The Congressional Budget Office (CBO) says that the government will have to take on an extra $3.3 trillion in deficits if the White House’s Big Beautiful Bill passes.
In a new report, the non-partisan budget watchdog says that the bill would add $3.9 trillion to the national debt, stemming from roughly $4.5 trillion in net tax cuts and nearly $300 billion in spending increases, partially offset by almost $1.5 trillion in spending cuts.
The CBO also estimates that the bill will increase debt interest costs by nearly $700 billion.
“Even these numbers understate the potential costs of the bill, since the legislation relies on a number of arbitrary expirations. Borrowing could rise by another $1 trillion – to $5 trillion or more – if temporary provisions were made permanent.
The Senate should reject this bill and work toward a fiscally responsible alternative that reduces rather than explodes our high and rising debt.”
Senate GOP leaders are targeting around July 4 to complete the bill’s passage, but progress is uncertain due to internal resistance and looming deadlines.
Earlier this month, billionaire Paul Tudor Jones said that the US government is in a debt trap, and will need to run negative real rates – or set interest rates lower than the rate of inflation, in order to devalue its debt.
Jones says that the “playbook is clear” as far as what the government is going to need to do, giving an edge to investors looking to position themselves.
Besides stocks, he mentions Bitcoin (BTC) and gold as portfolio staples moving forward.
“We’re going to have negative real rates and that’s why you have to think about what is facing our policy makers in this debt trap as you construct your portfolio. So, what would an ideal portfolio be in something like that? Well, what has worked so far? What has worked so far has been some combination of stocks – which won’t do great, which would do terribly if they called us out on the bond market…
But it would be some combination of probably volatility-adjusted Bitcoin, gold, stocks. That’s probably your best portfolio to fight inflation.”
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