For several months of debate, the keys to the great financial reform of Trump remained constant, and the strong tax descent was focused in the richest 10% and a strong reduction in assistance, especially those that are aimed at the poorest. But the markets focused on four keys that will influence the United States in a special way, in the short -term medium term: “debt roof”, “Section 899”, assistance to renewable energy sources and increasing the deficit.
The main short -term relief is that the United States will not be suspended from payments. The Ministry of Treasury warned that the United States would not pay its debt in August if the Congress did not approve of a new permit to issue a new debt to pay for its current expenses. This law does this, giving a new permission to issue 5 billion additional debt. Last year’s deficit amounted to 1.8 billion, and this law will be shot by 2.2 billion, so This limit will be reached by 2028The field of a blow that avoids what would be an unprecedented financial chaos.
This relief for markets will counteract exactly from a strong increase in deficiency and debt. Currently, US government debt (domestic discount between ministries and government agencies) is 98% of GDP. In this law, by 2024, the total public debt will increase to 130% of GDP, according to the Committee on the federal responsible budget, Similar center Conservative, which advocates reducing the deficiency. With a profitability of debt above 4%, the medium -term effect will be very alarming, and the president of the Federal Reserve System Jerome Powell deleted the “unstable” last Tuesday.
The big problem, as Elon Musk discovered, is that Budget reduction is almost impossible: Muskit barely extends several tiny games by its State Department of Efficiency, and the sanitary reductions of this law are extremely unpopular in polling stations. In addition, Republicans always want to spend more money on defense and immigration, democrats want to create great social assistance, and debts do not stop growing. If we add pensions and public health care for pensioners, More than 60% of the current expenses are politically inviolableThe rest is not much more than it is necessary to manage public administration in a country with 340 million people and support the minimum social security network.
And here there is insoluble tension: democrats promise to cancel the majority of expenses, and Republicans never establish tax reduction. If the ultimate goal is that the United States has a 100% deficit, and its budget is funded only on the basis of debt, at some point someone should increase taxes.
Consequently, Trump chose tariffs, but its effect will remain far from compensation for tax drops: Until June 30, they raised 50.6 billion dollars more than in 2024Historically high figure, but far from 410,000 million deficits that this law will cause annually. And in practice, tariffs are a regressive tax that will cost a higher percentage of their salary the poorest than the richest. Combination, along with the consequences of a commercial war, which will not help growth.
Trump’s dream, in order not to repeat, is that US taxes are paid by foreign countries in a certain tax system in which the inhabitants of the rest of the planet pay government spending on their pocket. The tycoon repeats his faith that tariffs are paid by foreign countries, and not by American importers who transfer these additional expenses to consumers of their country. The influence of tariffs that Trump himself put on washing machines in his first mandate, which led to a significant increase in prices that the Americans of their pockets had to pay, show that His dream that foreigners will pay ”the USA is just a dream.
‘World Peace Tip’
If tariffs are an economic attack on the rest of the world, then the full war remained in Inkwell. So the “section 899” would allow Trump Bring “” Revenge tax “By imposing bets on foreign firms working in the United States and belonging to countries with a “discriminatory tax system”. The theory was to attack an agreement on a minimum level of 15% on transnational corporations agreed around the world by the Joe Biden government. But the threat is that this power can also be used to attack countries with tariffs on American technologies, such as the EU or even all countries with VAT, given the hatred of the current US government for this tax.
Wall Stracks trembled by this possibility, which opened the door for a series of financial battles among the whole world and the USA, and this would sharply dissuade foreign investment in this country. Fortunately, the Senate erased this article without taking into account.
That they will fly Renewable helpThe field of amendments to the law accelerated the end of incentives approved by Joe Bayden for renewable funds. Plants that want to use this help will have 12 months to start work. The law will end with assistance for the purchase of electric vehicles, housing reforms and the construction of stable houses, as well as the production of pure energy.
The effect of all these changes will be to reduce the rhythm of the energy transition. According to the World Institute of Resources, the production of solar energy and the installation of batteries continues to grow greatly, while the wind has been staggered. Trump’s hatred to the mills – “ugly and drive whales to go crazy,” he said, he hit the sector.
The problem that Republicans face is that it is that These sectors grow more strongly, namely in the states that dominate, such as TexasThe field for many conservative deputies will have to encounter voters who are angry with the stop of renewable plants and the cancellation of projects in their villages. And Musk threatens to launch an alternative conservative party, which is in favor of pure energy. In addition to accelerating climate change, the consequences of these changes can have a lot of tail.
