Even bigger budget deficits are now in store due to the first $1 trillion defense budget. 
February 19 – 8% Cut
On February 19, 2025, the Military Times reported White House Eyes 8% Cut to Defense Budget to Boost Trump Priorities
Defense Secretary Pete Hegseth ordered senior military officials to develop a budget plan that would slash defense spending by 8%, a dramatic cut which could reshape military end-strength and readiness for decades.
Hegseth ordered the proposed cuts to be compiled by Feb. 24. Seventeen categories would be exempt from the budget reductions, including military operations at the southern U.S. border, nuclear weapons and missile defense programs, and acquisition of certain drones and munitions.
The idea of steep defense cuts, originally reported by Bloomberg last week, is certain to draw opposition from lawmakers on Capitol Hill, where Republicans in recent weeks had been discussing major increases in defense spending in upcoming years – not significant cuts.
But Hegseth’s budget plans appear to follow broader instructions from President Donald Trump to reduce government spending, including the dismissal of thousands of federal workers in the last few weeks.
April 8 – 12% Rise
On April 8 we learned Trump Promises $1 trillion in Defense Spending
President Donald Trump this week unveiled plans for a $1 trillion defense budget next year, a massive increase that he claimed will provide the country with unmatched military strength for years to come.
During a press event with Israeli Prime Minister Benjamin Netanyahu on Monday, Trump offered the outline for total defense spending in the fiscal 2026 budget as part of his larger plans for U.S. national security.
“We’re going to be approving a budget, and I’m proud to say, actually, the biggest one we’ve ever done for the military,” he said. “$1 trillion. Nobody has seen anything like it.
“We are getting a very, very powerful military. We have things under order now.”
A $1 trillion defense budget would represent an increase of nearly 12% from current fiscal year spending levels. Trump indicated that at least some of the new spending would come from savings found by cuts ordered by the Department of Government Efficiency, although he did not specify any accounts.
An 8% Cut is Now a 12% Gain
Best of all, many of the same people who were cheering the cut are now cheering the gain.
This makes perfect sense since “nobody has seen anything like it.” Who wouldn’t want that?
And Hegseth who ordered the cuts, praised the news on social media Monday evening.
Ordering Weapons but No Budget
Trump said the extra money for defense will allow the country to purchase new equipment and capabilities needed for the future.
“We’ve never had the kind of aircraft, the kind of missiles, anything that we have ordered,” he said. “And it’s in many ways too bad that we have to do it because, hopefully, we’re not going to have to use it.”
This makes sense given there is no need for Congress to approve budgets despite what the Constitution says.
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February 10, 2025: Federal Deficit Is Up $306 Billion Compared to Same Period Last Year
The US deficit for the first four months of fiscal Year 2025 is $838 billion, up $306 billion. Adjusted, the increase is more like $157 billion to $225 billion.
US Debt Will Grow to a Staggering 156 Percent of GDP by 2055
On March 27, 2025, I noted US Debt Will Grow to a Staggering 156 Percent of GDP by 2055
If Congress extends the TCJA tax cuts with no offsetting savings, the deficits will surge.
Please consider the Peterson Foundation Statement on CBO Long-Term Budget Outlook
“Over the next 30 years, debt will grow to a staggering 156% of GDP. Annual interest costs will exceed $1 trillion next year, and total a stunning $76 trillion over the next three decades. This report also shows that the depletion of Social Security’s retirement fund is just 8 years away, which would result in immediate, automatic cuts for all beneficiaries.
“As bad as this outlook is, it represents an ‘optimistic’ scenario, because policymakers are currently considering adding trillions more in tax cut extensions, which would only add to these levels of debt.
‘Optimistic’ Scenario
The Peterson Foundation correctly notes the snake oil and the optimistic nature of that snake oil.
Trump also wants no tax on tips, no tax on Social Security, more military spending, restoration of state-and-local tax (SALT) dedications, and a new iron dome defense shield. He recently proposed interest deductions for made-in-America autos.
Not a bit of that is factored into the CBO projections.
The “optimistic” scenario just got dramatically worse.
Whenever I see some foreign potentate, like Netanyahu, visit. I know it’s not a social visit but a begging mission for more taxpayer dollars. War criminals, dictators, con artists, they all want one thing.
Why not use the standard way that many government expenditures are framed around, which is a 10 year timeline.
In that case, we are talking about an expenditure of $10 TRILLION over 10 years!
Does that boggle anyones mind?
Trump owns this problem with over-spending on useless defense items while our economy falters and Americans are seeing 7% mortgages again.
