Trump’s Economic Promises vs. the National Debt: A Budget Tug-of-War

Donald Trump has big plans for the U. S. economy, including tax cuts and other initiatives. But there’s a big problem: the national debt is huge, and it’s getting more expensive to pay it back. High interest rates and the cost of servicing the debt are making it tough for Trump to deliver on his promises. The debt is now around $36 trillion, and the cost of repaying it is going up fast. This is a challenge for Trump because it leaves less room in the federal budget for other things, like tax cuts. Plus, higher interest rates make it pricier for many Americans to buy homes or cars. Experts warn that the high cost of servicing the debt is crowding out spending on important things like infrastructure and education. About one in five dollars spent by the government goes to paying back borrowed money, instead of investing in future growth. Trump’s team says he can make the numbers work, but others worry that his tax cut plans could make the debt even bigger and push up interest rates even more. Democrats and many economists think Trump’s tax cuts mainly help the wealthy, which hurts the government’s ability to fund programs for the middle class and poor. The cost of servicing the debt is expected to reach over $1 trillion next year, which is more than what’s projected for defense spending. High interest rates are the main reason for this increase. Trump and his team are looking for ways to cut government spending to manage the debt and bring down interest rates. Some ideas include refusing to spend some of the money approved by Congress, which could face legal challenges. Others suggest repealing parts of Biden’s Inflation Reduction Act or adding work requirements to Medicaid. The last time the White House faced high debt service costs was during Bill Clinton’s presidency. Back then, higher borrowing rates pushed Clinton and Congress to agree on deficit reduction, leading to a budget surplus starting in 1998.