Point of No Return
What happened next would almost certainly seal the nation’s fate. If it kept borrowing and spending as it has been doing for the last 25 years, the US would be beyond the ‘point of no return.'
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Friday, January 2nd, 2026
Bill Bonner, from Baltimore, Maryland
What a year! One for the record books. Or at least for a new chapter of ‘Extraordinary Popular Delusions and the Madness of Crowds.’
There was, for example...
A Big, Beautiful Budget Abomination...something new — a ‘budget’ that guarantees bankruptcy!
And tariffs. They haven’t been seen since Smoot and Hawley wrecked the world economy in the Great Depression.
Or how about this? An historic ‘peace’ treaty...where one side keeps killing the other...
And the first ‘covert’ operation by the CIA, advertised by the US president...?
Also out of the closet is the $3.4 billion gained by the Trump family in the last twelve months — not even the Bidens came close.
Questions of good versus evil...war and peace...poverty or prosperity...are addressed; and POTUS falls asleep.
In his waking hours, Trump aimed for the headlines...and he hit his mark. He may have slept through vital cabinet meetings, but he woke up later...and the Fourth Estate never had so many targets of opportunity.
Who would imagine, for example, that the American people would elect a POTUS with the dignity of a reform school dropout? NBC:
President Donald Trump on Saturday posted an AI-generated video depicting him in a fighter jet dropping what appears to be feces on U.S. protesters. The 19-second video features Trump wearing a crown in a fighter jet labeled “King Trump.” He posted the video to his Truth Social account following Saturday’s nationwide “No Kings” rallies that were organized in protest of Trump and his administration...
Sticking with the money...
The 21st century began with $5.6 trillion of US debt. Then, George W Bush added $4.2 trillion. Barack Obama added $7.6 trillion followed by another $7.8 trillion in Trump’s first term...and $8.4 trillion in the Biden years, bringing the total to $35 trillion in 2024.
A year ago, Trump controlled the Republican Party...and the Republicans controlled both houses of Congress. It was a breath-taking opportunity to save the dollar, reverse a quarter century of reckless spending, and return to balanced budgets.
What happened next would almost certainly seal the nation’s fate. If it kept borrowing and spending as it has been doing for the last 25 years, the US would be beyond the ‘point of no return’ before the next presidential election. Then, it would be almost mathematically impossible to avoid a financial catastrophe (bankruptcy, inflation, defaults, depression).
But Mr. Trump did not take the bull by the horns. He didn’t seem to know or care where the bull was. He didn’t seem to remember, either, that he had been elected to change things...not to continue on the Bush, Obama, Biden path.
Instead of changing course, he locked today’s financial trends in place. In 2025, US debt increased to $38.5 trillion and interest payments on the debt have risen to over $1 trillion annually.
In other words, before DJT, this sucker was going down...now, it’s still going down, just faster.
And yet, many are those who think the Big Man deserves credit. The economy isn’t doing badly, they say. So far, so good. No recession. No unemployment to speak of. Inflation, says Trump, is finished. And the tariffs are going bring hundreds of billions in revenue, along with a a renaissance in US manufacturing.
But doing the same thing as your predecessors is not a good idea, not when you are headed to bankruptcy. Trump’s program is really just a continuation of the Biden Plan — with low interest rates to boost asset prices and stimmie giveaways — warrior dividends, tariff dividends, Trump accounts — to boost spending.
The results are about the same too. The inflation rate was about 3% when Trump came into the White House for the second time...a year later, it’s still around 3%. GDP growth is running about 2.5% through the first three quarters of 2025. This is lower than Biden’s 3.2%; but in the same range.
Still, when asked, Trump said his handling of the economy deserves an “A plus, plus, plus, plus” grade.
What kind of madness is that?
In every case since the beginning of time up to the present...theoretical as well as empirical...consistently spending more than you earn has led to disaster. This time too, the feds will simply ‘print’ the money they need to continue living beyond their means. On December 1, 2025, the Fed ended its QT (quantitative tightening...aka inflation fighting). Soon, it will begin QE (quantitative easing...aka inflating).
The signature delusion of the Trump team is that whatever problem we have, real or imagined...drugs, crime, interest rates, poverty, housing...is someone else’s fault. And the centerpiece of the economic program is tariffs. Mr. Trump blames foreigners for selling us better products at lower prices. So, he taxes US consumers with tariffs – now about 5x as high as they were a year ago.
What is probably most remarkable about the tariffs is that so many people go along with them. On his own say-so, POTUS is destroying businesses and making millions of people poorer. But the ‘crowds’ fall in line.
How mad are these crowds?
Stay tuned…
Regards,
Bill Bonner
US government debt grew by over $70,000 per second in 2025. At the current rate, according to the Joint Economic Committee of Congress, the national debt will hit $39 trillion by March 06, 2026—just 63 days from now. The next trillion dollars in debt, bringing the total to $40 trillion, would be added 157 days later (Monday, August 10th).
