Gonna Big Time Screw Over future generations for the Vanity of One Man and 901 other Billionaires.
According to Forbes’ 2025 Billionaires List, the United States has the most billionaires in the world, with 902.
Dear Elmer Fudd, here’s info on the New Beautiful Tax Bill, here’s a simple explanation. Congress is gonna Lower Your Taxes and put more Money in your pockets to offset the Big Increase in Grocery Costs, and Costs of other items going up in costs due solely to Trump’s Tariffs. You’ll buy more and it’ll look great on Wall Street, but it’s an artificial deceptive reverse trade. So, you get the deception? It’s called Robbing Peter to pay Paul. And future generations are gonna be Raped because there is no way in hell they’ll ever dig themselves out of this overload of National Debt caused by Trump’s Big Beautiful Tax Bill which is only Beautiful to Billionaires. He doesn’t care because he won’t be here to pay for your future Debt as he pays little tax anyway. And by having more money, you’ll buy more and we’ll have an artificial increase in the GDP because of the Big Beautiful Tax Bill. Just read, and maybe, Elmer Fudd, you’ll get it.
But do you care at all about all the Federal Job Cuts? All the Cuts made by dropping fuzzy math DEI? All cuts made on Federal Programs? All of it done to make way for Trump’s Big Beautiful Tax Bill for Billionaires? Giving them $600 Billion to One Trillion Dollars. Do you care Elmer Fudd?
I don’t care what you say about my big beautiful President Donald Trump, he’s fighting for me and he loves me and he gets me and I attended most nearly all his rallies cause they gave us free cotton candy.
Analysis of the Proposed Tax Bill and the US Credit Rating Downgrade
1. Executive Summary:
The United States Congress is currently considering a new tax bill, a significant piece of legislation that aims to reshape the nation’s fiscal landscape. This bill, emerging from the House Ways & Means Committee, proposes to extend many of the tax cuts enacted in 2017 under the Tax Cuts and Jobs Act (TCJA) and introduce new tax provisions. Simultaneously, the nation’s economic standing has come under scrutiny with Moody’s Investors Service recently downgrading the United States’ credit rating from its long-held Aaa to Aa1. This action reflects concerns over the country’s increasing debt burden and persistent fiscal deficits. The proposed tax bill, with its projected costs and potential impact on the national debt, is intricately linked to the factors that prompted the credit rating downgrade. Understanding the details of the tax bill, the reasons behind the downgrade, and the potential interplay between these two developments is crucial for assessing the future economic trajectory of the United States. This report delves into an in-depth analysis of the key aspects of the proposed tax legislation, the significance of the credit rating downgrade, and their potential combined impact on the American economy.
2. The Proposed New Tax Bill: An In-Depth Analysis:
2.1 Current Status and Key Provisions:
The legislative process for the new tax bill gained momentum in May 2025, with the House Ways & Means Committee completing its markup of the proposed legislation on May 14th. The House of Representatives anticipated holding a vote on the bill the following week. This legislative package has been notably referred to as the “One Big Beautiful Bill Act”. At its core, the proposed bill seeks to extend the existing income tax cuts that were initially approved during President Trump’s first term in 2017 through the Tax Cuts and Jobs Act (TCJA), while also incorporating new tax measures.
Several key provisions are central to this sprawling package. A primary objective is to make permanent the majority of the individual income and estate tax provisions that were part of the 2017 TCJA. Another significant aspect involves modifications to the state and local tax (SALT) deduction. The current cap of $10,000 is proposed to be tripled to $30,000 for joint filers with incomes up to $400,000 annually. However, this proposed increase has not satisfied some Republican lawmakers, particularly those representing high-tax states like New York, who are advocating for even more substantial increases. Representatives from these states have suggested figures such as a $62,000 deduction for single filers and $124,000 for joint filers. Discussions around a compromise have also emerged, with GOP leaders mentioning a potential cap of $40,000 for individuals and $80,000 for joint filers.
The bill also proposes to increase the standard deduction for joint filers to $32,000. Additionally, there is a temporary boost to the child tax credit being considered, raising it to $2,500. Several new tax breaks are also included, such as the elimination of taxes on tips, overtime pay, and interest on some auto loans, specifically those for vehicles with final assembly in the United States.
Beyond individual tax provisions, the package includes substantial spending proposals. Approximately $350 billion is earmarked for President Trump’s deportation agenda and to bolster the Pentagon’s budget. To partially offset the revenue losses from these tax cuts and spending increases, the bill proposes rolling back green energy tax credits that were approved as part of President Biden’s Inflation Reduction Act. Furthermore, the package seeks to achieve cost savings by slashing over $1 trillion from healthcare and food assistance programs over the next decade, partly through the implementation of work requirements for able-bodied adults. The timing of these work requirements is a point of contention, with some conservative members pushing for their immediate implementation rather than the proposed start date of January 1, 2029.
In the realm of business taxation, the bill aims to permanently extend the lower tax rates on multinational corporations, specifically the Global Intangible Low-Taxed Income (GILTI), Foreign-Derived Intangible Income (FDII), and Base Erosion and Anti-Abuse Tax (BEAT) provisions. It also proposes to allow domestic research and development (R&D) expensing and bonus depreciation through the year 2029. Certain sectors, such as large private universities, could see increased taxes on their endowments. The bill also includes an extension of the excise tax on executive compensation for all employees earning $1 million or more and an increase in the Unrelated Business Income Tax (UBIT) for charitable organizations. There have also been discussions about potential changes to the federal government’s pension program as a means to help finance the proposed tax cuts.
