Incompetence and cruelty are expensive: Trump’s actions may bankrupt U.S. treasury

By Alexander Schorr

September 18, 2025 (Washington D.C.) -- President Donald Trump could render the US Treasury bankrupt. According to an op-ed by a businsess law educator published in  Newsweek, everything hinges upon whether or not the Supreme Court will side with Trump’s declared tariffs that critics have called illegal — a decision that could force the Treasury to repay half a trillion dollars to the companies that pad the import tariffs, which could set off a crescendo of failures throughout the economy at home and abroad.

Trump's alienation of U.S. allies, his inflationary policies and budget blil that sent the deficit skyrocketing are all further weakening the nation's economic stability.

In an interview, Republican Senator Mitch McConnell warned that there are too many similarities between the state of the country today and how it was back in the 1930s. He stated: “Those who were totally anxious to stay out of all of what was going on in Europe were called America First. Sound familiar? So, what do we have today? North Korea, China, Russia, Iran, and Iran’s proxies. They’re very different kinds of countries, but they have one thing in common. They hate us. So, when you talk about preparedness, we’re not prepared like we should be.”

McConnell's concerns are both in reference to economic and global stability, as he believes that the isolationist “America-First” policies of the Trump administration will allow opponents of the US to grow stronger. It was the economic policies that concerned him more, as he drew parallels between the use of tariffs today to when Republicans had previously utilized tariffs to halt the Great Depression, but ended up exacerbating it.

Economists have warned that the irregular and widespread use of tariffs could significantly slow US economic growth: in 2025, Trump’s imposed tariffs will increase federal tax revenue by $172.3 billion, or 0.57% of the US GDP, making the tariffs the largest tax hike since 1993. It is worth noting that Gregory Daco, the chief economist at EY Parthenon, argued that if a court ruling forced Trump to slash tariff rates, it would actually be stimulative, and not negative. The potential impact on US households has been estimated at an average of $2,400 per year.

The latest Trump tax cuts will add trillions to the national debt, which many economists believe could posit long-term risks to the economy and lead to higher borrowing costs. Trump's One Big Beautiful Bill will result in the highest deficit in the nation's history.

Unlike the 1930s, the Federal Reserve now has the tools and experience to potentially stabilize the economy and prevent a severe depression. The US economy in late 2024 showed signs of strength, including a decent GDP growth, which could potentially lend some resilience to potential economic shocks. That being said, political and economic uncertainty can lead to reduced business and consumer confidence, which can hurt investment and spending, and could contribute to a slowdown or even recessionary periods.

Ultimately, the peril is this: President Trump’s contested and mostly illegal tariffs have a temporary stay, and due to the appeals court, he may very well take up his grievances with the Supreme Court— an entity that has not shied away from protecting him in the past as well as boosting his ideological positions. Depending on this potential ruling, the Supreme Court could rule that Trump needs to stop implementing reactionary tariffs, or they will rule that he can in effect do as he pleases what tariffs, in spite of the fact that that power rests with Congress.

If the court rules that only Congress can impact tariffs, then Trump’s ability to use tariffs would be nullified, and the US government would immediately be responsible for repaying all of the tariffs that have been paid to the federal government— paid of course by the businesses in the US doing the importing. If it is not ruled on until next summer with an undoing of Trump’s tariffs, which would be over a year's worth of interest at 7%. The amount that would be owed to the companies would be $500 billion that the US Treasury would have to immediately repay.

The issue is that although the Treasury had $820 billion on hand at the end of 2024, the amount owed to undue any long-term pains by tariffs would profoundly strip the Treasury. Of course, if Trump is given permission by the Supreme Court to utilize tariffs as he sees fit without Congress, then the President could potentially bankrupt the nation.

The US dollar declines in value

The US bond market is suffering because America’s neighbors are losing interest in doing business with the US.Even with the all-too possibility of a mere Recession, the treasury and the American pocketbook is bleeding due to the current trade war and distrust amongst America’s typically closest allies.

Currently, the US Dollar has experienced a period of significant decline— according to the US Dollar Index (DXY), about 11% against other major currencies in the first half of 2025, marking its steepest decline in more than 50 years. This downturn ended a 15-year trend for the dollar that began in 2010. Despite a 3.2% recovery in July, some analysts predict further depreciation— potentially another 10% by the end of 2026.

