Key Points – President Trump’s “Big Beautiful Bill,” a major tax and spending package that recently passed the House, faces dire warnings about its potential to massively increase the US national debt and trigger an economic crisis.
-Several Republican Senators, including Rick Scott and Rand Paul, along with financial analysts like Nicholas Creel and Peter Schiff, express alarm that the bill’s projected multi-trillion dollar cost is fiscally unsustainable.
-Concerns include fueling bond market jitters, spiking borrowing rates, and potentially ushering in a dollar or sovereign debt crisis, on top of a recent Moody’s credit downgrade, even as the bill’s Senate passage remains uncertain.
Trump Should Think Twice About the Big, Beautiful Bill
The “Big, Beautiful Bill,” the Trump Administration’s major taxation and spending package, passed the House of Representatives before Memorial Day, after several weeks of often bitter wrangling among different factions in the House GOP. The 1,116-page bill now moves to the Senate, where it is not expected to pass in the same form, making it a challenge to pass that version through the House.
But even before that process begins, there are concerns that the bill, if passed, will make America’s debt problem worse than it already is, and possibly even lead to a crash of the economy.
Donald Trump Creating “A Debt Bomb”?
The Hill reported on Tuesday about worries from Republicans that the bill could lead to out-of-control debt. The bill includes significant tax cuts, and while it cuts spending as well, it does not do so in a way that is proportional, with the package expected to add to the debt long-term.
The bill’s fiscal impact, per the report, is “becoming a significant political concern among Republican lawmakers who have made little progress toward offsetting the $3 trillion projected cost of the legislation.”
The Hill quotes one Republican senator as fearing that the bill is “fueling jitters in the bond market.”
“I think we’re having trouble selling our long bonds already,” Sen. Rick Scott (R-FL) told The Hill. “I want to get a deal done; I support the president’s agenda. I support the border, I support the military, I support extending the Trump tax cuts — but we have to live in reality. But we got to live in reality here: We got a fiscal crisis.”
Another senator, Sen. Rand Paul (R-KY), also has warned colleagues that Republicans will “wholly own” the deficit problem if the bill passes on a party-line vote. Paul vowed to vote against the bill, if it comes up as is.
“I think the problem for conservatives is they lose their high moral ground. These will be their deficits,” Sen. Paul said, per The Hill. “These will be GOP spending bills, GOP deficits, and there is no change in the direction of the country.
Another senator, Sen. Thom Tillis (R-NC), told The Hill that he would like to see more deficit reduction in the bill.
Rep. Thomas Massie (R-KY), one of just two House Republicans who voted against the bill, called it “a debt bomb ticking.”
How Could a Crash Happen?
How could the bill lead to an economic crash? Nicholas Creel, Assistant Professor of Business Law, Georgia College and State University, explored that question this week in a Newsweek op-ed.
Creel believes that “the markets are sending us a message,” with the bond market’s reaction to the bill passing the House.
“The softening demand for American debt is spiking borrowing rates and sending stocks into a tailspin. This isn’t something that we should cast off as just another bad day on Wall Street—it’s a glaring red flag about the sustainability of America’s fiscal trajectory,” Creel said in the op-ed.
He went on to blame the passage of the bill for “mounting anxiety over the federal deficit and the impending fiscal fiasco,” pointing to the recent Moody’s debt downgrade.
“The market convulsions we’re witnessing now reflect the fundamental reality that the world is growing increasingly skeptical about America’s capacity to manage its debt,” Creel writes. “The bond vigilantes have awakened, and they’re demanding answers that Republican fiscal fantasies simply cannot provide.”
Another Warning
Also issuing a similar warning was “Economist and gold advocate” Peter Schiff.
“The Big, Beautiful Bill not only won’t make America Great Again, but it continues the destructive fiscal policies that contributed to our fall from greatness. Ironically, it may be the straw that breaks the camel’s back, ushering in a long overdue dollar & sovereign debt crisis,” Schiff said this week, going on to call the bill “a total fraud and a betrayal.”
About the Author:
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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