The legislative strategy employed for this bill is budget reconciliation, which allows for passage with a simple majority in both the Senate and the House, bypassing the need for a 60-vote threshold in the Senate. The stated objective among those working on the legislation was to have it signed into law by July 4th. However, the bill has encountered significant opposition. Conservative Republicans, particularly members of the Freedom Caucus, have voiced concerns that the proposed spending cuts are not deep enough and have threatened to block the bill. Simultaneously, GOP lawmakers from high-tax states remain dissatisfied with the proposed SALT deduction cap. These internal divisions were evident when the bill failed to advance through the House Budget Committee. The complexity of extending existing tax cuts, introducing new measures, and offsetting these with spending cuts across various sectors indicates a significant shift in fiscal policy and government priorities. The disagreements within the Republican party underscore the challenges in achieving a consensus on such a comprehensive piece of legislation. The use of budget reconciliation highlights the intent to expedite passage, but the internal opposition suggests that the bill may face further hurdles and potential modifications.
2.2 Estimated Cost and Budgetary Impact:
Estimating the precise cost of the proposed tax bill over the next ten years involves analyzing various provisions and their projected impact on federal revenue. According to the House Ways & Means Committee’s initial proposals, the legislation aims to cut nearly $6 trillion in taxes while also increasing taxes by approximately $2 trillion, resulting in a net spending of around $3.8 trillion during the ten-year budget window. Should all the proposed changes in the bill become permanent, the net cost is projected to rise to roughly $5.3 trillion over the same period, and this figure does not include additional interest costs that may accrue.
The Tax Foundation has also provided estimates, indicating that simply extending the expiring provisions of the 2017 TCJA would lead to a decrease in federal tax revenue by $4.5 trillion between 2025 and 2034. Their analysis of the specific House GOP bill suggests a slightly lower conventional revenue reduction of $4.0 trillion and a dynamic reduction of $3.3 trillion over the same ten-year timeframe. The House budget resolution anticipates a potential $4.5 trillion increase in the deficit resulting from tax cuts over the next decade, but this is contingent upon achieving $1.7 trillion in offsetting spending cuts.
The Bipartisan Policy Center estimates that extending the individual and estate tax provisions of the TCJA, along with the revival of certain business tax provisions, would increase the federal deficit by more than $4 trillion from fiscal years 2025 through 2034. Similarly, the Center for American Progress projects that permanently extending the Trump tax cuts would cost the nation $4 trillion over the next decade. The Tax Policy Center’s analysis puts the cost of extending the core TCJA provisions at -$3,800 billion over ten years, with the extension of business tax breaks adding another -$830 billion to this figure.
It is important to note that the user’s query mentioned a potential cost of $10 trillion or $30 trillion. Based on the available research, these figures appear to be significantly higher than the current estimates for the core tax bill being debated. However, if one considers a broader array of potential Republican tax cut proposals beyond just the extension of the TCJA, such as eliminating taxes on Social Security and overtime pay and fully restoring the SALT deduction, the total cost could potentially reach around $9.1 trillion over ten years, including associated interest costs.
The consensus among various organizations points to a substantial budgetary impact from the proposed tax bill, primarily in the range of $3.3 trillion to $4.5 trillion in reduced federal revenue over the next decade, largely driven by the extension of the 2017 tax cuts. This signifies a considerable influence on the nation’s fiscal outlook. Furthermore, the possibility of the cost increasing significantly if additional tax cut proposals are adopted highlights the potential for an even greater impact on the national debt. The stated intention to offset these tax cuts with spending reductions, as outlined in the House budget resolution, indicates a strategy to manage the deficit implications, but it also sets the stage for contentious debates regarding which government programs will face cuts.
3. Potential Economic Impacts:
The potential economic consequences of the proposed tax bill are subject to varying interpretations and projections from di8fferent economic analyses. The Tax Foundation’s preliminary assessment suggests that the tax provisions could lead to an increase in long-run Gross Domestic Product (GDP) ranging from 0.6 to 1.1 percent. This growth could potentially translate into the creation of approximately 794,000 to 847,000 full-time equivalent jobs. However, their analysis also indicates the possibility of a slight decrease in overall wages and a minimal increase of less than 0.05 percent in American incomes, as measured by Gross National Product (GNP), in certain economic scenarios.
Analysis from the Tax Policy Center on the May 9th version of the bill indicates that the most significant benefits in 2026 would accrue to the top 5 percent of income earners. This suggests that the distributional effects of the proposed tax changes would disproportionately favor higher-income individuals.
In contrast, a long-term analysis conducted by the Congressional Budget Office (CBO) suggests a more concerning outlook. Their findings indicate that extending the TCJA could ultimately shrink the economy by 1.8 percent by the year 2054 due to the projected increase in the national debt. While the CBO acknowledges the possibility of a short-term economic boost in the initial years, they project that the negative effects stemming from increased debt will eventually outweigh these benefits in the long run.
The Council of Economic Advisers (CEA) offers a more optimistic perspective, asserting that extending the Trump tax cuts would lead to a substantial increase in both short-run (3.3 to 3.8 percent) and long-run (2.6 to 3.2 percent) real GDP. They also project that this extension would raise annual real wages and significantly increase the take-home pay for median-income households.
The Center on Budget and Policy Priorities (CBPP) presents a critical view, arguing that the 2017 tax law did not generate significant positive impacts on the economy and that extending these cuts would primarily benefit high-income households, thereby exacerbating existing racial inequities. They cite CBO analysis that suggests long-term economic harm and an increase in consumer borrowing costs as potential consequences.
