The Real Addiction Isn’t to Cheap Goods — It’s to Other People’s Money

Taxpayers are paying the price for Washington's spending addiction

For all the nonsense we hear from populist politicians and billionaire podcast bros about Americans being “addicted to cheap goods,” they’re missing the real problem. Americans — or at least their representatives in Congress — are addicted to spending money that belongs to other people.

The latest example of this addiction is the “Big, Beautiful” reconciliation bill that House Republicans are rushing through, with full-throated support from Donald Trump. It’s a bill that doesn’t just ignore our overspending problem, and hence our debt crisis — it deepens it. It doesn’t cut government; it cements pandemic-era bloat, keeps many of Biden’s green tax credits, gives handouts to California and New York, and sprinkles in new goodies on top. And all of it is justified with the same tired delusion that budget deficits don’t matter.

Let’s be very clear: the problem is spending. It’s not tax revenue. It’s not China. It’s not billionaires. It’s not a lack of “unlocked federal assets.” It’s that Washington spends and spends and spends and spends money it doesn’t have.

The core of this “Big, Beautiful” package is the extension of the 2017 Trump tax cuts, which were scheduled to expire in 2025. Now, House Republicans — backed by Trump — want to extend them through 2034. The estimated revenue loss? $4 trillion or so over ten years.

Pro-growth tax reform is vital. But not all tax reductions are good, and certainly, tax reductions for some special interest groups (people who earn tips, or leaving in high tax states) are downright bad. In fact, this tax bill is that it is much worse than the 2017 tax bill.

In addition, cutting taxes while leaving decadent government spending to grow is nothing to brag about. According to the Economic Policy Innovation Center, here is what this bill does with Medicaid:

The bill keeps the bloated post-COVID budget baseline and offers only modest, slow-rolling trims to a handful of programs like SNAP and Medicaid. The so-called “spending cuts” total around $1.5 trillion over a decade, barely a third of the lost revenue from the tax cuts.

The rest of the bill is filled with unserious gimmicks: eliminating taxes on tips and overtime (a populist handout that invites fraud and complexity), raising the SALT deduction cap, and boosting the child tax credit. All sold with a straight face as if these are budget-neutral.

While Congress continues to behave as if we live in the low-interest-rate world of 2016, the bond market is waking up to reality. Interest payments on the national debt are now approaching $1 trillion per year, and almost doubling over the decade.

This is what a debt spiral looks like: higher budget deficits mean more borrowing, which pushes up interest rates, which increases the cost of debt service, which further increases the budget deficits. And repeat.

We’re now adding $2.5 trillion in new debt every year — and that’s under optimistic assumptions. The Congressional Budget Office projects that by 2034 interest alone will be our single largest federal expenditure. And yet Congress is marching ahead as if nothing has changed.

Trump, meanwhile, is focused on “getting the deal.” That’s always been his brand: deal-making, not governing. He wants to extend his tax cuts, deliver some populist goodies to swing-state voters, and call it a win. I doubt history will judge it this way.

This isn’t just a Republican problem. Democrats pioneered the “spend now, ignore the debt” playbook years ago, most recently with the American Rescue Plan, which poured $1.9 trillion into an already overheated economy. But the tragedy here is that Republicans used to know better.

There was once a serious wing of the GOP — think former Rep. Paul Ryan (R-WI) and former Sen. Phil Gramm (R-TX) — that cared about limiting government. They even supported reforming entitlements and put on their wonk hats to propose ways to go about it. I even remember when some Democrats – the blue-dog Democrats, as they were called – cared about fiscal responsibility.

To be fair, Congress still has a few legislators who care about our fiscal situation. Rep. Chip Roy (R-TX) and Senators Rand Paul (R-KY) and Ron Johnson (R-WI) to cite a few. They are demanding deeper cuts to bring us back to pre-COVID spending levels, which is exactly what any serious reform requires. Paul and a Roy have blasted the weak Medicaid work requirements and SNAP cuts as cosmetic at best.

But the fiscally responsible wing of the Republican party has been steamrolled by the Trump-era GOP, which now combines massive tax cuts with massive spending increases and pretends the math will miraculously work itself out.

Unfortunately, this bill is what happens when everyone wants to get reelected and too few politicians want to make hard choices. Congress won’t touch Medicare, Social Security, or Medicaid in any meaningful way, even though these programs are the drivers of our long-term debt. Instead, they nibble around the edges of discretionary spending, toss in some gimmicks, and go home to campaign on what they “delivered.”

But a government that promises everything to everyone, all the time, without limits, is not compassionate. It’s lying. And the lie is catching up with us.

You can’t run enormous budget deficits forever. You can’t let entitlements grow without reform. You can’t keep interest rates near 5% and still add trillions in new debt each year without consequences.

Americans aren’t addicted to cheap goods. But their political representatives in Washington are addicted to expanding programs that they think someone else will pay for — whether it’s billionaires, corporations, China, or the Federal Reserve. But the reality is that we all pay. We pay through inflation. We pay through stagnation. We’ll pay through painful austerity when the reckoning comes.

This bill is not a solution. It’s a symptom. A symptom of a broken political class that refuses to tell the truth or make hard decisions. It’s a symptom of a country that thinks debt doesn’t matter — until it does. Eventually the fantasy will collapse. We either confront the crisis now, or we’ll be crushed by it later.