Trump’s big beautiful bill is unlikely to raise the opposition that Democrats hope it will. The tax cuts will go into effect immediately, but the Medicaid cuts will not go into effect until after the midterm elections. The tax cuts will not be very apparent because they just extend the cuts passed in Trump’s first term. The Democrats can talk about the Medicaid cuts, but the people affected will not feel them immediately.
The Medicaid cuts will make life difficult for the people affected, but the tax cuts will endanger the United States for years to come. The tax cuts will be almost invisible, but they will increase the budget deficit and the national debt significantly for years to come. Increasing the debt is like going on drugs. You know it is bad for you; you shouldn’t do it, but it feels so good. The US can probably tolerate more debt for a while, but at some point it will be a problem, perhaps a very serious problem, depending on what is going on in the country and the world at that time.
Paying huge interest on the debt, “debt service,” may make it impossible for the government to finance essential activities, forcing the long-delayed big cuts to Social Security, Medicare, Medicaid, and possibly national defense and infrastructure maintenance. The debt could induce a debt spiral. If people, Americans and foreigners, are unwilling to buy US bonds because they worry that the US might default on its debt, interest rates will go up, increasing the debt service payments even more. Plus, the dollar may lose its status as the main currency used in international financial transactions.
Dealing with the national debt requires national leaders to act like responsible grown-ups and take painful actions that will be good for the country in the long run. The big beautiful bill did not do that. It took the easy way out and moved the country further down the dangerous path it has been following for years. But increasing the debt is painless, until it isn’t, when interest rates skyrocket, bond and stock prices plummet, and the US economy may tank. The big, beautiful bill makes this catastrophe more likely, not now, but perhaps in a few years.
For now, we get a high from the unfunded tax cuts.