Similarly, the Economic Policy Institute (EPI) contends that extending the tax cuts would largely favor the wealthy and corporations. They argue that this could lead to detrimental spending cuts in crucial social programs or a further increase in the national deficit, both of which could negatively impact working families across the United States.
The economic projections surrounding the extension of the 2017 tax cuts reveal a considerable divergence of opinion among economic experts. While some anticipate substantial economic growth and job creation, others foresee long-term economic decline due to the accumulation of national debt and the concentration of benefits among the highest income earners. Even among those who predict positive economic outcomes, there are reservations regarding the equitable distribution of these benefits. The potential trade-off between a possible near-term economic stimulus and the risk of long-term economic harm due to increased debt presents a significant challenge for policymakers as they consider the implications of this tax legislation.
4. Areas of Debate and Contention:
The proposed tax bill has ignited considerable debate and disagreement across several key areas. A primary point of contention revolves around the balance between the proposed tax cuts and offsetting spending reductions. Conservative members of Congress have been vocal in their demand for deeper cuts to government spending to mitigate the potential for the national debt to increase further.
The proposed cuts to vital social programs, particularly Medicaid and other social security initiatives, have also emerged as a highly contentious issue. While some Republicans advocate for more substantial reductions in these areas, others, like Senator Hawley, have expressed strong opposition to any cuts to Medicaid, citing the potential negative impact on millions of lower-income constituents. The proposed work requirements for Medicaid recipients have also become a point of contention, with disagreements over the timeline for their implementation.
The state and local tax (SALT) deduction cap remains a significant sticking point, especially for lawmakers representing states with high costs of living. The proposed increase to $30,000 for couples has been deemed insufficient by some, who continue to push for a higher cap that would provide more substantial relief to their constituents. These lawmakers argue that the current proposal falls short of their expectations and could potentially jeopardize the passage of the entire bill.
Beyond the core tax and spending provisions, the inclusion of items such as increased funding for deportation efforts and the rollback of green energy tax credits reflects broader ideological debates that extend beyond the realm of taxation. Democrats have also voiced strong opposition to the bill, emphasizing that its passage could lead to millions of Americans losing access to healthcare and food assistance programs, while simultaneously providing substantial tax cuts to the wealthiest individuals.
A central concern for many is the potential impact of the proposed tax cuts on the national debt and the long-term fiscal sustainability of the United States. Critics argue that the proposed tax reductions are not adequately offset by corresponding spending cuts, which could lead to a further increase in the nation’s already substantial debt burden.
The deep partisan divisions, as well as disagreements within the Republican party itself, highlight the significant political hurdles that this comprehensive fiscal legislation faces. These disagreements are rooted in fundamental differences in policy priorities and philosophical approaches to the role of government in the economy. The debate over the SALT deduction illustrates the regional economic disparities and the political influence of states with high costs of living, potentially leading to complex political dynamics. Furthermore, the inclusion of non-tax-related items within a tax bill moving through the budget reconciliation process raises questions about the scope and appropriateness of the legislation, potentially leading to procedural challenges in the Senate.
3. America’s Credit Rating Downgrade: Understanding the Significance:
3.1 What is a Sovereign Credit Rating?
A sovereign credit rating represents an independent assessment of a country’s ability and willingness to meet its financial obligations, particularly its debt repayments. These ratings are crucial indicators of a nation’s creditworthiness and are issued by credit rating agencies (CRAs) such as Moody’s Investors Service, Standard & Poor’s (S&P Global Ratings), and Fitch Ratings. These agencies evaluate a country’s economic and political environment to assign a rating that helps investors gauge the level of risk associated with investing in its debt securities, including sovereign bonds. A higher credit rating generally signifies a lower level of risk, which typically allows the country to borrow funds at lower interest rates in international capital markets.
Credit ratings are typically categorized into “investment grade” and “speculative grade.” Ratings ranging from AAA (or Aaa for Moody’s) down to BBB- (or Baa3 for Moody’s) are considered investment grade, indicating a relatively low to moderate risk of default. Ratings below this threshold, such as BB+ (or Ba1 for Moody’s) and lower, are classified as speculative grade (often referred to as “junk” grade), suggesting a higher probability of default(look at the End, Elmer Fudd).
In determining a sovereign credit rating, CRAs consider a wide array of factors. These include a country’s fundamental economic indicators, such as its Gross Domestic Product (GDP) growth rate, inflation levels, and current account balance. Political stability and the effectiveness of a country’s institutions are also critical considerations. Furthermore, the agencies closely examine a nation’s fiscal management practices, including its levels of government debt, budget deficits, and the overall trajectory of its public finances. The ability of a country to effectively manage its debt obligations and maintain sustainable fiscal policies is a key determinant in its creditworthiness assessment.
Sovereign credit ratings play a vital role in the global financial system. They serve as a fundamental benchmark for investors when making decisions about allocating capital across different countries. These ratings not only influence investor sentiment and market perceptions but also significantly impact a country’s access to international capital markets and the cost at which it can borrow funds on the global stage. A favorable credit rating can enhance a country’s ability to attract foreign investment and secure favorable borrowing terms, while a downgrade can lead to increased borrowing costs and potentially reduced access to capital.
3.2 The Moody’s Downgrade:
On May 16, 2025, Moody’s Investors Service announced its decision to downgrade the long-term issuer and senior unsecured ratings of the Government of the United States of America from Aaa to Aa1. This action marked the first time that Moody’s had removed the United States from its top-tier credit rating status and made Moody’s the last of the three major credit rating agencies to do so. Standard & Poor’s had previously downgraded the US in 2011, followed by Fitch Ratings in 2023.
