Here's a more detailed breakdown:

 

Deficits lead to debt:

When the government spends more than it collects in revenue, it creates a deficit. To cover these deficits, the government borrows money by selling Treasury bonds, bills, and other securities. 

 

Debt accumulation:

Each year's deficit is added to the previous year's debt, causing the national debt to grow over time. 

 

Who holds the debt:

The US national debt is held by various entities, including domestic and foreign investors, the Federal Reserve, and even the government itself. 

 

Interest payments:

The government must pay interest on the outstanding debt, adding to its spending each year. 

 

Debt-to-GDP ratio:

The national debt is often expressed as a percentage of the Gross Domestic Product (GDP), which is a measure of the size of the economy. 

 

BUDGET DEFICIT

The US federal budget deficit is the difference between what the government spends and what it takes in through taxes and other revenues. In fiscal year 2024, the government spent $1.8 trillion more than it collected, resulting in a deficit of $1.8 trillion. This deficit translates to 6.4% of the Gross Domestic Product (GDP). 

 

Here's a more detailed explanation:

 

• What it means: When the government spends more than it earns, it needs to borrow money to cover the difference. This borrowing adds to the national debt. 

   

• How it's calculated: The deficit is calculated by subtracting total government revenues (from taxes, fees, etc.) from total government spending (on programs, salaries, interest on debt, etc.). 

   

  Key factors influencing the deficit: 

• Spending: Increases in spending on programs like Social Security, Medicare, and Medicaid, as well as net interest payments on the national debt, can contribute to a higher deficit. 

   

• Revenues: Changes in tax collections, such as corporate income taxes or individual income taxes, can impact the government's revenue. 

   

• Economic conditions: Economic downturns can lead to lower tax revenues and increased government spending on social safety nets, contributing to a larger deficit. 

   

• Impact of the deficit: National debt: Deficits increase the national debt, which is the total amount of money the government owes to its creditors. 

   

• Interest payments: The government must pay interest on its debt, adding to its expenses. 

   

• Economic growth: Large deficits can lead to higher interest rates and potentially slow economic growth. 

   

• Historical trends: The federal budget deficit has fluctuated throughout history, with periods of surpluses and deficits. The deficit has been particularly high in times of economic recession or war. 

 

What his administration promised doesn't matter because 2025 is riddled with broken campaign promises. What matters are the facts. The numbers above are indisputable, but that's not the end of the story. Mr. Trump's "big beautiful bill" comes with an astounding $4 trillion price tag on our backs, in spite of the promises of being fiscally conservative in addition to the assertion of their intent to save taxpayer money. Not only do their numbers not align themselves with factual information they just don't add up with reality.

 

Regarding the "Trump Bill" (One Big Beautiful Bill Act) recently passed by the House of Representatives:

• Impact on Deficit: The Congressional Budget Office (CBO) estimates that the tax provisions in the bill will increase the federal deficit by approximately $3.8 trillion over the next decade (2025-2034). Other estimates place the total cost of the bill, including both tax cuts and potential spending changes, at over $5 trillion over the next decade.

• Projected Spending Cuts: While the tax cuts are expected to increase the deficit, the bill also includes nearly $1 trillion in proposed cuts to federal support for programs like Medicaid and food stamps over the same period.

• Long-Term Debt Impact: Some analyses project that permanently extending the 2017 tax cuts, which are largely contained within the House bill, could add significantly to the national debt, potentially pushing it above 200% of GDP by 2054. 

   

Regarding the 2017 Tax Cuts and Jobs Act (TCJA):

• Cost of Extensions: Extending the expiring parts of the 2017 TCJA could cost about $4 trillion over the next decade, with the majority of that cost coming from individual and estate tax provisions.

• Skew to the Rich: Critics argued that the 2017 TCJA provided larger benefits to wealthier households.

• Impact on Federal Revenue: The TCJA resulted in decreased federal revenues and contributed to the national debt. 

   

Important Considerations:

• Different economic models and assumptions can lead to varied cost estimates.

• "Dynamic" scoring, which considers the impact on economic growth, differs from "conventional" scoring.

• Long-term projections carry more uncertainty than short-term ones. 

   

In summary, both the recent House bill and potential extensions of the 2017 tax cuts are expected to increase the national debt, with higher-income households receiving a larger share of the benefits.