This will be brief, appropriate to the topic at hand. It consists of a quote from Milton Friedman, found in Joseph Salerno’s outstanding book, Money, Sound and Unsound, p. 356:

The United States is, once again, on the precipice of entering another war in the Middle East. After months of productive negotiations between the Trump administration and the Iranian government to reach a new nuclear deal, the talks were broken off by a series of Israeli airstrikes on June 13, last Friday.

Contrary to the fantasies of certain Republicans in Washington—including President Trump—the current trajectory of the White House’s fiscal policy is toward ever larger deficits and ever more federal debt. In its most recent analysis of the so-called “big beautiful bill” the CBO estimates that the bill will add 2.4 trillion to the deficit over ten years. That’s not $2.4 trillion total. That’s 2.4 trillion extra.

Allow me to remind you of a few uncomfortable truths.

Government spending is out of control in developed nations. Furthermore, no interventionist government wants to cut spending or balance the budget. Government spending empowers politicians, and reducing it means losing the grip on the economy.

Interventionist governments aren’t concerned about debts, deficits, or inflation. Inflation is a deliberate policy, and interventionist governments seek to nationalize the economy while imposing total control over productive sectors by issuing continuously devalued currencies.

Trump is now weighing sending in the US military. This presidency looks like an extension of George W. Bush’s. 

The Federal Reserve’s Federal Open Market Committee (FOMC) meets this week and is expected to keep its target policy interest rate (the federal funds rate) unchanged at 4.5 percent.

This is unlikely to please Donald Trump who has repeatedly pushed Fed Chairman Jerome Powell and the FOMC to adopt a lower target interest rate and further force down interest rates on federal debt. Moreover, Trump has signaled that he wants the US central bank to be more like the European Central Bank which has been more aggressively forcing down interest rates in recent months.

The Trump administration is spending more than the Biden administration, compared to the same period last year. This is no small feat, as the proxies that stood in for the senile and incontinent former president spent at an extravagant pace in their final year, even by federal government standards.

Fiscal year 2025 is virtually guaranteed to produce a deficit in excess of $2 trillion. The current year-to-date deficit stands at $1.05 trillion seven months in, with the April surplus now behind us.