Debt Spiral: Why The Big Beautiful Bill Won't Fix the Big, Ballooning Deficit

The U.S. just added another $5 trillion to its borrowing capacity, thanks to President Trump’s new bill. While this move may ease short-term pressure, it raises deeper questions about debt, inflation, and economic stability. In this episode we welcome back Richard Squire, Professor of Business Law at Fordham Law School and faculty director of the Corporate Law Center, to unpack the deeper implications of the “One Big Beautiful Bill Act”. We explore how the U.S. deficit ballooned to over 100% of GDP, and why that’s especially troubling in a country with considerably lower tax revenue than its peers. Richard explains the Federal Reserve’s evolving role in managing inflation, the politics of interest on bank reserves, and why Senator Ted Cruz’s proposal to stop those payments could trigger runaway inflation. From fiat currency to the hidden mechanics of debt monetization, Richard offers a sharp, accessible breakdown of the forces shaping America’s fiscal future. He also explains who stands to bear the costs. Tune in for an eye-opening look at the choices that will define the decades ahead.

Key Points From This Episode:

• The “One Big Beautiful Bill Act”: How it will impact spending, taxes, and the deficit.
• How the US’s national debt compares to other developed countries.
• Why the US has an increasingly high deficit despite relatively low government spending.
• The role of low tax revenue in fueling the national debt.
• Why the Fed pays interest on bank reserves and how it helps fight inflation.
• Senator Cruz’s proposal and why it could trigger massive inflation.
• Debating a possible alternative fix to redirect income back to the Treasury.
• The politics of debt monetization and its hidden economic implications.
• Why the US is unlikely to default on debt issued in its own fiat currency.
• The economic tradeoffs between inflation, taxes, spending cuts, borrowing, and defaulting.
• Who suffers most from hyperinflation: younger adults, poorer populations, and future generations.
• Unpacking interest rates, tariffs, and the outlook for future inflation.
• A brief look at Wall Street’s reaction to debt growth and policy uncertainty.

Links Mentioned in Today’s Episode:

Richard Squire
Richard Squire on LinkedIn
Amelia Martella on LinkedIn

Fordham University School of Law Corporate Law Center