In all seriousness, trump could not manage a Casino, (he went bankrupt) what makes anyone think he can manage the U.S. economy?
Trump is incapable of managing anything but a lot of people like his daily schtick.
I found Biden more entertaining. You can never surpass a senile politico in amusement value.
It isn’t really even a defense budget. It is an Empire military budget. At one time Rome had one of those. “Hadrian’s Wall is a former defensive fortification of the Roman province of Britannia, begun in AD 122 in the reign of the Emperor Hadrian.” 73 miles long, troops were required in order to defend it. The U.S. Empire is far bigger than the one the Roman’s had.
So from my uniquely weird perspective after living in the UK through Brexit, being in India during Modi’s demonetization, and living in Brazil when the real tanked during the Bolsonaro administration, I can confidentally say that Americans do not and can not understand how bad this is going to be. https://skywriter.blue/pages/ryanhatesthis.bsky.social/post/3lmezyvr7nw2q
ZH: “There was a clear message emanating from Western policy makers over the weekend: the world is facing the end of the era of globalization.”
An inflection point is occurring. Who among us remembers the Great Depression? I only know WW2 through books and film. We’re in the midst of the biggest financial bubble the world has ever seen. It is difficult to wrap one’s head around that.
Hmmm. Have you given thought that YOU might be the root cause of the problems each of these countries you lived in have had?
Did you ever get the feeling that Trump doesn’t know what he’s doing?
I have no idea what Trumps endgame is, assuming he has one, but Izabella Kaminska (along with Pilkington) have been arguing for some time (behind paywall in the case of Kaminska), that Trump and a number of his fellow travellers have in fact been consistently flagging up their view on this for some time and that what we are seeing is his attempt to force what he sees as an unholy alliance of Wall Street and Beijing (and others) to manipulate the world trade system unfairly, as seen by the enormous trade gap. In his 2015 book (Kaminska has been twittering quotes from it) Trump set out quite clearly his view that the US should openly trade with China with minimal tariffs, but only after China stops what he considers to be unfair practices. Kaminska seems to think that the ultimate aim is to force a revaluation of world currencies to eliminate deficit/surpluses worldwide and reducing the worlds dependence on the dollar.
Just a point on trade and pharmaceuticals. It is true that the US is very dependent on Chinese base chemicals and some finished products, but the reverse is also true, arguably more so. China actually imports 45billion dollars worth of pharmaceutical products, mostly from the US and Europe (the latter to a large degree from US companies. The US imports c.12 billion dollars worth from China. The imbalance is even greater for medical devices. So the damage would be two way. You’d have to go into a deep dive into the granularity of the figures and understand a lot of biochemistry to know for sure who is the big loser in a war over Pharm supplies, but I don’t think the answer is straightforward.
As for trade as a whole, China is far more dependent on trade with the US than the 3% figure implies – trade does not clear bilaterally in todays world. Much of China’s other surplus is components which ultimately ends up in the homes of US consumers. The Chinese economy now is almost uniquely dependent on exports due to its domestic deflation. In trade wars, surplus countries almost invariably are more vulnerable than those in deficit. And there is already widespread discomfort among many Asian countries at how China is aggressively eating into their markets – they are also very dependent on the US as a consumer and are not inclined to help China eat up their existing or developing markets.
Kaminska thinks this will all clear up surprisingly quickly, one way or another (I’m not sure I follow her argument why, but its based on game theory). Pilkington thinks that China’s quick response means that Trump has essentially called their bluff – if China was genuinely as unconcerned as they have said in the past, they would have focused on the long game, rather than try to up the ante.
One would almost think that Trump has been reading Sun Tzu:
“Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”
Or as Sun Tzu would also have said:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
It seems to me that people are making assumptions about Trump rather than taking what he’s been saying for years seriously. He actually is a free trader if you take his writing seriously – he is just somewhat obsessed with the idea that the US trade deficit is the result of unfair domestic policy in China, Japan and Germany, among others.
I have no idea of Kaminskas and/or Pilkingtons arguments are correct, but I do think they deserve serious consideration rather than just hopping on the ‘Trump is a moron’ bandwagon.
Trump read? I suppose if…The Art of War was a coloring book.
You mean he blindly follows the Net and Yahoos?
No. never.
He instils the sort of confidence in me that Hitler installed in his generals before overturning the Ribbentrop pact and embarking on his quest for Stalingrad.
Greg, do let me know how it pans out in 18 months or so.
It still amazes me that a nation of less than 10 million people controls the foreign policy of a nation of more than 330 million people. Trump is bought and paid for, just like the rest.
Might we simply reduce this all to one realization: Trump (CO) is not big on details, planning, impacts, and budgeting with real numbers.
