Why the big bill isn't so beautiful

What I worry about economically

As a 3-time Trump voter, I am happy that the president is taking some tentative steps to deporting illegal aliens. There may be around 30 million of them, which would require a deportation rate of over 20 thousand per day. We are currently at around 3 thousand per day, around 15% of what it would take to finish the job within 4 years.

The silly fights the White House has picked with Elon Musk and Senator Rand Paul obscure the real economic danger our country is in. Both Musk and Paul are right to warn us. The MAGA base supports living within our means, but then loses its mind to protect President Trump from all criticism, such as the ongoing approval of mRNA “vaccines”.

The graph below depicts three things in the American economy from 1966 through 2024:

• gross domestic product (GDP) in blue;

• money supply in green;

• federal debt in red.

Ideally, the blue curve should be significantly higher than either the green or red curves. That would tell us that our economy is efficient enough to produce a lot of output (blue) without requiring too much input (printing money in green, or borrowing money in red).

As you can see, federal debt surpassed GDP in the mid-2010s. The money supply surpassed GDP briefly during the pandemic and since then has decreased slightly.

We can measure the strength of the economy by using an omnibus measure of economic velocity, dividing the GDP by the sum of money supply plus federal debt, as shown below.

This number reached its high point in the first quarter of 1981. At that point, the Reagan tax cuts kicked in, without corresponding spending cuts (just like the big non-beautiful bill). Economic velocity decreased, but stabilized under the leadership of Newt Gingrich. Debt soared again during the great financial crisis and again during COVID. The money supply increased dramatically during the great financial crisis (justified because of the fear of a liquidity crunch) and again during COVID (when there was no liquidity crisis at all, merely pressure from the president).

Right now, economic velocity is dead in the water. We can thank our two political parties. One spends without regard to revenue adequacy. The other cuts taxes without controlling spending.

We learned the hard way from the Reagan presidency that you cannot grow your way out of debt. President Trump and Congress should enact the cuts that were recommended by DOGE (Department of Government Efficiency). We have been waiting for more than 40 years for the end of NPR. When are Republicans going to deliver?

If you support the big non-beautiful bill, from which countries, or from which of your children and grandchildren, are we supposed to borrow the money to cover current spending? Do you acknowledge the economic hopelessness expressed by some hard-working young people?

One year ago, I computed every American’s share of the federal debt to be over $103 thousand; but median household income stood at $80 thousand. This is not sustainable.

The big non-beautiful bill will add more than $2 trillion to the national debt each year. It should be rejected.