Warren Buffett claimed he could end America’s deficit crisis ‘in five minutes’ — but would his solution actually work?
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America’s deficit crisis continues to be in the headlines, but the country’s most famous investor offered a solution to the problem nearly 15 years ago.
In 2011, Warren Buffett told CNBC’s Becky Quick that the crisis could be resolved relatively quickly (1).
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“I could end the deficit in five minutes,” he said. “You just pass a law that says that any time there’s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for reelection. Yeah, yeah, now you’ve got the incentives in the right place, right?”
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’s why.
Trump’s borrowing spree
During the 2024 election campaign, Donald Trump presented himself as a fiscal disciplinarian, according to MS Now (2).
“In the near future, I want to do what has not been done in 24 years: balance the federal budget,” he told Congress in 2025 (3).
Fast-forward to today, and the Trump administration’s 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 in fiscal 2027 (4) — that’s a 42% uptick compared to 2026’s budget.
The federal budget deficit is currently on track to hit $1.9 trillion in fiscal 2026, which is 5.8% of the nation’s GDP, according to the Congressional Budget Office (5). That’s nearly double the GDP ratio Buffett said should make lawmakers ineligible for reelection.
Every annual deficit adds another layer to a cumulative debt pile that’s already at historical highs. The U.S. national debt just surpassed $40 trillion (6), which is larger than the annual GDP of over $31 trillion, according to NPR (7). This is the first time the national debt has crossed 100% of national GDP since the end of World War II.
“We’re operating at a fiscal deficit now that is unsustainable over a very long period of time,” Buffett said during Berkshire Hathaway’s 2025 annual shareholder meeting (8) We don’t know whether that means two years or 20 years, because there’s never been a country like the United States.
“But you know, this is something that can’t go on forever, and it has the aspect to it that it gets uncontrollable at a certain point.”
Buffett’s solution could potentially mitigate this issue, but the implementation would require something that’s nearly impossible: getting lawmakers to vote for a law that fires them, and to self-impose a ceiling they’ve spent decades avoiding.
Simply put, the math works, but the politics don’t. And this could have long-term consequences on your finances.
Real consequences
The national debt may seem like an abstract problem, but it has real consequences for ordinary citizens and families. Studies cited recently by the Wall Street Journal (WSJ) suggest that per-person income would be roughly 6.7% larger if the national debt was reduced to 80% of GDP by 2050 (9).
“The thing about the national debt is that it affects basically everything in our economic lives and then some,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), told WSJ. “But we don’t see it, we don’t feel it, and many people don’t realize it.”
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 (10).
Protect yourself
The government’s spending and debt binge is beyond your control. But what you can do to protect yourself from the impact is think about adding exposure to so-called hard assets.
While nobody knows exactly how today’s government debt will affect inflation, interest rates or the dollar over the long run, diversification can help reduce the risk of having your financial future depend too heavily on any one asset or economic outcome.
For instance, there are some tangible assets, such as gold and real estate, that tend to retain their value better during times of debt crises, inflation and currency devaluation.
Opening a gold IRA
Gold has served as a store of value for thousands of years. Unlike fiat currency, governments can’t simply print more of it, and its value isn’t directly tied to the financial health of any one country or economy.
That can make it an appealing diversification tool when concerns about inflation, currency depreciation or mounting government debt start weighing on investors, who often flock to it during periods of economic stress or geopolitical uncertainty — pushing prices higher.
In fact, gold prices have more than doubled over the past five years, hitting multiple record highs along the way (11).
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold. Plus, if you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping and free storage for up to five years.
What’s more, when you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals for free.
The case for real estate
As fiscal debt continues to climb, real estate isn’t immune to economic shocks, but it can offer something stocks and bonds don’t always provide — a tangible asset with the potential to generate rental income and appreciate over time. That’s because in an inflationary environment, rents and property values may also rise, potentially helping real estate maintain its purchasing power.
“I had a way of buying a couple hundred thousand single-family homes and had a way of managing— the management is enormous— is really the problem because they’re one by one. They’re not like apartment houses. So— but I would load up on them,” Warren Buffett told CNBC in 2012 (12).
But you don’t 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.
Platforms like mogul offer fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or late-night tenant calls.
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.
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% and 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
Diversify your real estate portfolio
Investors with larger portfolios may also want to consider multifamily housing. In a report prepared by JPMorgan Chase, Al Brooks — the firm’s vice chair of Commercial Banking — said, “I think multifamily housing is absolutely where you want to be as an investor (13).”
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.
With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
There’s 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.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see oureditorial ethics and guidelines.
CNBC (1), (12); MS Now (2); U.S. Embassy & Consulates in Italy (3); White House (4); Congressional Budget Office (5); Treasury.gov (6); NPR (7); @CNBCtelevision (8); @wsj (9); U.S. Government Accountability Office (10); Gold Price (11); JPMorgan Chase (13)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.