There are many factors contributing to how this happened: unpredictable policies and statements by the president and his cabinet, especially regarding tariffs and threats to the Federal Reserve, have shaken consumer confidence in the US. The widespread imposition of tariffs announced in April is seen as the most potent factor, slowing economic growth and reducing expected investment returns. Expected convergence of US interest rates with those of other major economies leads to the weakening of the dollar as the interest rate advantage dwindles. Lower interest rates (which would ease monetary policy) generally weakens the dollar.

Some countries are actively pursuing alternatives to the dollar for trade and central bank reserves, potentially diminishing future long-term demand for American money and products. In addition to worries about rising inflation and negative pressures towards US government deficits and debts, investors overseas are forfeiting ownerships in the US Treasury Market, especially in the tech sector, marking a gradual decrease over the past 15 years.

The faithful are punished

Poorer rural areas of the country, particularly those labeled “red-states,” depend heavily on federal assistance, and stand to lose the most from spending cuts. Analysis from July of 2025 indicated that seven of the ten poorest states, which rely the most on federal food and healthcare assistance, which voted for Trump in the 2024 presidential election, will be hurt the most by the “One Big Beautiful Bill.”

For example, Republican Senator Lisa Murkowski raised concerns that hundreds of essential jobs in Alaska could be eliminated, damaging the state’s economy and its ability to manage environmental issues like wildfires. Additionally, Louisiana, one of the states with highest poverty and disease rates, was seriously impacted by legislation that cut Medicaid spending by nearly $1 trillion over a decade, with Mississippi and West Virginia also expected to be hit the hardest by these cuts.

In February of 2025, The New York Times reported that Trump’s efforts to freeze funding linked to climate change have disproportionately affected Republican-held states. The Inflation Reduction Act, which Trump’s allies oppose, has spurred hundreds of billions of dollars in low-carbon energy technology investments. It is also worth noting that a report in June indicates that 78% of the jobs created by these investments are in states that voted for Donald Trump in 2024. If tax credits are eliminated, more than 530,000 potential jobs in these states could be lost.

Needless to say, Trump’s prized “One Big Beautiful Bill” will end up hurting red states more than the people in the country that he and his political base campaigned against.

A broken campaign promise

Among his many campaign promises, Trump capitalized on the discomfort of the average American frustrated with the prices of food and basic necessities. He promised to lower grocery prices— a promise which was doomed to fail with tariffs, cruel immigration policy, and mass firings.

During Trump’s current term, grocery prices have seen an increase, with the overall cost of food at home increasing by 3% year-over-year. Data provided by the Bureau of Labor Statistics shows that the overall cost of food at home has risen by 0.2% to 0.4%almost every month since January, with the exception of a 0.1% decrease in April. In August, grocery prices rose 0.6%, the highest monthly jump in nearly three years: Year-over-year, food prices were up 2.9% in August of this year.

The US cattle herd is the smallest it has been since 1951, leading to historic highs in beef prices. Compounded by factors like droughts and the rising costs of maintaining herds, Beef and veal prices were up over 10% year-over-year in August 2025.

Additionally, despite a significant decline in prices earlier in the year, egg prices were up nearly 11% in August; this volatility was also linked to factors like bird flu outbreaks. Milk prices have been rising steadily as well— up 3% from a year ago, and influenced by lower domestic production and fewer imports.

Rising prices have been attributed to several factors:

• Tariffs: Economists and grocery chains point to President Trump’s tariffs on imported goods as a major contributor to higher grocery prices, with about 75% of the nation's food imports expected to be impacted by the most recent round of tariffs.

• Immigration Enforcement: Stricter enforcement of immigration policies may contribute to higher labor costs in the food and agricultural sectors. Without the labor force needed to do these jobs, there will be a loss of money and overall food distribution.

Economic issue voters

Many Trump voters did not understand what the policies under Donald Trump would entail.  The newest “Big Beautiful Bill” will ultimately slash and burn the lives of many who voted for and continue to support Donald Trump.

Take Steve Hicks, a Trump supporter from Tennessee, who for over 30 years worked at the Y12 National Security Complex, which enriches uranium for the US nuclear program. He must take dozens of medications to satiate two cancers and never damage linked to radiation exposure. He has also petitioned the Department of Health and Human Services (HHS) to pay the medical bills for him and thousands of Y12 workers affected with health issues due to their work.