NK was right, “dotard”
Appears the deficits will likely INCREASE rather than decrease. What a surprise?
Demorat or Republowcon…makes no difference who wins the (s)election…the MIC and Israel always win…no matter who is elected…MIGA
“No matter who you vote for, you always get John McCain.” (Tom Woods)
That’s a big number because of the maintenance of hundreds of bases all over the world which achieve no military goal, on the contrary, they are sitting ducks to any peer military force. Heck, even the Houthis are keeping the USN at bay and it frequently has to scuttle to provide its ships with missiles. The US spend several times more than Russia in their military, yet the whole of NATO can only make a third as many shells. The US military is a bloated paper tiger.
5.2 million vets are on VA disability. That’s not sustainable.
Tax the billionaires. The vets fought to keep the billionaires financial interests safe. Of course the soldiers weren’t really told that. But, reality wise…the billionaires owe the vets.
Not always. The heir to the Walmart fortune was a SOG medic in ‘Nam. Some people pay their fair share. Politicians are less likely to contribute anything, at least my generations pols.
Can we finally please stop with the idea that the Republicans are the party of fiscal responsibility?
Didn’t we stop with that a few decades ago?
Every time they show up in leadership, they crash the economy. Over and over and over…
He’s already responsible for more than 25% of the national debt, why not go for 50%?
Yep
I haven’t commented in a while, but there goes my $5000 DOGE dividend check.
Trump is officially the BAIT AND SWITCH president.
Promise spending cuts, deliver spending increases
Promise peace, deliver war.
Promise constitutional order, deliver unconstitutional chaos.
Promise prosperity, deliver economic disaster.
BAIT AND SWITCH
As the saying goes, the shame is on you when you’re fooled a second time by the same shyster.
True, but given the alternative, didn’t have much choice.
There were plenty of alternatives in the primaries and in other parties. You just refused to consider them, as did the vast majority of Usonians. Anyone wonders why the elections are even valid when more than half of the registered voters stay at home rather than casting a vote for grotesque candidates?
Actually Harris was a self made woman with a broad awareness of the justice system and its checks and balances. She did not have a daddy with bags of money and a giant ego. She was prepared to take the world stage responsibly. The rhetoric against her was foolish and incorrect.
In any case I (a Regan Republican) voted for her and would again.
Then again, I am self made and have enjoyed living in the greatest nation on earth when it was great. Now under trump? This is embarrassing!
.
Harris was an airhead. Just listen to her word salads.
Two days before the Russian invasion of Ukraine, Harris said that Ukraine should join NATO. That was an irresponsible comment.
HER word salads. Omg are you for real?
Look at the Taliban’s budget. That’s all you really need to spend to defend your country and win a war even against a superpower.
There’s ALWAYS the choice to not vote.
Andrew Jackson had a parrot so foul mouthed that he was kicked out of Jackson’s funeral. That parrot was interesting. A lot of the parroted talking points in the thread are completely uninteresting. Even dull I might say. Here’s a question. What happens to China if unemployment starts to rise dramatically?
Exactly where too those rare earths come from that are so critical in defense production?
Trump promised the wars in Israel and Ukraine would end on “Day One”. His defense team discusses classified battle strategy and actions in a public forum.
Zero trust in trump and his henchmen.
Reality,
Trump promised business leaders, farmers and all Americans relief from government interference. Instead he is now forcing business to:
All of this while our allies are being turned into enemies and our customers and brands are being vilified on the global stage.
Whose side is trump on?
.
Dang it! The magic wand with unicorns and pots of gold didn’t work? Go figure. The present situation before tariffs, unsustainable. There is no magic wand to fix it. Tariffs are a reset tactic. Hot wars are also reset tactics. No thanks to a hot war.
The situation after the tariffs is unsustainable too.
Good news we will have state of the art weapons but nobody will know how to use them as all the people will be gone. No worries, we have AI to take over. But as a footnote – it is even scarier that the current crew running our country will be deciding what those state of the art systems are
Possibly someone looked at the military sealift condition and realized 10 tankers is not enough.
I’m referring to the Stena Immaculate of course.
Then there was the tanker that went aground, the USNS Big Horn. That was the only one in the Indian Ocean. The carriers are nuclear powered, but the destroyers around it are not.
Maybe Trump and his flunkies have figured out that now the US military has to buy all the arms previously ordered but now cancelled by our allies; and Ukraine doesn’t need arms anymore since it will be delivered to Putin as down payment for a future Washington-Moscow alliance.
Actually, the alliance is between trump media and Russia. only trump is winning on these deals. All of America will pay for trumps failures.
