Sometimes that are only a few words or numbers that trigger something inside you, what anyhow was on your mind. In my case, it was when I listened to Bernie Sanders commenting on President Trump’s speech in Congress.
So currently the Trump administration is proposing significant tax cuts, including making permanent the 2017 tax reductions, eliminating federal income taxes on Social Security benefits, exempting tips and overtime pay from taxation, introducing deductions for auto loan interest on American-made vehicles, and reducing the corporate tax rate from 21% to 15% for domestic production activities. These measures are projected to decrease federal revenue by approximately $5 trillion to $11 trillion over the next decade.
Reducing the U.S. federal corporate tax rate from 21% to 15% is projected to decrease federal revenues by approximately $600 billion to $673 billion over a decade. The Penn Wharton Budget Model estimates a revenue loss of $596 billion over ten years, while the Tax Foundation projects a $673 billion reduction within the same period. Similarly, the Brookings Institution suggests that such a tax cut would cost at least $600 billion over the next decade.
To counter these tax cuts, the Trump Administration wants to cut Medicaid by 880 billion dollars over the next ten years, which would compensate the corporate tax rate from 21% to 15%. But what is Medicaid?
As of October 2024, approximately 72 million individuals were enrolled in Medicaid across the United States. This figure represents about 22% of the U.S. population, underscoring Medicaid’s role as a vital component of the nation’s healthcare system.
Medicaid provides health coverage to one in five Americans, including 40% of all children and 60% of all nursing home residents. The program offers a wide range of services, from primary and acute care to long-term services and supports, ensuring that low-income populations, children, seniors, and individuals with disabilities have access to necessary medical care.
It’s important to note that Medicaid enrollment can fluctuate due to various factors, including economic conditions, policy changes, and public health emergencies. For instance, during the COVID-19 pandemic, Medicaid enrollment increased significantly as more individuals became eligible for coverage.
Given the program’s extensive reach, any proposed changes to Medicaid funding or eligibility criteria could have significant implications for millions of Americans who rely on this essential healthcare safety net.
Let’s consider who currently manages the government of the USA:
Collectively, the net worth of Trump’s cabinet and top appointees is estimated to exceed $460 billion, largely due to the inclusion of Elon Musk, the world’s richest person.
Notable billionaires in the administration include:
- Elon Musk: Appointed as Co-Director of the newly established Department of Government Efficiency, Musk’s net worth is approximately $400 billion.
- Charles Kushner: Serving as Ambassador to France, Kushner’s net worth is around $7.1 billion.
- Donald Trump: The President himself has an estimated net worth of $6.2 billion.
- Stephen Feinberg: Appointed as Deputy Secretary of Defense, Feinberg’s net worth is about $5 billion.
- Leandro Rizzuto Jr.: Serving as Ambassador to the Organization of American States, Rizzuto Jr.’s net worth is approximately $3.5 billion.
Bottom line, the very poor 22% of US Americans shall sponsor the tax cuts for the very wealthy in the US. But by the way, since the poor are so poor, 880 billion “savings” for the state expensive are, according to my arithmetic knowledge, not even closely enough to counter tax cuts between $5 trillion to $11 trillion over the next decade.
So we see the same drama in the US as usual. The Republicans claim to be the saviors of the state household when they are in opposition, and when they are in power, they manage even to increase the incredible high US deficit.
As of the end of fiscal year 2024 (September 30, 2024), the United States federal budget deficit was approximately $1.8 trillion, equating to 6.4% of the Gross Domestic Product (GDP). This marks an increase from the previous fiscal year’s deficit, which stood at $1.7 trillion, or 6.2% of GDP.
As of March 5, 2025, the United States’ national debt has reached approximately $36.22 trillion. This figure represents the total amount of money the federal government owes to creditors, both domestic and international.
So who cares 5-11 more trillion debts don’t matter, but please take care of that the poorest in the US at least contribute to deficit reduction.
The U.S. can afford its massive debt primarily because the U.S. dollar is the world’s dominant reserve currency. This means that countries, businesses, and investors around the world trust and rely on the dollar for trade, savings, and financial transactions.
Key Reasons the U.S. Can Handle High Debt:
- The U.S. Controls the Dollar – Since only the U.S. government can issue dollars, it can always generate more money to pay its debts, preventing default.
- Global Demand for Dollars – Many countries hold U.S. dollars as reserves, and most international trade (e.g., oil, commodities) is conducted in dollars. This keeps demand high and ensures stability.
- U.S. Treasuries Are Seen as Safe – The world considers U.S. government bonds (Treasuries) a secure investment, so there’s always demand for them, allowing the U.S. to borrow cheaply.
- The Economy Supports It – The U.S. has the world’s largest economy, giving confidence that it can manage debt through growth and taxation.
The Risk
If trust in the dollar weakens (due to excessive debt, inflation, or loss of global confidence), borrowing costs could rise, making debt harder to manage. However, for now, the U.S. benefits from its unique position as the issuer of the world’s most trusted currency.
Summary: It’s all madness.
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