When countries like China focus on heavily investing, initially it works well because they invest in productive things and this grows their economy. However, later, they run out of that many productive things to invest in, in which case they are robbing their citizens of consumption and outcompeting other countries’ manufacturing, but not gaining much actual new productive benefits. This leads to debt.
Bilateral tariffs like Trump is doing don’t work. The U.S. has a huge deficit because it consumes more than it exports. A global tariff could work by making goods more expensive and incentivizing people to consume, now relatively cheaper, domestic products. Bilateral tariffs just mean Americans will import cheap goods from country C and D instead of the heavily tariffed countries A and B.
Getting foreigners to invest in the U.S. hurts the U.S.. The U.S. has plenty of capital to invest and doesn’t need more. Additional investment means driving up the dollar, making U.S. goods less competitive internationally, and hurting U.S. exports.
China has debt to support investment. The U.S. has debt to support consumption. The system is out of whack and needs adjustment.
DOGE was a massive failure. It was run by arrogant people who didn’t think they needed to learn and understand the subject matter. DOGE misdiagnosed the problem. Fraud and waste isn’t the driver of the debt, legitimate payments to people for Medicaid, Medicare, and Social Security, and military spending, are the drivers. DOGE also broke the law. The executive cannot legally stop spending that has been passed by Congress and signed by a president.
DOGE did enduring harm to research. We lost valuable people who are hard to get back. The standing of the United States and its power to influence people through the State Department, Voice of America, Radio Free Europe, and foreign aid have been deeply damaged.
“Don’t be fooled: The debt explosion is not driven by waste, fraud, or foreign aid. Nor is it the result of a lack of revenue. It’s the direct result of reckless promises to retirees, the cost of health care, and an unwillingness to pay the bills honestly. For most of American history, debt fell when wars ended and peace returned. Since 1980, we’ve managed the opposite: peace without prudence and prosperity without restraint.”
Some leaders and elected representatives of the Tea Party really believed in their supposed motivations about government spending, debt, and pork. But for the most part, the Tea Party was a big, damn lie. If all those Tea Partiers really cared about such things, they would be protesting and organizing just as hard against Trump right now.
“President Donald Trump returned to the White House with a promise to slash spending by trillions of dollars and balance the federal budget.
But, as the first fiscal year of his second term came to a close, progress had not been made on either of those goals.
Despite the high-profile efforts of Trump’s Department of Government Efficiency (DOGE), the 2025 federal fiscal year ended with the federal government having spent more money than it did in the previous fiscal year, the Congressional Budget Office (CBO) reported
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The CBO’s end-of-year report helpfully spells out which parts of the federal budget saw the biggest year-over-year spending increases. Overwhelmingly, and unsurprisingly, the biggest increases were for the so-called entitlement programs: Social Security, Medicare, and Medicaid. For those three programs, spending increased by a combined $245 billion.
Other big spending increases were recorded by the Pentagon ($38 billion) and the Department of Veterans Affairs ($41 billion), where the increase was driven by the rising cost of health care facilities. Interest payments on the national debt rose by $80 billion compared to the previous fiscal year’s totals.
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the CBO’s report serves to underline the same fiscal reality that plagued the DOGE project: Cutting silly government contracts and foreign aid might be a worthwhile effort, but that won’t make a dent in the budget deficit. Any serious effort at fiscal reform has to focus on the areas of the budget that are growing year over year—which, realistically, means looking at entitlement programs.
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There are plenty of reasons to be skeptical that anything will change in the next three years. For one, Trump’s track record after nearly five years as president does not suggest he cares very much about actually cutting spending. The coming years will also bring greater headwinds to any attempts at reducing the deficit. That’s due in part to the expected increases in entitlement spending, as well as the fiscal effects of the One Big Beautiful Bill Act, which extended and expanded the 2017 tax cuts in ways that will likely add to the deficit.”
Tea partiers give Trump a higher proportion of their support than do non-tea party Republicans, but Trump has always had a significant amount of support from both. The tea party as a movement motivated by debt and government spending was a myth. Someone truly angry about debt and spending does not support Trump.
Long term bond yields rose after the Fed cut. This is the bond market signaling to the Fed that the interest rate cut was not needed and that they have less confidence that the U.S. will remain solvent in the long term. We should watch and see if this signal maintains over the weeks to come.
Trump administration making it easier for wealthy people to cheat on taxes. One of the simplest ways to bring in more revenue and help the deficit is to take in the taxes people actually owe. This requires enforcement and effort, but the Trump administration isn’t willing to keep doing that.