted, referencing sweeping import levies that had unsettled markets. He warned that tariffs could act as an act of war and lead to negative consequences.
Buffett urged the US to avoid antagonizing allies and partners, warning that protectionism could backfire. Regarding investment themes, Buffett reiterated his belief in the long-term value of stocks. He noted that stocks often outperform other asset classes, whereas real estate comes with complexities.
