Paying the rich instead of taxing them

Economist Bob Pollin spells out the impact of Trump’s “Big, Beautiful Bill”:

The most critical point is that the current deficits are not serving to prevent an economic collapse. They are rather simply helping rich people get richer, while attacking the living standards of working people and the poor, as well as continuing to lavish exorbitant funds on the military.

Is the government about to go broke as a result? The most important indicator here is how much we have to pay to cover these debts — i.e., the interest that the government pays on the U.S. Treasury bonds. In 2024, the government paid nearly $900 billion in interest to its creditors, equal to 3.8 percent of GDP. That is below the 4.9 percent of GDP that the government paid during the Ronald Reagan/George H.W. Bush presidential era. We did not hear Reagan, Bush, or any other Republican politician of that era scream then that the sky was falling. Nor did the sky fall.

Still, the government’s $900 billion in 2024 interest payments totaled more than it spent on education, scientific research, public infrastructure, environmental protection, and global humanitarian aid combined….

The government’s creditors are mainly rich individuals and foreign governments. The government does have the wherewithal to keep forking over these interest payments to its creditors. Yet, by running large fiscal deficits now, when we are not fighting a recession or a world war, the government is effectively paying rich people to lend it money rather than making them pay minimally decent shares of their income and wealth in taxes. Correspondingly, the government’s interest payments that are now lining rich people’s pockets — and will flow into these pockets even more abundantly thanks to Trump’s bill — also represent hundreds of billions of dollars that could otherwise be devoted to public health, public education, food security, and building a green economy.

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