Expand chart
Data: Factset: Chart: Lazaro Gamio/Axios

Warren Buffett's annual letter to shareholders is out, which is always most interesting when the Oracle of Omaha admits to past mistakes.

Why it matters: Buffett has a lesson, in his letter, for "those who regularly preach doom because of government budget deficits". He admits that he was one of those individuals himself, but he's not any more.

  • Buffett divides America's history into three 77-year periods. The last period happens to coincide with his investing career, which started in 1942 with $114.75 of savings. Buffett was fortunate to begin investing at such an auspicious time, which shortly predated a stunning wartime run-up in America's debt-to-GDP ratio. (In 1942 it was 48%; by 1946 it was 119%.)
  • America did well in its first century and a half. Then, over the course of Buffett's third 77-year period, we contrived to increase our national debt by about 40,000%. "Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency," writes Buffett. "To protect yourself, you might have eschewed stocks and opted instead to buy 3 1⁄4 ounces of gold with your $114.75."
  • Buffett, of course, became the world's richest man by investing that $114.75 extremely well. But even if you simply invested it in the broad stock market, it would have turned into $606,811. Had you invested it in gold, by contrast, your small lump of metal would now be worth just $4,200.

The bottom line: There is no evidence from 240 years of American history that the level of the national debt has ever really mattered. The U.S. prints its own currency, and can borrow as much as it likes, increasingly from domestic investors. Per Buffett, deficit hawks have preached doom for decades. They have never been proven correct.

Go deeper: National debt surpasses $22 trillion

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 12,009,301 — Total deaths: 548,799 — Total recoveries — 6,561,969Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 3,053,328 — Total deaths: 132,256 — Total recoveries: 953,420 — Total tested: 37,532,612Map.
  3. Public health: Houston mayor cancels Republican convention over coronavirus concerns Deaths are rising in hotspots — Déjà vu sets in as testing issues rise and PPE dwindles.
  4. Travel: United warns employees it may furlough 45% of U.S. workforce How the pandemic changed mobility habits, by state.
  5. Education: New York City schools will not fully reopen in fallHarvard and MIT sue Trump administration over rule barring foreign students from online classes.
  6. 🎧 Podcast: A misinformation "infodemic" is here.

Transcripts show George Floyd told police "I can't breathe" over 20 times

Photo: Gary Coronado/Los Angeles Times via Getty Images

Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

5 hours ago - Health

Fighting the coronavirus infodemic

Illustration: Sarah Grillo/Axios

An "infodemic" of misinformation and disinformation has helped cripple the response to the novel coronavirus.

Why it matters: High-powered social media accelerates the spread of lies and political polarization that motivates people to believe them. Unless the public health sphere can effectively counter misinformation, not even an effective vaccine may be enough to end the pandemic.