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Budget Deal Shows Trump Serious About Spending Cuts

Michael Busler
4 min readDec 23, 2024

President Trump, with Elon Musk and Vivek Ramaswamy, will dramatically reduce government spending and eventually balance the budget.

President-elect and de facto President Donald Trump campaigned to reduce government spending to eventually balance the government budget and reduce the public debt. Last week, during Congress’ battle to pass a spending bill, Trump showed just how serious he is.

Annual deficit spending and the resulting public debt are huge problems. In 60 of the last 64 years, the federal government has spent more money than was received in tax revenue. The deficit was financed by selling government bonds. Most of the bonds mature in 10 or 20 years.

There is no plan in place to ever repay any of that debt. When a bond matures, the government simply sells new bonds to pay-off the maturing bond. Because of this, the public debt keeps getting larger.

The public debt now exceeds $36 trillion. Last year the annual interest expanse was nearly $900 billion. Because the maturing bonds carried a coupon rate of 1% to 1–1/2% and the refinanced bonds carry a rate of about 4–1/2% today, the interest expense is rapidly growing. Last year the interest expense was about 14% of total government spending.

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Michael Busler
Michael Busler

Written by Michael Busler

Dr. Busler is an economist and a public policy analyst. He is a Professor of Finance at Stockton University. His op-ed columns appear in Townhall, Newsmax.

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