Giving stupid, reckless tax cuts to billionaires has economic consequences....none of them good.
The Big Beautiful Bill increases the national debt by at least $2.3 trillion over the next 10 years, according to the CBO. As the risk of lending money to the U.S. government continues to rise, interest rates will keep going up, and that will have a very negative impact on the U.S. bond market and the economy.
The bond market fluctuated wildly in April because of Trump's tariffs....which is why Trump ultimately cancelled the 145% China tariffs and suspended many other tariffs. However, once this bill is passed, Trump and the Republicans will not be able to do anything to quickly stop the damage they have inflicted to the U.S. economy.
From the Washington Post --
Wall Street bankers and executives are privately warning the Trump administration that the tax bill moving through Congress could stoke investor anxiety about rising deficits, push up U.S. borrowing costs and damage the broader economy, according to more than a dozen people familiar with the matter.
House Republicans this month approved a measure projected to add $2.3 trillion to the national debt over the next decade, primarily by extending tax cuts from 2017 — and it would add more than $5 trillion in debt including interest costs and likely future extensions, according to the nonpartisan Committee for a Responsible Federal Budget. That legislation, which would also beef up immigration enforcement and defense spending, is President Donald Trump’s top legislative priority. The Senate is due to take it up soon.
But recently, a growing number of figures from the financial world have expressed private concerns that such an expensive bill could rattle the U.S. bond market, a cornerstone of the global financial system and the national economy. Most have been reluctant to raise their worries publicly, instead passing them along in smaller meetings or through trusted confidants, said the people familiar with the warnings, most of who spoke on the condition of anonymity to discuss sensitive talks.
White House officials have pushed back against these criticisms over the past week, arguing that fears about the bond market are overstated and that warnings about the deficit impact of Trump’s first tax bill were also exaggerated.
The federal government borrows money — issued as Treasury bonds — to fund the gap between what it spends and what it brings in through taxes and other revenue. The almost $30 trillion market for U.S. debt influences the interest rates for other lending, including mortgages and auto loans, as well as for debt issued by private companies. Experts warn that too much government borrowing could send already-elevated interest rates soaring, as investors demand higher yields to cover the increased risks that the United States might eventually default. Even before it becomes law, the tax bill has helped to fuel a spike in Treasury yields, with the 30-year bond recently surging past 5 percent — an important psychological threshold — before receding.
In April, the bond market fluctuated wildly because of the chaos caused by Trump’s massive proposed tariffs on U.S. trading partners, but stabilized as the president backed off those proposals. Now many economists and Wall Street analysts fear a potential reprisal of that turbulence if global investors prove unwilling to snap up massive amounts of U.S. debt at current prices.
