The Republican returned to the White House promising to reduce spending, reduce the size of the government and stimulate the economy to put public finances in order. So far, however, the debt has continued to grow.
But the problem didn't start with Trump. American debt has been rising for decades, under Republican and Democratic governments. Factors include tax cuts, wars, economic stimulus programs and, more recently, the aging of the population.
In January 2025, Trump assumed the Presidency again promising to change this trajectory, but also increased spending and reduced taxes. The result is an ever-increasing debt and a heavier bill for the government.
🔎 In addition to debt rising, the cost of financing it has also risen, as yields on some US government bonds have reached their highest levels in nearly two decades.
Budget experts warn that without changes, the government could be pressured to take politically unpopular measures, such as raising taxes or reducing social benefits, including Social Security.
“There is no scenario in which you can look at President Trump’s record, both this term and the previous one, and declare him a fiscal success,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington think tank.
For her, Trump is not solely responsible for the current situation, but he plays a central role in defining the government's agenda.
“The way we got to this point was not his fault, but the fact that we are in this situation and that parliamentarians have done nothing to improve it is the fault of all of them, with the president clearly occupying a central role and setting the agenda.”
Trump promised to cut spending. Debt continued to rise
The promise to reduce the size of government was at the center of Trump's campaign. During the first year of the second term, thousands of federal employees were fired and programs considered wasteful by the government were eliminated.
White House spokesman Kush Desai said Trump was the “first president to seriously combat widespread waste, fraud and abuse across the federal government.”
The annual deficit — the difference between what the government collects and what it spends — fell in 2025, but only marginally. Total debt, in turn, continued to increase.
Tax cuts also weighed on the accounts. According to the Committee for a Responsible Federal Budget, the tax cuts approved in Trump's first term added US$8.4 trillion (R$43.3 trillion) to the debt.
In the second term, the new tax and immigration law added another US$4.7 trillion (R$24.2 trillion), according to the Congressional Budget Office.
🔎 Trump, therefore, faces a contradiction that also appears in other countries, including Brazil: reducing taxes can stimulate the economy, but, if the drop in revenue is not accompanied by an equivalent reduction in spending, the debt tends to continue growing.
The account did not start with Trump
The trajectory of American debt crosses governments of both parties. Republican presidents like Ronald Reagan and George W. Bush widened deficits with tax cuts, while wars during the Bush administrations also increased spending.
Democrats Barack Obama and Joe Biden adopted large stimulus packages after the 2008 financial crisis and during the Covid-19 pandemic, respectively.
Bill Clinton was an exception. In his second term, the government recorded modest annual surpluses, in a period of strong economic growth and reforms to social assistance programs, the result of an agreement with a Republican-controlled Congress.
Therefore, it is difficult to attribute the debt to a single president or party. Republicans and Democrats, at different times, have increased spending or reduced government revenues.
The problem is also demographic
There is also pressure on public accounts that does not depend on who is in the White House: the aging of the population.
The generation known as baby boomers, born in the years following World War II, is retiring. As a result, spending on social benefits increases, while payroll tax collection is not enough to cover future payments.
It is a problem similar, in its logic, to the challenge faced by other aging countries: more people start to receive government benefits, while proportionally there are fewer workers contributing to finance them.
In the US, previous generations of Republicans have advocated for changes to these programs. Trump, however, led the party away from that position by creating new social protection programs, such as government-backed investment accounts for newborns.
Trump's bet: grow to pay the bill
Trump's strategy is based on a long-standing idea among American conservatives: lower taxes and less government intervention could stimulate investment and economic growth.
With a larger economy, revenue would increase and it would be possible to reduce the debt burden without resorting to tax increases or deep cuts in social programs.
Trump summed up this bet in August: “Growth will solve this very easily.”
In late August, in the Oval Office, he stated that his policies could increase US economic output by 20% per year.
According to the text, this rate of growth has been achieved only once since 1947, in the third quarter of 2020, when the economy recovered after the end of restrictions related to Covid-19.
Trump's optimism contrasts with the warning from Kevin Warsh, head of the Federal Reserve (Fed), the American central bank.
According to Warsh, the record volume of investments in artificial intelligence and large technology companies indicates a struggle for capital and could push interest rates upward, also increasing the government's cost of financing.
The spending cut was far from the promise
During the campaign, Trump promised that tax cuts would be accompanied by major reductions in public spending. To this end, he tasked Elon Musk with heading the now-defunct Department of Government Efficiency.
Musk promised to save US$2 trillion (R$10.3 trillion) in the budget. The agency ended up reporting savings of US$110 billion (R$566.5 billion).
According to the Government Accountability Office, however, this calculation was based on claims that were exaggerated or unverifiable. The White House did not respond to a request for comment on the findings.
For MacGuineas, the problem is not actually reducing taxes, but doing so without cutting spending in the same proportion.
"It's not that you can't reduce taxes. It's possible, but you need to associate this with cuts in spending, and that hasn't happened," he said.
Who pays the bill?
For now, the US$40 trillion (R$206 trillion) debt may seem like a distant problem for ordinary citizens. But its effects are already appearing in everyday American life.
🔎 Higher interest rates make real estate financing more expensive, while inflation reduces purchasing power when prices rise faster than salaries.
The pressure also tends to gain political weight. The debt exceeded US$40 trillion (R$206 trillion) just before the November legislative elections, which will define whether Republicans will maintain control of Congress in the second half of Trump's term.
The mechanism is also known in Brazil: when the government spends more than it collects for an extended period, the account does not disappear. At some point, you need to increase revenue, cut expenses or live with a larger and more expensive debt.
In the American case, however, this choice has become especially difficult because it involves programs that serve millions of people and decisions accumulated by governments of different parties.
Current and former government officials say the White House does not receive due recognition for economic advances and measures to reduce consumer prices, which, they say, could improve the fiscal situation.
William Emmons, former vice president of systems at the St. Louis Federal Reserve, sees the situation differently. For him, Trump inherited a bad fiscal scenario, but his policies made it worse.
"He inherited an unfavorable scenario. It's no surprise to anyone that the budget environment was challenging, both in 2016, when he took office, and today," said Emmons. “He made a situation that was already bad worse.”