The primary rationale behind Moody’s downgrade was the sustained increase in government debt and interest payment ratios over the past decade, which have reached levels significantly higher than those of similarly rated sovereign nations. Moody’s also highlighted the repeated failure of successive US administrations and Congress to enact effective measures to reverse the trend of large annual fiscal deficits and the associated growth in interest costs.
Looking ahead, Moody’s anticipates a further widening of federal deficits, projecting them to reach nearly 9% of GDP by 2035, an increase from 6.4% in 2024. This projected widening is primarily attributed to rising interest payments on the national debt, increasing entitlement spending, and a relatively low level of government revenue generation. Consequently, Moody’s expects the federal debt burden to rise to approximately 134% of GDP by 2035, compared to 98% in 2024.
In addition to these fiscal concerns, Moody’s also cited political dysfunction and gridlock within Washington as contributing factors to the downgrade. This highlights the agency’s assessment that the lack of political consensus and will to address the nation’s growing debt is a significant concern.
Despite the downgrade, Moody’s revised its outlook on the United States from negative to stable. In doing so, the agency acknowledged the exceptional credit strengths that the US continues to possess, including the size, resilience, and dynamism of its economy, as well as the enduring role of the US dollar as the world’s dominant reserve currency. This suggests that while Moody’s has concerns about the fiscal trajectory, it still recognizes the fundamental strengths of the American economy.
3.3 Potential Consequences of the Downgrade:
The downgrade of the US credit rating by Moody’s carries several potential consequences for the nation’s financial landscape. Primarily, a credit rating downgrade signals an elevated level of risk for investors who hold US debt. This increased perception of risk can lead to higher borrowing costs for the US government, as investors may demand higher yields on Treasury bonds to compensate for the perceived greater likelihood of default or difficulty in repayment.
These higher government borrowing costs can potentially translate into increased interest rates for consumers and businesses across various sectors of the economy. This could affect the affordability of mortgages, credit card interest rates, and the cost of borrowing for small businesses, potentially dampening economic activity. The downgrade could also introduce volatility into the stock market as investors react to the lowered confidence in the US’s fiscal stability.
Another potential consequence is a weakening of the US dollar in international markets. If investors perceive US assets as riskier, foreign demand for these assets, including the dollar, could potentially cool, leading to a depreciation of the currency. However, it’s important to note that Moody’s highlighted the continued role of the US dollar as the global reserve currency as a factor mitigating this risk.
The downgrade could also serve as a catalyst for increased pressure on policymakers to address the underlying fiscal issues that led to the rating change. It might accelerate calls for meaningful fiscal reforms aimed at reducing the national debt and achieving a more sustainable budgetary path.
Furthermore, the downgrade could have implications for the US’s standing in the global financial community. By lowering its credit rating, Moody’s has placed the US in the same category as countries like Austria and Finland. While still considered low-risk, this move signifies a step down from the “gold standard” of a triple-A rating and could influence how international investors view the relative safety of US debt. Some analysts interpret the downgrade as a further indication that the US’s level of debt is too high, necessitating greater fiscal discipline from Congress.
3.4 Historical Context:
The recent downgrade by Moody’s marks only the second time in the nation’s history that the agency has lowered the United States’ credit rating. Moody’s had maintained a perfect Aaa rating for the US since 1917. This historical context underscores the significance of the recent action.
Prior to Moody’s decision, Standard & Poor’s (S&P) downgraded the US credit rating in August 2011, lowering it from AAA to AA+. This downgrade occurred amidst intense political battles in Congress over raising the debt ceiling. More recently, in August 2023, Fitch Ratings also downgraded the US, moving its rating from AAA to AA+. Fitch’s rationale echoed concerns about expected fiscal deterioration, a high and growing government debt burden, and an erosion of governance.
Notably, each of these downgrades by the major credit rating agencies cited similar underlying concerns: rising levels of government debt, persistent budget deficits, and political dysfunction within the US government that hinders the ability to address these fiscal challenges. The fact that all three agencies have now lowered their rating for the US within the past fourteen years suggests a consistent and increasing concern about the nation’s fiscal management across different political administrations and economic cycles. The timing of the 2011 S&P downgrade, coinciding with a period of significant political gridlock over the debt ceiling, highlights the interconnectedness of political stability and the perception of US creditworthiness.
4. The Interrelation Between the Tax Bill and the Credit Rating Downgrade:
4.1 Fiscal Policy and National Debt:
A direct link exists between the proposed new tax bill and the rationale behind Moody’s credit rating downgrade. Moody’s explicitly stated that if the 2017 Tax Cuts and Job Act (TCJA) is extended, a key component of the current tax bill under consideration, it would add approximately $4 trillion to the federal primary deficit over the next decade, excluding interest payments. This projected increase in the national deficit directly aligns with the primary reason Moody’s cited for downgrading the US credit rating: the sustained increase in government debt and interest payment ratios.
The announcement of Moody’s downgrade occurred on the same day that President Trump’s tax bill faced a setback in Congress, failing to clear a key procedural hurdle. This timing underscores the intertwined nature of fiscal policy decisions and the assessment of the nation’s creditworthiness. Moody’s had already expressed concerns about the failure of successive administrations to reverse the trend of ballooning deficits. The proposed tax bill, with its potential to further exacerbate the deficit through the extension of tax cuts, reinforces these concerns. Furthermore, the difficulties encountered in advancing the tax bill through Congress, particularly the demands from some Republicans for deeper spending cuts to offset the tax reductions, highlight the ongoing challenges in adopting a fiscally responsible path forward. The inability to agree on measures to control the growth of the national debt is a central factor in Moody’s decision to lower the US credit rating.
