Budgets, Taxing, Tariffs, Spending, and Priorities

The budget of the United States, hammered out every year, is a reflection on the policies and priorities of the nation. Just as the national economy has grown over the years, so too has the federal budget. At the end of World War II, the federal government spent just $34.5 billion ($472 billion in 2023 dollars); it was not until 1963 that the federal spending reached $100 billion ($1.1 trillion); twenty-four years later, in 1987, it reached $1 trillion ($2.7 trillion). By 2018, federal spending topped $4 trillion for the first time; it reached over $6 trillion ($6.3 trillion) during the first year of the Biden administration; and it reached will top $7 trillion ($7,028 trillion) in 2025.

Source: “The Budget and Economic Outlook: 2025 to 2035,” Congressional Budget Office, January 2025, https://www.cbo.gov/publication/61172#_idTextAnchor004

Budgets, Taxes, Tariffs, and Spending

Under the Trump Administration

👎 Elon Musk and his DOGE operatives promise $2 trillion in federal savings (January 2025)

Elon Musk, the unelected sidekick of Donald Trump, promised to cut out $2 trillion in wasteful government spending. Through his so-called Department of Government Efficiency (DOGE), Musk and his underlings would identify waste and fraud, they would fire hundreds of thousands of federal workers, and lay waste to federal programs and agencies. All this would be done with the blessing of Donald Trump with not a peep of protest from Republican lawmakers in the House and Senate.

👎 House Republicans plan for funding tax breaks for the richest Americans: cut out Medicaid funds (March 2025).

In preparing its FY2026 budget, House Republicans were searching for ways to make substantial cuts, in order to have enough money for tax cuts for the wealthiest. Social Security, Medicare, Interest on the National Debt—three of the biggest items were off the table for tax cuts. What could be cut? The biggest target would be Medicaid. Yes, cut out medical coverage for poor people and those who serve them, take that money to help pay for tax cuts for the richest of Americans.

👎 Tax revenue could drop by 10 percent in 2025 thanks to DOGE firings and disruptions. (March 2025)

America needs every dime of revenue it can get pay for its expenditures. But with disruptions and layoffs at the IRS, under the guise of cutting out waste, fraud, and abuse, tax experts warn that tax revenue could drop by 10 percent—over $500 billion—in 2025. Law professor Natasha Sarin, a former Treasurer counselor, argued that with a reduced IRS the remaining staff have less capacity to collect and enforce taxation, and that some taxpayers, knowing their chances of being audited have diminished, would be tempted to cheat. DOGE argues that $140 billion will be saved; Sarin and her colleagues at Yale forecast that to cut half of the IRS’s workforce alone would mean a loss of $395 billion in revenue, and possibly up to $2 trillion.

👎 Trump tariff wars: threats, reprisals, counter-threats (January, 2025-present)

Tariffs on Canadian products, tariffs on Mexican goods, tariffs on the EU, tariffs on Chinese products, global tariffs on automobiles—10 percent, 25 percent, 100 percent! Then Trump in early April 2025, “Liberation Day” as he dubbed it, announced across-the-board 10 percent tariffs as minimum and for 60 countries, higher tariffs. Products from foreign countries are slapped with tariffs; their leaders retaliate; Trump gets mad, raises the tariff ante, and soon, it is nothing short of a tariff war. Where will it end? What does this do to American credibility abroad and its trustworthiness as an ally?