July 14, 2025

Hi everyone, my name is Taylor St. Germain with ITR Economics and thanks for joining me on this episode of TrendsTalk. We at ITR are your apolitical and unbiased source of economic intelligence and today that apolitical part means a lot because I wanted to just highlight the One Big Beautiful Bill Act that was signed into law by President Trump on July 4th.

I’m not going to dig too much into the weeds of this bill. You all have the capability of googling the bill and looking at what’s in it. I really wanted to talk about this bill in the context of how we think about our 2030 depression scenario. Now I will highlight a few things in the bill. We did see the extension of the 2017 Tax Cuts and Job Act, new deductions for tips and overtime, child tax credit raises, there were major cuts too to Medicaid and SNAP, defunding some of the clean energy initiatives, the last administration.

But again, you can all read into those things and our team will be highlighting what this means for the near term of the economy. We’re going to have some blogs, some articles in our Trends Report and even more importantly, our upcoming webinar with Lauren Saidel-Baker, one of our economists and Brian, our chief economist, they’ll be digging more into this in their upcoming webinar. You can find more information about that on our website. So again, they’re going to dive into some of the more nuances of this bill.

I wanted to talk about the bill in terms of 2030, because one of the key factors that came from this bill is the Congressional Budget Office estimating that the bill is going to add between 2.4 and 2.8 trillion to the federal debt by 2034. And there’s other sources that are even saying that number could be higher, closer to 3.3 or 4.5 trillion. It’s neither here or there for me. We can argue about how much it’s going to add. The key point is going to add a lot to our federal debt.

I’ll remind you all that one of the key perspectives as it relates to 2030 is that we are going to see a downturn in 2030, what we’re calling a depression, and one of the five factors of that is national debt. We were already concerned about national debt before this bill was signed into law, and this just adds to our concerns. Now, I’ll remind you that 2030, there are really five factors that drive our thoughts around this depression happening in 2030. It’s the demographics, it’s healthcare, social security costs, it’s inflation, and finally, it’s national debt. And it’s really those last two factors that I wanted to just mull over here as it relates to 2030, which is inflation and the national debt.

Government spending drives higher inflation. We have a number of different charts, analyses that highlight that spending drives inflation. And with higher inflation forecasted for the second half of this decade, that’s going to drive up interest rates, interest payments on our federal debt. That is a key factor that goes into that 2030 downturn. And despite all of Elon Musk’s efforts in the Department of Government Efficiency in the first quarter of this year with a number of cuts that they made, now we pass through this One Big Beautiful Bill, and we’re talking about numbers in the trillions added to our federal debt.

One of the questions I got a lot in the first quarter of this year is, “Do the cuts from Elon Musk and the government change our mind on 2030 happening?” And the answer to that was no. I remember asking Brian Beaulieu, our Chief Economist about that. I said, “Hey, Elon Musk is coming in and he’s making cuts. That should be enough to help 2030, right?” And he sort of chuckled at me and said, “That’s not going to be enough. And not to mention, I’m very sure the government continues to spend like they always do.” And of course, Brian’s been doing this for more than 30 years and he couldn’t have been more right. Now we see this bill being passed through that’s going to dramatically increase the federal debt.

So really what this is doing is unfortunately giving us more confidence as it relates to 2030 being a big major downturn. And now again, we don’t need to make this political folks, whether it’s Democrats or Republicans, our politicians are very good at spending money. And while there could be some stimulating aspects to this in the near term, which again, Brian, Lauren, and many members of our team will be covering in blogs and webinars coming up, there is major repercussions down the road. We always call this the unintended consequence from the government intervening in markets and the way that they do. And spending is something that we’re very concerned about. We’re already concerned about. And now this is giving us more fuel to that fire.

Now, again, I don’t want to downplay what the next five years looks like. We have five years of very attractive economic growth still forecasted here in the US economy, but some of these unintended consequences are going to come to the forefront by 2030. We just look at the numbers and the numbers tell us, boy, we still need to be concerned about that 2030 timeframe.

Like I said, we’re going to have more coming as we dig more and more into the weeds of this bill, but I wanted to cover it as we think from a business standpoint of planning for the next 10 years. There’s more to come here. I hope you found this helpful. Let’s take advantage of these next five years. There’s still some good ones ahead of us.

Look forward to sharing more with you about the one big, beautiful bill and other decisions that are made in the government in the future of TrendsTalks. But for now, please like and subscribe to TrendsTalk wherever you listen to your podcasts. And I look forward to seeing you all in the next one. Thanks so much and take care for now.