4.2 Expert Analysis and Commentary:
The Moody’s downgrade has elicited a range of reactions and analyses from experts and political figures. Some analysts view the downgrade as a critical warning, urging policymakers to abandon deficit-increasing tax proposals. Others contend that it serves as further evidence of the need for greater fiscal discipline and a reduction in the nation’s substantial debt.
The White House has been critical of Moody’s decision, attributing the downgrade to the fiscal policies of the previous administration. Conversely, representatives aligned with the former administration have dismissed the analysis as politically motivated. The downgrade has indeed become a highly politicized issue, with both Democrats and Republicans engaging in a blame game, each attributing the nation’s rising debt to the other’s policies.
Despite the partisan rhetoric, a broader consensus exists among many economic experts that the escalating national debt is a serious issue that requires attention, regardless of political affiliations. While the political interpretations of the downgrade may differ, the underlying concern about the sustainability of the US’s fiscal trajectory is widely shared. The interplay between the proposed tax bill, which has the potential to add significantly to the deficit, and the credit rating downgrade, which directly reflects concerns about the nation’s debt management, underscores the critical juncture at which US fiscal policy currently stands.
5. Conclusion: Implications for America’s Economic Future:
The analysis of the proposed tax bill and the recent credit rating downgrade by Moody’s reveals a complex and interconnected set of challenges for the United States. The tax bill, primarily through the extension of the 2017 tax cuts, carries a significant projected cost, estimated to be in the range of $3.3 trillion to $4.5 trillion over the next decade. This potential increase in the national debt directly exacerbates the very concerns that led Moody’s to downgrade the US credit rating from Aaa to Aa1.
The economic consequences of both the tax bill and the credit rating downgrade are subject to debate. While some proponents argue that the tax cuts will stimulate economic growth and job creation, others, including the CBO, project potential long-term negative impacts due to increased debt. The credit rating downgrade could lead to higher borrowing costs for the government, potentially translating to increased interest rates for consumers and businesses and introducing volatility into financial markets.
The final form and impact of the tax bill remain uncertain, given the ongoing debates and divisions within Congress. However, the Moody’s downgrade serves as a significant signal of weakening fiscal strength and underscores the urgent need for policymakers to address the long-term drivers of the national debt. The confluence of a potentially debt-increasing tax bill and a credit rating downgrade points to a period of heightened fiscal scrutiny for the United States. The long-term implications for the nation’s overall economic health and prosperity will depend on the policy choices made in response to these challenges, particularly in terms of managing the national debt and ensuring sustainable fiscal policies. The path forward requires a careful consideration of the potential trade-offs between short-term policy goals and the long-term fiscal stability of the nation.
Key Tables:
* Estimated Cost of the Proposed Tax Bill (10-Year Window):
| Source | Estimate (Trillions of Dollars) | Scenario |
|—|—|—|
| House Ways & Means Committee | $3.8 (net spending) | Initial proposals |
| House Ways & Means Committee | $5.3 (net cost) | If all changes made permanent (excluding interest) |
| Tax Foundation | $4.5 (revenue reduction) | Extending expiring 2017 TCJA |
| Tax Foundation | $4.0 (conventional revenue reduction) | House GOP Bill |
| Tax Foundation | $3.3 (dynamic revenue reduction) | House GOP Bill |
| House Budget Resolution | $4.5 (deficit increase) | From tax cuts, contingent on $1.7T spending cuts |
| Bipartisan Policy Center | >$4.0 (deficit increase) | Extending individual & estate TCJA + reviving affected business tax |
| Center for American Progress | $4.0 (cost) | Permanently extending Trump tax cuts |
| Tax Policy Center | $3.8 (revenue reduction) | TCJA extensions (individual & estate) |
| Tax Policy Center | $0.83 (revenue reduction) | TCJA extensions (business) |
| Peter G. Peterson Foundation | $9.1 (deficit increase) | Full array of Republican tax cut proposals (including interest) |
* Historical US Credit Rating Downgrades by Major Agencies:
| Rating Agency | Date of Downgrade | Previous Rating | New Rating | Key Reasons Cited |
|—|—|—|—|—|
| S&P | August 2011 | AAA | AA+ | Debt ceiling fights in Congress, rising debt burden, and concerns about the government’s ability to manage its finances. |
| Fitch | August 2023 | AAA | AA+ | Expected fiscal deterioration over the next three years, high and growing general government debt burden, and erosion of governance. |
| Moody’s | May 2025 | Aaa | Aa1 | Increase over more than a decade in government debt and interest payment ratios, failure of successive administrations to reverse large fiscal deficits. |
Predicting the exact year when the U.S. will face a higher probability of default is inherently uncertain and depends on numerous complex and evolving factors. These include economic growth, government spending and revenue policies, interest rates, and global economic conditions.
However, based on current trends and projections from various institutions, we can identify potential periods of increased risk:
- Near-Term Elevated Risk (through 2025): Moody’s Asset Management Research team indicated in early March 2025 that the average risk of default for U.S. public companies reached a post-global financial crisis high of 9.2% at the end of 2024 and is predicted to remain elevated throughout 2025. They also noted that the average probability of default shows a strong leading relationship to actual default rates, typically leading changes by 9-12 months, suggesting sustained elevated risk in realized default rates through the end of 2025.
- Mid-2025 Potential Increase in Corporate Defaults: While S&P Global Ratings projected in February 2025 that the U.S. speculative-grade corporate default rate could fall to 3.5% by December 2025, they also highlighted a pessimistic scenario where the rate could rise to 6% if economic growth slows more than anticipated.