I’ll put you down as in favor of a Moscow-Bejing alliance. Imagine if Xi had sent Putin a million man army to help take over Ukraine, in a mutual pact agreement. China can field a bigger army than any other country. American consumers helped make that possible.
Voting in the US reminds me of those poor people at the top of the World Trade Center on 9/11 faced with being burned alive or jumping. Not really much of a choice.
The last thing we need to do is give the toddler in the white house more machine guns! Or, more of our hard earned money.
HIs personal paranoia is that everyone is his enemy. The way he negotiates, every patriotic American and every business leader and every nation is becoming his enemy.
What on earth did trumps mommy do to him to turn him into such a belligerent narcissist?
Trump should be removed for gross incapacity and sedition.
Enough is enough of this bully on the playground.
He’s shown the world he doesn’t abide by agreements. You simply cannot negotiate with that, the only alternative is coercion. He’s got a weak hand now, but doesn’t understand the game.
War criminal Netanyahu is his only friend..
Thank God Mish is not in charge of threat assessments as his memory is rather short.
Seems not to long ago China made a major Naval encirclement of Taiwan.
but ah that has no impact on military threat in Mish world.
Xi might have chosen a different course of action but he choose a military exhibition.
Xi might have chosen a different response to Tariff increases such as saying thanks for all the past purchases made by USA which Built up China but nope China is entitled to full access to US markets and closing their own.
But yep Trumpman bad.
Mental cases just keep waving that white flag of surrender.
You seem to be forgetting that trump wants to build chip factories here and let China have Taiwan. Yup, trumpchild bad.
He wants to build chip factories here because it is in National interest to do so.
Chip factories in Taiwan are designed to self destruct should China make landfall in Taiwan.
Do you have a large blowup unicorn doll on your mantle at home where you pledge fidelity to childhood?
Do you realize that, but for a dozen or so countries, almost two hundred countries consider Taiwan a province of China’s, including the US?
Yes I do it has been one China two systems for quite some time.
That Taiwan wants no part of CCP, CCP being a political party, is evident in relations between Taiwan and mainland.
Or are you claiming that China is CCP and CCP is China?
World went thru that once before in a different landmass known as Europe, it was called WW2
The major party in Taiwan has been in favor of accommodating and reuniting with China eventually since WWII. It’s the current party in power, aided and abetted and financed by the US, that’s against reunification.
Do you think the U.S. can perpetually prevent China from regaining control of its own island province?
I expect at some point Taiwan will rejoin mainland China Politically.
I do not believe the current setup of CCP in mainland will ever be acceptable to Taiwan people.
Keep in mind how Formosa/Taiwan became refuge for
Chiang Kai-shek and Republic of China.
It will take a major generational shift such as what is occurring in Cuba as the old guard dies away.
Incredible shit show. Trump is working hard to liquidate America.This level of incompetence hasn’t been seen since Nero.
Thumbs up because wasting $1T on “defense” is stupid and wrong. I’d change it to “we haven’t this level of incompetence since Biden”.
Biden was better than this on his strokiest day
A stock market correction is not existential. Tariffs can be undone. Having Americans shoot missiles into Russia from the Ukraine was/is insanely provocative.
It’s Caligula, not Nero.
It’s a tough call.
Little Boots was mostly fine until he contracted some kind of disease that made him insane
Nero otoh, was a moron and a disaster right from the start
The greening of America, but its only money … major decline in purchasing power of the dollar in the next few years …
All this without factoring in the billions and billions worth of defense purchases from the EU that have been cancelled over the last few weeks.
I hadn’t heard that, but if true, it’s the Europeons finally doing something smart. They should not follow Trump’s command to waste 5% of their GDP on defending themselves against an imaginary Russian invasion.
Imaginary? Not how it feels in the Ukraine. Or how it is perceived in Estonia or Finland. FFS man , live up to your name or change it. It implies perceptiveness and awareness. These attributes are not discernible from your musings. FYI.
Like the 12 CIA bases in eastern Ukraine (according to the NYT) were not a provocation? Baltic politicians should cease musing about breaking up the Russian Federation. They should also not prohibit the Russian language. The US doesn’t ban people speaking Spanish. It was your nation that traveled far to fight with the Turks against the Russians in the Crimean War. Russia has never attacked Britain. The Finlanders enjoyed peace for decades. Now they’ve fallen prey to western propaganda and stupidly allowed American nukes on their soil. They think that makes them safer? It makes them targets if Russia thinks they’re under attack from the West. I love how Europeons think America would nuke Russia in the aftermath of an extremely unlikely Russian first strike against Europe. Would not happen. We’d say “too bad about Europe. I guess we’ll vacation in Mexico”. You think you’re under some sort of American defense umbrella. Dude …
No, sir, long given up on support from the USA.
