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Every four years, Americans fall in love with a fairy tale. A new president will change the federal deficit.
Republicans promise growth will outpace debt.
Democrats promised to tax the rich and fix it.
And the US Credit Clock keeps ticking like a Vegas slot machine that only pays out in red ink.
As of 2026, the United States owes about $38.5 billion and is rising by about $8 billion a day. Interest payments on debt officially exceed our annual defense budget.
We are no longer against politics. We argue about arithmetic.
Trump Plan: Growth + Prices + Tax Cuts
Let’s be fair: Trump’s economic philosophy has remained unchanged since he began campaigning.
Extend the tax deduction — no tax on tips, overtime, or Social Security.
Add tax revenue – now a political and legal battle.
Reduce bureaucracy – start with DOGE.
GDP is growing faster than spending – it only increased by 1.4% last quarter.
That worked well when the debt was $20 trillion low and interest rates were close to zero.
But today’s numbers are very different.
The Congressional Budget Office estimates current policy measures are keeping deficits close to $2 trillion a year and pushing the debt to nearly 120% of GDP within a decade.
Here is the translation. Even if the economy is growing at a crazy rate of GDP growth, the government is still spending far more money than it is collecting. Why does no one really understand the income and expenses in Washington, DC and that 85% of our income comes from the two buckets of personal income tax and income tax?
The Real Problem Is Not Taxes Or Taxes. Here’s a 60-second explainer.
It’s an interest. There are many and many interesting things. Interest on the debt alone is expected to exceed $1 trillion by 2026 and is now about 14% of government spending.
That means before we fund:
Self defense
social Security
Medicare
Infrastructure
Our veterans
It’s like playing credit card roulette and interest keeps piling up endlessly. No Republican or Democratic State of the Union message would garner such massive interest.
Politicians Don’t Like To Campaign With Statistics
TRUMP SETS STAGE FOR AMERICA’S RETURN AFTER BIDEN’S ECONOMY
Last financial year:
The government spent: $7.01 trillion
Government collected: $5.23 trillion
Annual deficit: $1.78 trillion
To clear the deficit overnight, you will need one of the following:
• Raise taxes by about 35% (think higher tax rates from 37% to 50%) and remember about half of Americans don’t pay federal taxes. • Cut benefits drastically, which really means one of the big three: Medicare, Social Security, or Defense. • Or grow the economy at war levels for ten years.
Does any of this ring true to you?
Why Trump Unfortunately Can’t Fix It (And Nobody Else Is)
Even Trump’s policies that increase tax revenue are expected to increase the deficit in the long run because tax cuts reduce revenue faster than tax revenues.
Here is an uncomfortable truth that we all need to face. America has policy problems, but more importantly, America has a problem with promises. No one wants to give up something, and if you are in debt you have to sacrifice something to get out of debt.
The Real State of the Union
Government debt cannot be eliminated.
It will be inflated, wiped out, monetized, or gradually offset by negative real interest rates because, mathematically speaking, the $38.5 trillion balance sheet cannot keep pace with increased policy volatility. The US is not happening. It is clean.
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Presidents can no longer control the deficit. Trump can change tax policy. He has already done it. Congress can try to change spending. But they rarely agree. But the truth is the truth. Changing this quickly is like answering Queen Elizabeth in the bathtub.
Unless America changes expectations or sacrifices are made on both sides of the aisle, the debt clock continues to tick regardless of whose name is on the Oval Office door. The debate in Washington is ideological. The danger for all of us is our position to wear the crown of world money.