- Long-Term Unsustainable Fiscal Path: The U.S. Government Accountability Office (GAO) stated in February 2025 that the federal government faces an unsustainable fiscal future. They project that unless current revenue and spending policies change, debt held by the public will exceed GDP around 2026 and continue to grow significantly faster than the economy in the long term, reaching 200% of GDP by 2047. While this doesn’t pinpoint a default year, a rapidly rising debt-to-GDP ratio increases the risk of fiscal instability over time.
- Rising Debt and Interest Costs: The Congressional Budget Office (CBO) projected in February 2024 that federal debt held by the public would rise from 99% of GDP in 2024 to 116% in 2034 and continue to grow if current laws remain unchanged, potentially reaching 172% of GDP in 2054. A significant driver of this increase is the growth of interest costs on the debt, which could strain the government’s ability to meet its obligations in the future. In fiscal year 2024, federal net interest spending increased by 14% compared to the previous year.
It’s important to understand that these are projections based on current information and models, which are subject to change. Unexpected economic shocks or policy shifts could significantly alter the trajectory of the U.S. fiscal situation.
General Information on Factors Influencing Default Risk:
A country’s probability of default is influenced by a multitude of interconnected economic and political factors:
- Debt-to-GDP Ratio: A high and rising debt-to-GDP ratio indicates a larger debt burden relative to the country’s economic output, making it more challenging to service the debt. As of December 2024, the U.S. government debt accounted for 124.0% of the nominal GDP.
- Fiscal Deficits: Persistent budget deficits (where government spending exceeds revenue) lead to increased borrowing and a higher national debt.
- Economic Growth: Strong economic growth can make it easier for a country to manage its debt burden as the economy generates more tax revenue. Conversely, slow or negative growth can exacerbate debt problems.
- Interest Rates: Higher interest rates increase the cost of servicing government debt, putting pressure on the budget.
- Political Stability and Policy Decisions: Political uncertainty or gridlock can hinder the implementation of necessary fiscal reforms. Government decisions regarding taxation, spending, and debt management are crucial.
- Global Economic Conditions: External factors such as global recessions, changes in commodity prices, and shifts in international capital flows can impact a country’s financial stability.
- Market Sentiment: Investor confidence plays a significant role. A loss of confidence in a country’s ability to repay its debt can lead to higher borrowing costs and potentially trigger a financial crisis.
It is crucial to monitor these factors and the projections of various financial institutions and government agencies to assess the evolving risks of a U.S. default. Source.
Elmer Fudd, if that doesn’t wake you up, nothing will. If that doesn’t scare you, nothing will. If it doesn’t, it’s most likely because Congress and all you Elmer Fudds are just that full of BULLSHIT. But, by damn, America is gonna have the Fiddler one day with empty pockets. You’ll be stopped in your tracks.
Predicting the full consequences of a U.S. default on its loans is a complex undertaking, as there is no modern precedent for such an event. However, based on economic principles and expert analyses, we can paint a picture of the potential fallout, both domestically and globally:
Immediate Economic Shock:
- Financial Market Chaos: A U.S. default would likely trigger a sharp and immediate drop in global stock markets. Investor confidence in U.S. Treasury bonds, long considered the safest asset in the world, would be shattered. This could lead to a massive sell-off of U.S. debt, causing yields (interest rates) to skyrocket.
- Increased Borrowing Costs: The rise in Treasury yields would ripple through the entire financial system, leading to higher interest rates for mortgages, car loans, credit cards, and corporate debt. This would make borrowing more expensive for everyone, stifling economic activity.
- Dollar Depreciation: The U.S. dollar, the world’s reserve currency, would likely depreciate sharply against other major currencies. This would make imports more expensive, potentially leading to higher inflation.
- Liquidity Crisis: The turmoil in the Treasury market could lead to a broader liquidity crisis, where financial institutions become hesitant to lend to each other, freezing up credit markets.
Domestic Consequences:
- Severe Recession: Most economists predict that a U.S. default would plunge the country into a deep and potentially prolonged recession, comparable to or even worse than the 2008 financial crisis or the Great Depression.
- Job Losses: Businesses would likely scale back investment and hiring in response to the economic uncertainty and higher borrowing costs, leading to significant job losses and a rise in the unemployment rate. Some estimates suggest millions of jobs could be lost.
- Disruption of Government Payments: The government would be legally constrained from paying its obligations. This could lead to delays or cessation of payments for Social Security, Medicare, Medicaid, veterans’ benefits, government salaries, and tax refunds, directly impacting millions of Americans.
- Cuts in Government Services: With limited funds, the government would be forced to drastically cut essential services and programs, affecting everything from national defense to infrastructure projects.
- Damage to U.S. Credit Rating: The U.S. would almost certainly see its credit rating downgraded, potentially making it more expensive to borrow in the future, even after the default is resolved.
- Erosion of Consumer Confidence: The economic turmoil and uncertainty would severely damage consumer confidence, leading to decreased spending and further exacerbating the recession.
- Increased Poverty and Inequality: Job losses and cuts to social safety nets would likely lead to an increase in poverty and widen the gap between the rich and the poor.
Global Consequences:
- Global Recession: As the world’s largest economy, a U.S. default would have significant spillover effects globally, potentially triggering a global recession. Reduced U.S. demand for goods and services would hurt other countries’ economies.
- Financial Contagion: The disruption in the U.S. Treasury market could spread to other financial markets around the world, destabilizing financial institutions and triggering crises in other countries.
- Loss of Confidence in the Dollar: The dollar’s status as the global reserve currency could be undermined, leading countries to seek alternative currencies for trade and reserves. This could diminish U.S. economic influence.