Russian bringing chemical weapons to the UK twice to assassinate renegade agents is an attack on Britain.
We need to cut the umbilical chord to the USA post haste.
I just hope we cancel the F35 order and fly Mig destroying Typhoons.
“Russian bringing chemical weapons to the UK twice to assassinate renegade agents is an attack on Britain”.
It actually isn’t, and it pales compared to MI6 attacks against Russia, but I’m glad you have an accurate understanding of the trustworthiness of America. We don’t have allies. We have vassals which we use as tools.
He is not perceptive or aware. You are correct
Literally insane. Defense should be under 600 billion
I wrote an unflattering article about this at my bangpath substack
I wonder if the blowup in the basis trade that has sent the 30 year futures down more than 10 points in 3 sessions and yileds spiking from aorund 4.3% to over 5% in 3 sessions, 65 bps or so in 10s has something to do with this idiocy or if that is more related to margin calls
Sorry Bub…need to spend moar on defense meow, right meow.
After all, if we don’t, how will we be able to defend “our greatest ally“?
$4 billion per year in free FedBux surely ain’t gonna git’er dun.
Any minute now scary Iran will have the BIG ONE…or so Bibi has told me for the past 10 years….maybe 20? I’ll have to check that with Ben Shapiro.
Gotta git’em over there before they git us over here…or some such nonsense.
“Any minute now scary Iran will have the BIG ONE…or so Bibi has told me for the past 10 years….maybe 20? I’ll have to check that with Ben Shapiro.”
20 years? No, the talk of that happening for more than twice that-
“The April 24, 1984, edition of the British defense publication Jane’s Defence Weekly informed its readers: “Iran is engaged in the production of an atomic bomb, likely to be ready within two years, according to press reports in the Persian Gulf last week.””
https://www.theatlantic.com/international/archive/2015/04/iran-has-been-two-years-away-from-a-nuclear-bomb-since-the-1980s/389333/
China has just returned fire after US declared economic warfare.
DOW expected to fall upon opening. Hopefully the MAGA acolytes will enjoy the hit to their 401(k)
Their “401k” is a few grams of meth, a case of twinkies, and a few thousands rounds of .223. They will be fine.
Trump is in pursuit of the proverbial “free ride”. This is the same free ride, socialists have been chasing for over a century. So far all they have ever found is economic misery.
Poor people have too much money, it’s time to help our hard working, struggling defense contractors. Who’s with me?
The largest employer and retailer just threw forecasts out the window. Everyone better stock up and get their depends on, lots of people will be pooping their pants soon enough.
https://www.cnbc.com/2025/04/09/walmart-pulls-q1-guidance-due-to-trump-tariffs.html
Won’t phase MAGA, they’ve already prepared to go shop at the thrift stores rummaging through hand-me-downs to live the American dream.
And to think the pee in the trousers from last weeks BIGGEST BEAR MARKET IN FOREVER…was just starting to dry out.
And you’re correct…non of this will phase MAGA…they’ve been down and out and sh!t on for decades now and have done plenty of adjusting to weather the storm.
I was in Wally World yesterday looking at getting one of those self contained first aid kits for the camper. The store brand had every single product sourced from China. The Johnson and Johnson brand was a mix of Chinese and Brazilian.
looks like I’ll be keeping the small box full of first aid odds and ends.
“Won’t phase MAGA, they’ve already prepared to go shop at the thrift stores”
The point you missed is that MAGA is already shopping at thrift stores. That is why MAGA exists.
Walmart is the largest PRIVATE employer. The absolutely largest employer in the world is the US DOD.
It’s time for poor people to stop buying expensive i-phones.
And so the Titanic sails on with Captain Crunch at the helm. China strikes back with 84% tariffs and Dow futures down 900 points.
Winning! /s
Total bullshit. We spend too much already.
Dear Leader has said “WRONG!”
What is don old paranoid about now? So wasteful military spending is ok?
I think he’s paranoid about getting whacked – or at least politically sidelined – by the military-industrial-congressional complex. He doesn’t have the courage to stand up to them or the Israel lobby.
Maybe that money is just for his upcoming military march on his birthday. He thinks nothing of wasting American taxpayers for his golf trips. Seriously can’t understand his supporters on board with his waste of taxpayer money for his self aggrandizement and amusement. All the while they keep saying they are the fiscally responsible party. Conservatives crash our economy every time they are in charge.