As reported in this Reuters article, President Donald Trump just signed a sprawling legislative package of tax cuts and federal spending reforms. The legislation, named the "One Big Beautiful Bill Act," passed after weeks of negotiations and razor-thin House and Senate votes. This bill is Trump's first big legislative achievement of his second term. The new legislation makes Trump's 2017 tax cuts permanent, funds his immigration crackdown, and knocks millions of Americans off of health insurance (although Republicans argue they are getting rid of waste, fraud, and abuse).
The One Big Beautiful Bill Act will have significant economic effects over the coming years. Most independent analyses predict small boosts in GDP growth and household incomes, as tax cuts and new deductions temporarily increase consumption and investment. From 2025 to 2027, the U.S. economy could grow between 0.2-0,5 percentage points higher than if the bill had not been enacted, although by 2054, the GDP would be 3 percent smaller than if the bill had not been enacted (source). The short-term growth is driven by higher after-tax income and business incentives for investments. The long-run GDP growth slowdown is mainly due to the higher interest rates that the bill will cause and the crowding out as a result of that. According to the Congressional Budget Office, the Big Beautiful Bill will add approximately $3.4 trillion to the deficit over the next 10 years. Overall, it looks like the One Big Beautiful Bill will deliver short-term economic success, while the long run looks less promising. It is important to note that the Big Beautiful Bill has many smaller features that could make economic impacts, but this article chooses to look at the Bill as a whole and a couple of key features of the Bill.
As reported in this Reuters article, President Donald Trump just signed a sprawling legislative package of tax cuts and federal spending reforms. The legislation, named the "One Big Beautiful Bill Act," passed after weeks of negotiations and razor-thin House and Senate votes. This bill is Trump's first big legislative achievement of his second...
As reported in this CNN article, the Federal Reserve decided yesterday to hold rates between 4.25% and 4.50%. President Trump, who has called for major Federal Reserve rate cuts, was disappointed in the Fed's decision. In a Truth Social post, Trump said that rates should be cut by 2.5 percentage points–equivalent to ten standard rate cuts. Trump...
As reported in this article by The Guardian, earlier this week, President Donald Trump announced that the U.S. had reached a ceasefire agreement with the Houthis in Yemen. The U.S. will stop its bombing campaign against the Houthis, and in return, the Houthis agreed to stop targeting shipping in the Red Sea. The U.S. started its campaign after...