The Energy Employees Occupational Illness Compensation Program Act, which was passed in 2000, entitles eligible workers at the US Department of Energy and Defense nuclear sites to a $150,000  sum payment and medical insurance, which is available to workers associated with cancers and high exposures to radiation like Steve Hicks. Unfortunately, due to the cuts by DOGE, President Trump’s promise to slash the size of government, HHS has indefinitely suspended the medical experts charged with reviewing and approving the claims of those workers like Hicks and thousands like him out of luck.

While some GOP voters remained lenient about tariffs in 2025, a Yahoo News/YouGov poll in April showed that most Americans, including a large percentage of Republicans, felt increased stress and financial anxiety over the rising cost of living— further worsened by tariffs.

A KFF poll in June found that while many MAGA supporters initially backed Trump’s “One Big Beautiful Bill,” their support dramatically dropped after learning that it would decrease funding for Medicaid and rural hospitals. Rural communities, many of which are heavily pro-Trump, stand to be disproportionately impacted by potential cuts and stricter eligibility requirements to Medicaid.

MAGA voters largely avoided criticizing President Trump’s role in inciting an attempted coup on January 6th in 2021, or convinced each other that President Trump’s 34 felony convictions were politically motivated. Most will likely look back longingly to the nation's progress and financial status between 2016 and 2020, before a raging COVID-19 pandemic caused social and political turmoil with incredible death and division, and before inflation exploded the cost of living. While the global pandemic—not Trump or Biden—initially caused inflation worldwide, while other nations are seeing inflation drop,  Trump’s tariffs, roundup of immigration workers and other policies have resulted in inflation and rising prices soaring since he regained office.

Hatred is a new priority, but cruelty carries a hefty price

Unnecessary and generational trauma has been inflicted upon the country under the Trump administration, which has closely followed the playbook laid out in Project 2025. 

Kilmar Abrego Garcia— a father of an American citizen and a husband of an American citizen, was arrested despite never being convicted of any crime. He was sent to a terrorist prison where he was routinely tortured; he was sent back to the US on a judge’s orders, reunited with his family and then detained again. The Department of Homeland Security has this time threatened to deport him to Uganda— it's an African country where they do not have Spanish speakers.

Thousands of others have been rounded up by Immigration and Customs Enforcement, including even some U.S. citizens improperly detained without cause for days on end.  Now the Miami Herald has issued a shocking report revealing that two-thirds of the immigrants detained at the infamous Alligator Alcatraz in a Florida swamp have simply disappeared—the Trump administration cannot or will not reveal their whereabouts. Our tax dollars are paying for these deeply disturbing detentions and disappearances.

 Millions of US tax dollars are being  spent in detaining and deporting individuals rather than investing money in Americans’ healthcare  and infrastructure  enhancement. Due to the deeply seeded racism and bigotry being leveled by the weaponization of ICE and the justice department, which is now stopping and detained people based on ethnicity and language spoken without even asking for IDs first, according to NPR.

On top of this, tens of thousands of federal employees are without their careers, lives of children overseas are being lost or at risk due to the dismantling of USAID, infrastructure and security are being destroyed by volatile weather such as the mass flooding in Texas, Over  $1 trillion in cuts to food and health care have been made, all while those in the working class are burdened with greater struggle to survive potential poverty, illness, and destitution.

Meanwhile trillions of dollars added to the nation’s debt due to tariffs and massive spending on immigration enforcement will be left up to the next generation to deal with.

The overall American household debt has surpassed $18 trillion, exceeding the combined debt of Latin America and the European Union. Average American wages have not kept pace with housing prices, which has led to increasing individual debt and dependency on the federal government.

The President's policies are draining the U.S. treasury

The President’s controversial deployment of the National Guard and military troops into American cities,has cost taxpayers many millions of dollars, with costs varying significantly on the scale, duration, and type of activation. Recently, expenses have ranged from $1-2 million per day, adding up to hundreds of millions of dollars over the course of a single large-scale deployment.

In Los Angeles, a deployment of thousands of National Guard members and hundreds of Marines to Los Angeles was estimated by the California Governor’s office to have cost nearly $120 million: this included $71 million for food and basic necessities, $37 million in payroll, $4 million for logistics and supplies, $3.5 million for travel, and $1.5 million for demobilization.

In Washington D.C., recent estimates place the cost of deploying troops at the nation’s capital at over $1.8 million per day. A National Priorities Project reported this figure, and another from Yahoo News Canada put the projected total for the D.C. deployment at $200 million. Recent estimates place the cost for deploying troops to the nation's capital at over $1.8 million per day. An analysis from the National Priorities Project reported this figure, and another from Yahoo News Canada put the projected total for the D.C. deployment at $200 million.

