Read: https://rogerboyd.substack.com/p/trumps-fiscal-hole-an-emperor-in
The US combination of high government debt to GDP (and very high overall public and private debt to GDP), a high government deficit even with a growing economy, and a 4% of GDP current account deficit places it in the worst position relative to other Western nations; only excepting a Japan that went into full on debt monetization many years ago. Rating agencies estimate a 7.5% of GDP US deficit in both 2025 and 2026, given Trump’s stated plan to renew his expiring tax cuts and provide more for the rich oligarchs, and the small majority that the Republicans have in the Congress. Hence the emergence of DOGE under Elon Musk tasked with rapidly reducing expenditures.
Note: The 7.5% of GDP deficit prediction caught my attention. I just got through predicting the 2025 deficit as $2.1 trillion, which is 6.9% of GDP. A 7.5% of GDP deficit in 2025 would be $2.3 trillion, which is another $200 billion.
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