- Increased Geopolitical Instability: A U.S. default could damage its global leadership position and potentially lead to increased geopolitical instability as other nations question the reliability of the U.S.
- Disruption of Global Trade: The financial market turmoil and potential dollar depreciation could disrupt international trade flows, further harming global economic growth.
Historical Context:
While the U.S. has never technically defaulted on its debt obligations in the modern era, there have been periods of near-defaults or payment delays. For example, in 1979, there were delays in Treasury payments due to administrative issues. These events, while not full defaults, caused concern and some market volatility. The current situation, with a potentially larger and more impactful default, would likely have far more severe consequences.
Long-Term Implications:
Even after a hypothetical default was resolved, the long-term implications for the U.S. and the global economy could be significant. The loss of trust in the U.S. as a reliable borrower could lead to permanently higher borrowing costs, a diminished role for the dollar, and a weaker U.S. economy in the decades to come.
In conclusion, a U.S. default on its loans would be a catastrophic event with severe and far-reaching consequences for the U.S. economy, the global financial system, and the well-being of people around the world. It would likely trigger a deep recession, financial market chaos, and a loss of global economic leadership for the United States.
The safety of your money in the bank during a U.S. default scenario is a significant concern, and the answer is multifaceted:
FDIC Insurance:
- The Federal Deposit Insurance Corporation (FDIC) insures deposits in member banks up to $250,000 per depositor, per insured bank, for each account ownership category.
- This insurance is designed to protect depositors in the event of a bank failure.
- Even in a severe economic downturn triggered by a U.S. default, the FDIC’s ability to cover insured deposits is a crucial factor. However, a widespread banking crisis resulting from a default could strain the FDIC’s resources.
- Historically, the FDIC has acted to protect insured depositors even in bank failure scenarios, often by arranging for another bank to take over the deposits of the failed institution.
Potential Risks in a U.S. Default:
- Economic Instability: A U.S. default would likely cause significant economic instability, potentially leading to a recession and financial market turmoil. This could increase the risk of bank failures.
- Bank Runs: Heightened fear and uncertainty could lead to bank runs, where many depositors withdraw their funds simultaneously due to concerns about the bank’s solvency. While FDIC insurance exists, a widespread panic could create liquidity issues for banks in the short term.
- Credit Crunch: A default could freeze up credit markets, making it difficult for banks to operate normally.
How a Bank Failure Typically Affects Depositors:
- FDIC Intervention: If an FDIC-insured bank fails, the FDIC takes over to manage the bank’s assets and protect depositors.
- Quick Access to Insured Funds: The FDIC aims to make insured funds available to depositors as quickly as possible, usually within a few days of the bank’s closure. This can be done through paying depositors directly or by arranging a merger with another bank that assumes the deposits.
- Uninsured Deposits: Deposits exceeding the $250,000 limit are uninsured and would be at risk in a bank failure. Depositors with uninsured amounts might receive a portion of their funds as the FDIC sells the failed bank’s assets, but there’s no guarantee of recovering the full amount.
Safety Measures You Can Consider:
- Stay Within FDIC Limits: Ensure your deposits at any single FDIC-insured bank do not exceed $250,000 per ownership category.
- Diversify Across Banks: If you have large sums, consider spreading your deposits across multiple FDIC-insured banks.
- Understand Ownership Categories: Be aware that the $250,000 limit applies per ownership category (e.g., single, joint, retirement accounts). You can have more than $250,000 insured at the same bank if your deposits are in different ownership categories.
- Monitor Bank Health: While it’s difficult for individuals to predict bank failures, you can stay informed about the overall financial climate.
In Conclusion:
While the FDIC provides a significant safety net for insured deposits, a U.S. default would create an environment of extreme economic uncertainty that could increase risks to the banking system. The FDIC is intended to prevent losses for insured depositors, but the scale and impact of a widespread crisis stemming from a U.S. default are hard to predict with certainty. Staying informed and managing your deposits within FDIC insurance limits are prudent steps in such uncertain times.
Hey Elmer Fudd, did you learn any thing about the GREAT DEPRESSION? Or did you miss that one too? Would we go into a Great Depression if We Default on our Loans. They come get your car if you default. They come get your home if you default.
So, if We default, will they come get our Tanks, Our Aircraft Carriers, our Fighter Jets, Our Nukes?
That’s a very serious question, and many economists believe that a U.S. default could indeed trigger an economic crisis that could be worse than the Great Depression in certain aspects, although it might differ in its exact characteristics. Here’s a breakdown of why that concern exists:
Similarities to the Great Depression:
- Severe Economic Contraction: A default would likely lead to a deep and prolonged recession, marked by significant declines in GDP, industrial production, and international trade, similar to the Great Depression.
- Massive Job Losses: Businesses would be forced to lay off workers due to economic uncertainty, decreased demand, and frozen credit markets, potentially leading to unemployment rates even higher than during the Great Depression’s peak.
- Financial System Collapse: The turmoil in the Treasury market could trigger a broader financial crisis with widespread bank failures, a collapse in asset values (stocks, bonds, real estate), and a freeze in lending, reminiscent of the banking panics of the 1930s.
- Deflationary Pressures: While the immediate aftermath might see some price increases due to a falling dollar, a deep and prolonged recession could lead to deflationary pressures as demand collapses. The Great Depression was characterized by significant deflation.
- Social Unrest and Human Suffering: The widespread economic hardship would likely lead to increased poverty, homelessness, and social unrest, mirroring the social consequences of the Great Depression.