Next up, the President’s threat to deploy to Chicago could cost nearly $1.6 million per day, though an official number of troops has not been confirmed; the final cost would depend on the size of deployment and who pays for it. It is worth mentioning that a 2025 analysis by the nonpartisan National Priorities Project suggests that a deployment of 3,000 National Guard troops could cost taxpayers about $1.59 million per day.

The Trump administration has made it clear that it’s priority is those with money—particularly rich donors and corporations-- who benefitted from massive tax cuts and favors.  Meanwhile Trump’s actions have put a historic squeeze upon the poor and middle class — a tactic that economics have proven time again to be ineffective for driving economic activities.

Additionally, a recent analysis from the second quarter of 2025 estimated that President Trump’s golf trips have cost taxpayers more than $52 million so far. The travels for Trump and his staff often require the use of government aircraft, including Air Force One as well as the presidential motorcade. The Secret Service is required to provide protection, and taxpayers fund their salaries, overtime, and lodging. When the trips are to Trump-owned properties, taxpayers’ money directly benefits the Trump Organization.

Kindness is cheaper than cruelty

Simply clearing out homeless camps and arresting homeless people, as Trump says he wants to do in Washington D.C., actually does nothing to help the homeless or taxpayers, and the costs prove it out. Typically, the Republican solution to homelessness is possibly the worst financially. Nationwide on average, it costs $44,000 per year to keep an individual in prison: prisoners get healthcare and must be fed, and are guarded by many government employees.

Of course, when it comes to the homeless in America, simply incarcerating them or moving them out of sight from public spaces costs taxpayers on average $35,000 per year per person. Inevitably, those who are homeless will require emergency services or immediate healthcare. When the federal government works together with private developers to build sustainable and subsidized housing, the cost of taxpayers is only $12,000 a year per person.

Additionally, if a detained person happens to be an undocumented immigrant who is sent down to "Alligator Alcatraz, it will then cost taxpayers about $90,000 a year to maintain the incarceration per person, though it’s unknown how long those detainees remain there, since hundreds are now missing.  President Trump is even paying El Salvador $25,000  per person at the infamous CECOT prison out of your taxpayer dollars.

At this time, due to the cuts by DOGE, the firing and rehiring of key workers throughout the federal workforce, the tax exemptions to billionaires and corporations, the squeezing of the poor and middle class, and the campaigned promise of revenge under the Trump administration, the party lines of the current state of the Republican party is the monetization of cruelty. This administration would rather pay 3 to 10 times more to punish a homeless person for being homeless or an immigrant from having a better life in the US than to pay to house the homeless or provide a path to citizenship for undocumented immigrants, allowing them to pay income taxes and pay into the Social Security system.

In this vicious economic system, a certain percentage of the population needs help, or reasons that usually come down to factors like age, disabilities, mental health, and addiction. Reasonable and kind people who have advocated for grassroots change of the healthcare and economic system typically do not run as Republicans in today’s socio-economic environment, but today’s national leadership is neither kind nor from an economic standpoint, reasonable.

What a Wall Street Journal poll found

A  Wall Street Journal Poll of 15,000 Americans published on September 1, 2025 provides critical findings. According to those polled, 71% of Americans do not believe that they will share in the benefits of economic growth. 74% are concerned that wages will not be able to compete with inflation, and 74% are concerned with the cost of healthcare and prescriptions, with  78% believing that their children will not be “better off than we are.”

This survey found 69% of Americans believe that the “American Dream,” that is, “if you work you will get ahead,” no longer holds true, or never did.  The last time this survey was taken— which was a year ago— the last number of people who believed it was never true rose 6 points from 17 to 23%.

The Trump administration has done so poorly with the state of the economy, employment, and race relations, that in just under 8 months, it has broken the spirit of Americans to the point where they have redefined American history— and that 69% who believe the American Dream no longer exists is the worst response in nearly two decades of asking this question. Going back to even the 1980s, one can see that something has broken:  the belief that Americans have the ability to “get ahead” is now less than what it was in The Great Recession.

A direct repetition of a severe recession or depression is currently not predicted by economic experts. However, rising inequality, supply chain disruptions from lack of imports, extreme weather disasters, and societal dependence on fragile economic systems raise worries about a severe economic downturn. Moreover, if worse-case predictions of the U.S. Treasury being run into bankruptcy occur, the United States would be in uncharted and perilous economic waters.