Photograph by Nathaniel St. Clair

Last week the US Congress passed the Trump Tax Cuts. The mainstream media and economists have been mostly reporting the details of the cuts—i.e. which taxes got cut in the 2025 Act, how much accrued to businesses and wealthy as opposed to the rest of us, what’s the impact on GDP and maybe even government deficits and debt. All interesting facts. But not the most important. They purposely ignore the cuts in historical perspective and the bigger picture they represent.

That bigger picture is the looming fiscal crisis driven by the growing convergence of runaway tax cutting since 2001, chronic escalating defense and war spending, more frequent deeper crashes of the economy with slower economic growth between, and now since 2022 accelerating trillion dollar annual interest costs on the US national debt.

The US national debt is on track to reach $38 trillion by year end 2025. Interest payments to bondholders are already exceeding $1 trillion a year. The Congressional Budget Office, research arm of the US Congress, estimates the national debt will reach $56 trillion by 2034 with interest payments of $1.7 trillion—and all that before Trump’s just passed $5 trillion tax cuts.

Moreover, the US elite today show no sign of addressing the coming fiscal crash. It continues to cut taxes by $trillions on corporations, investors and wealthiest 1% households; to raise spending on the Pentagon, wars and other ‘defense’; to allow health insurance and big Pharma to gouge the US Treasury; and to pay holders of US securities—foreign and US—trillions of dollars more every year.

Multiple studies show that historically 60% of the US budget deficits and thus national debt are due to insufficient tax revenues—from chronic tax cutting, slow economic growth, legal avoidance and fraud. Here’s some interesting facts about cumulative tax cuts by both political parties together since 2001:

Cumulative Tax Cutting 2001-2025

George W. Bush’s tax cuts in 2001-03 amounted to $3.8 trillion over the decade 2001-10. Estimates are roughly 80% accrued to corporations, businesses, and wealthy individuals by focusing overwhelmingly on individual income tax rates, corporate capital gains and dividends, and the estate tax affecting the wealthiest 1% or less households. Bush then cut taxes in the spring of 2008 by another $180 billion as the economy began to slide into recession and the great crash of 2008-09.

When Obama took over in 2009 his American Rescue Plan stimulus for the economy passed that March provided for another $325 billion in tax cuts. His entire stimulus plan was $787 billion, another $280 billion of the remaining $487 billion went to the states which then hoarded most of it. So less than $200 billion went to stimulate consumption which immediately proved too little to reboot the US economy. He had to add another $25 billion for ‘cash for auto clunkers’ and another $25B for ‘first time home buyers’ later that year. Most of the latter, moreover, didn’t go to home buyers but to mortgage lenders as incentive to approve more mortgages.

When Bush’s tax cuts came up for renewal in 2010, Obama extended them for another two years through 2012. That amounted to another $803 billion in tax cuts, again mostly to wealthy and corporations.

In August 2011, in an agreement with the Republican Congress, Obama cut social program spending by $1.5 trillion in a new ‘austerity’ plan. $1 trillion was cut in just education and other social programs; $.5 trillion was supposed to be cut for defense spending but was kicked down the road and never applied. Austerity social program cuts always follow crisis bailouts. They did in 2011 after the 2009-10 bailouts. They’re occurring again today in 2025 after the 2020-21 Covid bailouts—more on which shortly.

The 2012 Obama tax cuts made the Bush tax cuts permanent. They cost another $5 trillion. They were supposed to avoid what the media, lobbyists, and propagandists called the pending ‘fiscal cliff’. They were supposed to boost the economy. They didn’t. US economic growth in GDP terms for the rest of the Obama term averaged only 60% of what was historically average during recovery periods from the earlier 10 US recessions since........

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