Can anyone stop America’s pending debt crisis? One side of the political aisle only cares about the ocean of red ink swallowing Washington when it is sitting in the opposition’s seat – and vice versa. Case in point, progressive lawmakers have clutched their pearls about President Donald Trump’s megabill, also known as the One Big Beautiful Bill (OBBB), feigning outrage over deficit-financed spending and tax cuts for wealthy Americans and working-class households. However, America’s fiscal troubles extend far beyond the reconciliation package, leaving the country wondering if the nation will ever abolish the astronomical $36 trillion IOU.
Trumponomics and the Debt Crisis
The oft-cited Congressional Budget Office’s assessment of the OBBB concluded that the legislation would add trillions to the deficit over the ten-year budget window. While the bill does reduce outlays by approximately $1.2 trillion, it is also projected to reduce revenues by about $3 trillion, assuming the growth stays below 2% and the estimated $2 trillion in tariff income does not materialize.
A comical component of the tariff-driven saga on Capitol Hill is that politicians espoused how levies would influence decision-making by businesses, consumers, and foreign markets. At the same time, they overlooked the fact that tax rates can also sway taxpayers’ actions. But that is a discussion for another day.
So, while the OBBB does move forward with spending cuts, they are minuscule. Consider this: The US government is projected to spend nearly $90 trillion over the next decade. Now that the tax-cut-and-spending bill has been signed into law, it is expected to lower this figure to below $89 trillion. It is hardly noticeable, and since the document is nearly 1,000 pages, of which hardly anyone read during the debate, there are likely provisions that will cancel out these reductions.
As Liberty Nation News has reported, two-thirds of federal outlays are dedicated to mandatory programs, whether Social Security or Medicare. Nobody is touching them. Critics contend that the OBBB takes a chainsaw to Medicaid, but the measures merely prevent illegal immigrants from receiving benefits and introduce work requirements. Suffice it to say, the debt crisis cannot be resolved without touching entitlements, which are expected to account for about 70% of the budget in the next ten years.
Whether the White House accepts this premise will only be seen when President Trump crafts next year’s budget. Until then, commentary from senior administration officials suggests they are laser-focused on growing the economy to escape the astronomical levels of debt.
GDP, Baby
Treasury Secretary Scott Bessent, likely the busiest Cabinet secretary in the current administration, recently purported on CNBC’s Squawk Box that he agreed with his predecessor, Janet Yellen, about concentrating on the debt-to-GDP ratio, which is already far above 100%. This is in addition to his year-long assertion that the deficit-to-GDP ratio needs to come down to 3% from the current 7%.
But without sharp spending cuts, how can the federal government lower the debt? The objective: to unleash enormous economic growth through deregulation, tax cuts, artificial intelligence, energy, and a plethora of other areas that can juice the gross domestic product. While lowering Americans’ tax obligations and removing red tape can stimulate growth prospects, it is unlikely to be enough to decrease debt obligations in a meaningful way.
Aside from taking a chainsaw to the budget, AI and robotics could be tickets to improving America’s fiscal health – and billionaire entrepreneur Elon Musk agrees. "I do believe that artificial intelligence and robotics technology will lead to economic surplus and massive growth within 10 years," Musk said in a June 28 post on the social media platform X. Last year, Musk claimed that robots could transform Tesla into a $25 trillion company. He also made a bold statement months later: "When AI takes over all production, money will become a footnote in history."
While estimates vary, the most conservative projections suggest AI will boost GDP growth by at least 1% over the next decade. Liberal forecasts anticipate the economic impact will total more than $4 trillion, or 15%, in GDP expansions. In other words, AI- and robotics-driven growth would be, to quote a certain president, “Yuge.”
And, of course, this would be, in part, fueled by the trillions of dollars in private investment pledged by US and foreign corporations since President Trump returned to the White House.
Tariff revenues have reached record levels, but this is a short-term panacea, according to administration officials. Bessent has likened the current efforts to a shrinking ice cube. Initially, tariff income would help offset any lost revenue from lower taxes. However, as more manufacturing is reshored, domestic income would surge, making tariff revenues superfluous.
Budget Surplus?
Spoiler alert: The US government will never register a budget surplus. Those days are long gone. Despite the Department of Government Efficiency’s best efforts, have they materialized into substantial budget cuts? The federal deficit is expected to total around $2 trillion (again!) this fiscal year. The annual budget is projected to reach $10 trillion by 2034. Ultimately, even if AI, robotics, and other emerging industries generate massive revenues in the coming years, politicians will likely spend the money on more entitlements, welfare, pet projects, wars, and other endeavors, creating a perpetual IOU machine.
At the very least, it is possible that the debt-to-GDP ratio could slip below 100%, which would be a monumental victory.
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