Why it Could Be “Greater”:
- Global Interconnectedness: The global economy is far more interconnected today than it was in the 1930s. A U.S. default, as the issuer of the world’s reserve currency and the cornerstone of the global financial system, would have immediate and devastating ripple effects worldwide, potentially triggering a synchronized global depression. The Great Depression, while global, might not have seen such an instantaneous and widespread impact.
- Role of U.S. Debt: U.S. Treasury bonds are the bedrock of the modern financial system, used as collateral, a benchmark for interest rates globally, and a safe-haven asset. A default would shatter this foundation, creating unprecedented instability.
- Dollar’s Reserve Currency Status: The U.S. dollar’s role as the primary reserve currency gives the U.S. significant economic power. A default could severely undermine this status, leading to a loss of confidence and potentially a shift towards other currencies, further destabilizing the global financial order. This didn’t happen to the same extent during the Great Depression.
- Modern Financial Instruments: The proliferation of complex financial instruments and derivatives linked to U.S. debt could amplify the shockwaves of a default, creating unforeseen and potentially catastrophic consequences throughout the financial system.
- Limited Policy Responses: A default could severely limit the U.S. government’s ability to respond to the crisis. It would be unable to borrow to fund stimulus measures or provide safety nets, as its creditworthiness would be shattered. This could prolong and deepen the downturn.
However, there are also differences:
- FDIC Insurance: Today, bank deposits are insured by the FDIC, which could prevent widespread bank runs seen during the Great Depression.
- Learned Lessons: Policymakers have (hopefully) learned lessons from the Great Depression and the 2008 financial crisis and might be quicker to implement aggressive measures (if they have the capacity post-default) to try and mitigate the damage.
Conclusion:
While the exact nature of a crisis following a U.S. default is uncertain, the potential for an economic catastrophe greater than the Great Depression in its global reach and the fundamental disruption to the financial system is a very real concern. The interconnectedness of the world and the pivotal role of U.S. debt in the modern economy amplify the potential for a truly devastating global economic collapse.
DOGE CLAIMS-
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But it gets even more weird-
A certain Passage in the Big Beautiful Tax Bill is Anti-Beautiful and directly attacks and appears aimed at the Elderly and those who might have benefited of DEI possibilities-
This passage describes the distributional effects of a Republican tax plan projected for 2029, and compares it to current tax law. Here’s a breakdown of the key points:
- Lower-Income Americans:
- Those earning under $30,000 will pay more in taxes.
- Those earning under $15,000 will see a 53% increase in their tax burden, with their average tax rate rising from 3.3% to 5.1%.
- Higher-Income Americans:
- Households earning over $1 million will receive a tax cut, with their average tax rate decreasing from 30.8% to 28.7%, resulting in an estimated $74 billion in collective savings.
- Middle-Income Americans:
- Those earning over $30,000 will receive a tax cut, according to the Joint Committee on Taxation (JCT).
- Additional Factors:
- The JCT figures do not account for other tax law changes, such as the increased estate tax threshold.
- Cuts to social programs like SNAP and Medicaid, which disproportionately affect low-income individuals, are not included in the JCT analysis.
- The effects of the presidents tariffs are also not included in the JCT analysis.
- The Penn Wharton Budget Model predicts that many Americans earning under $51,000 will see their after-tax income decrease starting in 2026.
- Overall Skew:
- The combined effect of these factors results in a tax plan that heavily favors the wealthiest Americans.
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That’s contradictory. Over $30,000 will see Tax cut. Those making less than $51,000 will see less money after tax. How can this be? It’s contradictory.
You’ve highlighted a crucial point that reveals the complexity of tax policy analysis. Here’s a breakdown of why those two statements can coexist, and why it appears contradictory:
- Different Data Sources and Methodologies:
- The Joint Committee on Taxation (JCT) provides one set of data, which indicates tax cuts for those earning over $30,000.
- The Penn Wharton Budget Model uses a different model and incorporates additional economic factors, leading to the conclusion that many earning under $51,000 will see a decrease in after-tax income.
- These models can differ in their assumptions about economic growth, behavioral responses to tax changes, and how they account for various tax provisions.
- “Tax Cut” vs. “After-Tax Income”:
- A “tax cut” in the JCT sense might refer to a reduction in the direct income tax burden.
- “After-tax income,” as calculated by the Penn Wharton model, considers the broader economic impacts of the tax plan. This can include:
- The phasing out of certain tax benefits.
- The effects of economic changes triggered by the tax plan (e.g., changes in economic growth, inflation).
- The effects of the tax plan on government programs, which in turn effect individuals.
- Phasing Effects:
- The tax cuts may be temporary, or phase out for lower income earners sooner than higher income earners.
- The negative effects on lower income earners may not begin until future years, as the Penn Wharton budget model shows the decrease in after tax income beginning in 2026.
- Indirect Effects:
- Changes to programs like SNAP and Medicaid, which disproportionately affect lower-income individuals, can reduce their overall financial well-being, even if their direct income tax burden is slightly lower.
- Tariffs can raise the cost of goods, which affects those with lower incomes more.
- Average vs. Individual Experiences:
- The $30,000 figure and the $51,000 figure are averages. Some individuals within those ranges might experience different outcomes.
- It is possible that the average person making between 30,000 and 51,000 will have a very small tax cut, but because of other economic factors, their overall financial situation will worsen.
In essence, while some within the $30,000-$51,000 range might see a nominal “tax cut” on their income tax bill, other economic factors can outweigh those savings, leading to a net decrease in their after-tax income.
Over 115,766,667 Americans will be affected and truly screwed! And this happens because thr GOP only want to please 902 Billionaires.
thelivingbreathingjamesbrown.com 
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