{"id":138284,"date":"2025-07-03T14:04:00","date_gmt":"2025-07-03T18:04:00","guid":{"rendered":"http:\/\/kendallharmon.net\/?p=138284"},"modified":"2025-07-03T16:14:34","modified_gmt":"2025-07-03T20:14:34","slug":"economist-trumponomics-2-0-will-erode-the-foundations-of-americas-prosperity","status":"publish","type":"post","link":"https:\/\/kendallharmon.net\/?p=138284","title":{"rendered":"(Economist) Trumponomics 2.0 will erode the foundations of America\u2019s prosperity"},"content":{"rendered":"\n

…the\u00a0One Big Beautiful Bill act<\/a>\u00a0(BBB<\/small>) that passed the Senate on July 1st and the House on July 3rd looks more like traditional tax-cutting, spending-slashing Republicanism worthy of Paul Ryan or Mitt Romney than it does a\u00a0MAGA<\/small>\u00a0fantasy. Suddenly, business leaders are again willing to see Mr Trump as the populist from his first term: a man to be taken seriously but not literally.<\/p>\n\n\n\n

Unfortunately, the\u00a0BBB,\u00a0<\/small>which Mr Trump plans to sign into law on July 4th, is likely to cast a shadow over this sunny picture. It illustrates the long-term damage Mr Trump is doing to the foundations of America\u2019s economy.<\/p>\n\n\n\n

The bill\u2019s main effect is to extend the tax cuts from Mr Trump\u2019s first term which were due to expire. Republicans paint this as an extension of the status quo. Yet they, like the Democrats before them, ignore the fact that the status quo is unsustainable. Over the past 12 months America\u2019s budget deficit has been an astonishing 6.7% of\u00a0GDP<\/small>. If the bill passes, the deficit will remain around that level and the country\u2019s debt-to-gdp<\/small>\u00a0ratio will in about two years exceed the 106% reached after the second world war.\u00a0Revenue from tariffs will help, but not enough to stop the ratio rising\u2014meaning that the drift towards crisis will continue.<\/p>\n\n\n\n

To the extent the bill tightens the belt, it does so in the wrong places. As life expectancies rise and the population ages, America should trim handouts to the old, for example by raising the retirement age. Instead, pensioners are getting a tax break and Republicans are cutting Medicaid, health insurance for the hard-up. Some sensible measures include reducing the ability of states to game the system for more federal cash. Yet according to official projections, the overall effect will be to add nearly 12m to the number of Americans without health insurance. That is a scandalous number for the world\u2019s richest big country. Many of those who lose coverage will fall foul of new requirements that recipients must work. Such rules have in the past created an obstacle course of paperwork for claimants while failing to boost employment.<\/p>\n\n\n\n

Read it all<\/a>.<\/p>

The panic about tariffs has given way to cautious optimism. But Trumponomics 2.0 will erode the foundations of America\u2019s prosperity https:\/\/t.co\/d7Z1uq4Eca<\/a> pic.twitter.com\/raYf0JGOOv<\/a><\/p>— The Economist (@TheEconomist) July 3, 2025<\/a><\/blockquote>