The ‘big, beautiful bill’ will have ugly results

‘Devastatingly cruel and deeply irresponsible” were the words American economist Paul Krugman used to describe President Trump’s so-called “big, beautiful bill” as it was passed by the Senate last week.

One of the many terrible things about Trump is the way he has conned the blue-collar workers of the US into believing he is on their side. The only side he is on is that of the already stinking rich, not least his own entourage, who stand to gain from the tax cuts in this bill, while savage cuts to government welfare payments are guaranteed to make the poor poorer. This is, in economists’ terms, a policy of redistributing income – but in the opposite direction to normal.

Analysts are concerned, if not panic-stricken, by the way the US is piling up debt, with dangerous implications for its creditworthiness in the bond and foreign exchange markets.

Personally I am a dyed-in-the wool Keynesian and have no problem with deficit financing when an economy is operating below capacity and unemployment is high.

Indeed, it can be necessary in challenging times. But Trump’s deficit financing makes the infamous Truss/Kwarteng budget look like a vicarage tea party.

Not content to destroy the lives of those who voted for him, Trump is making large parts of the world poorer via the removal of the majority of US foreign aid programmes. This is likely to lead to millions of deaths and illnesses as essential food and medical supplies are cut.

Which brings us to fiscal policy closer to home. I was suspicious when Keir Starmer’s government cut back our own foreign aid programme, in order, it was said, to finance increases in the defence budget. I wondered whether one of his motives was to impress Trump, to whom he has been kowtowing However, the economist Jayant Chavda suggests Nato secretary-general Mark Rutte has replaced Starmer as “groveller in chief” after his recent attempt to grease up to Trump by calling him “daddy”.

Trump and his acolytes are doing such damage to established norms and institutions that it would be only a slight exaggeration to revive that famous lament “civilisation hangs by a thread”. The  hope must be that via the economic and social damage he is wreaking on his own electorate, Trump will soon be found out and driven out.