The Big, Beautiful Bill: The US’s Ticking Time Bomb

Editor’s Note:As the Big Beautiful Bill scrapes through the Senate, Chinese strategist Prof. Wang Xiangsui warns it may offer short-term relief at the cost of long-term ruin. From deep cuts to social welfare to a ballooning national debt, this legislation reveals not just Trump’s shortsightedness—but a deeper dysfunction at the heart of U.S. politics.

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On July 1, after a relentless 24-hour marathon, the Big Beautiful Bill scraped through the Senate by JD Vance’s single vote. Regarding this, Professor Wang Xiangsui, the Deputy Secretary-General of the CITIC Foundation for the Study of Reforms and Development, pointed out that two key agendas within the Act will cause irreversible damage to the foundations of the US economy, reflecting the catastrophic shortsightedness of Trump. Yet Western media often sidestep the broader truth: this myopic approach isn’t unique to Trump’s administration. Trump simply pressed harder on the accelerator of a political system already hurtling toward disaster.

The first major shortcoming is the cuts to public welfare spending. Superficially, this appears to save the US money, but in reality, it will only worsen the US economic situation.

According to estimates by the Congressional Budget Office (CBO), the Act will result in 11.8 million people losing health insurance. Furthermore, the Act also cuts the Supplemental Nutrition Assistance Program (SNAP), the largest federal anti-poverty program in the US, designed to provide food assistance to low- and no-income individuals. With an annual budget of approximately $50 billion, SNAP helps 42 million Americans sustain themselves.

The Big Beautiful Bill plans to cut roughly $186 billion in food assistance spending over the next nine years, theoretically saving about $20.6 billion annually. However, this is merely shifting the burden to the local councils: the federal government “saves” money by reducing its share of SNAP funding from 50% to 25%, but this 25% “saving” will be shouldered by individual states. A report by the Food Research & Action Center (FRAC) indicates this will erode local tax bases, particularly in rural and economically distressed communities. As the purchasing power of SNAP recipients declines, demand for agricultural products will significantly decrease, leading to an estimated $24 billion in losses for US farmers over the next decade.

Professor Robert Manduca, a sociology professor at the University of Michigan, estimates this will cause an annual loss of approximately $120 billion to state finances across the US. The Tax Foundation, a tax policy think tank, also notes that if all states strictly adhered to the Big Beautiful Bill, it would lead to a 4.2% reduction in state income tax revenue.

The second major shortcoming is raising the debt ceiling by another $5 trillion, pushing the US national debt beyond $40 trillion. While this delays the immediate outbreak of a debt crisis in the short term, it will inevitably make the future crisis far more severe.

Ray Dalio, founder of Bridgewater Associates, stated in TIME magazine that as a result, the US national debt – currently standing at 6 times annual government revenues, 100% of GDP, or roughly $230,000 per American family – is projected to balloon over the next decade to 7.5 times revenues, 130% of GDP, and approximately $425,000 per family. This surge will dramatically escalate the cost of servicing the debt.

In fact, following the Federal Reserve’s consecutive interest rate hikes in 2022 and 2023 to curb inflation, the US government’s interest costs have already surged dramatically. Annual interest payments now even exceed defense spending, reaching a staggering $882 billion.

Such unsustainable obligations will force the government into a perilous choice: enact drastic spending cuts, impose unthinkable tax hikes, or resort to massive money printing – a path that would devalue the currency and push Treasury yields to levels investors find deeply unattractive. This would be a disaster globally because the US Treasury market is the bedrock of all capital markets, and capital markets are the pillar of the US economy and social stability. Unless this trend is quickly reversed, bringing the budget deficit down from 7% to 3% of GDP, the “big, painful disruptions” are highly likely.

Professor Wang Xiangsui pointed out that Trump’s “deficit budgeting,” which relies on mortgaging the future to alleviate present crises, is essentially a selfish “après moi, le déluge” (after me, the flood) approach. It’s a gamble betting that the collapse won’t happen during his term.

This shortsightedness is catastrophic for the US economy. However, this shortsightedness cannot be solely blamed on Trump personally; it is an inevitable disaster inherent in the US political system, essentially amplifying a bad habit common to all US Presidents. Successive US Presidents have almost universally increased fiscal deficits to fulfil campaign promises, while neglecting the problem of how to manage these deficits, often choosing to leave the mess for their successors. In the past, this “mortgaging the future” system could persist because the US federal government enjoyed relative political credibility and absolute military dominance. Trump’s problem, however, is that he is simultaneously causing the US economy to lose both of these crucial underpinnings.

In terms of credibility: In the tariff wars Trump previously instigated, he practised rampant unilateralism and blatant reneging on deals during negotiations with other countries. Far from reducing the US trade deficit, this greatly depleted America’s international political credibility. Within the Big Beautiful Bill itself, while slashing significant social welfare, it also substantially increases defense spending, with an absolute portion funding personal pet projects like the “Gold Dome System.” Ray Dalio estimates the Act will lead to spending of about $7 trillion a year, with inflows of about $5 trillion a year. The businessman President who promised to fix US finances before taking office has instead made America lose more money, undoubtedly further depleting his domestic credibility.

Credibility is the foundation of a nation, even for a hegemonic power like the US. While no one can pinpoint exactly when the tipping point from Trump’s credibility depletion will be reached, everyone can be certain that this erosion of national credit is irreversible. For global investors, the status of US Treasuries as a risk-off asset is now facing unprecedented doubts. Future US debt issuances will have to offer significantly higher interest rates to persuade global investors – an absolute disaster for America’s future.

In terms of military power: In the past, the US could pressure major economies like the Soviet Union militarily, create prolonged chaos in regions to control the flow of international capital, or even force developed nations like Japan to pay for its spilling-over debt crises. Now, however, Trump’s series of military interventions in the Middle East has shown the world the decline of US military potency.

Take the US strike on Iranian nuclear facilities as an example. On one hand, the long-range mission of the B-2 bombers reflected continued US technological superiority. On the other hand, with the strike’s effectiveness debated and its objectives highly questionable, Trump immediately declared there would be no further strikes, tacitly allowed Iranian retaliation against US overseas bases, and pressured the Israeli ally to quickly cease fire and negotiate. This demonstrates that the US no longer dares to engage in prolonged military confrontation with a mid-sized regional power.

In fact, even in response to attacks by Houthi rebels on U.S. merchant vessels and warships, the American military has limited itself to symbolic airstrikes, reluctant to commit ground forces to neutralise threats at this strategic chokepoint. It signals a shift: a military once unflinching in flexing its power now hesitates even when confronting weaker adversaries. Rather than a steady constant of global order, the U.S. military is becoming a ‘volatile variable,’ a short-term disruptor in the international economy.

In conclusion, while the Big Beautiful Bill may be unprecedented in exacerbating the US fiscal crisis and deepening the divide between federal and state governments, within the ecosystem of US politics, it is hardly an “oddity.”

In a system where performance is judged only within a single or two terms and where the two major parties can perpetually shift blame, the game of “passing the buck” by mortgaging the future is a trap all politicians are destined to fall into. We may well witness even “bigger and more beautiful” bills emerge in the future. All voters who disdain this game should realize that only a government where the continuity of policy transcends individual will and must unequivocally stand the test of history truly possesses the capability and resolve to secure long-term well-being and a stable future for its people.