Last week, Moody’s Ratings lowered the United States credit rating, a concerning development following similar downgrades by Fitch Ratings and S&P Global Ratings. This latest downgrade stems directly from Congress’s persistent failure to address the staggering $37 trillion national debt. The House Budget Committee was visibly scrambling to secure the necessary votes to pass legislation extending the 2017 tax cuts, a move championed by President Trump as the ‘big beautiful bill.’ This controversial bill includes significant tax cuts, notably the repeal of federal taxes on tips and overtime pay. To offset the anticipated ‘lost’ revenue from these cuts, the bill proposes ‘cost-saving reforms’ within domestic welfare programs, primarily Medicaid and food stamps. However, a key element driving the increased debt is a substantial boost to military spending. According to the Committee for a Responsible Federal Budget, the ‘big beautiful bill’ is projected to escalate the national debt by at least $3.3 trillion over a ten-year period – a figure likely to increase as several moderate Republicans threaten to oppose the bill unless the Medicaid and food stamps reforms are significantly limited or completely eliminated. The fundamental issue at play is the inherent contradiction within the Republican strategy: advocating for tax cuts while simultaneously failing to implement commensurate spending reductions. Tax cuts, when not paired with corresponding cuts in government expenditure, inevitably lead to increased debt, which in turn fuels higher taxes. This ‘inflation tax,’ orchestrated through the Federal Reserve’s monetization of debt, diminishes the purchasing power of the dollar, disproportionately benefiting political and financial elites at the expense of the average American. Republicans’ difficulty in achieving politically acceptable offsets for their tax plan underscores their misguided approach – prioritizing tax cuts over responsible fiscal management. Instead of targeting welfare programs for low-income individuals, a more prudent strategy would involve focusing on reducing spending within the military-industrial complex. President Trump’s recent visit to the Middle East, where he delivered a speech refuting the ‘neocon crusade’ that has shaped American foreign policy since 9/11, highlights the growing recognition of this flawed approach. Despite this shift in rhetoric, President Trump is proposing to increase the military budget to a staggering $1 trillion – a decision that ignores the underlying fiscal realities. It is clear that Republicans will never commit to meaningful spending cuts until they abandon the illusion that they can simultaneously pay down the national debt, enact further tax cuts, and maintain massive spending on military intervention. Fiscal conservatives must also recognize that their current strategy of targeting welfare recipients while expanding federal spending on foreign interventions is fundamentally unsustainable. The debt that triggered the credit rating downgrades is not a consequence of tax cuts, but rather a direct result of excessive government spending. Congress should prioritize reducing taxes and simultaneously implementing deep cuts in military spending, a move that would not only address the fiscal crisis but also promote peace and prosperity.

Furthermore, Congress should initiate a phased elimination of welfare programs, conducted in a manner that minimizes harm to those currently reliant on these crucial safety nets. A critical step in this process would be to audit and ultimately end the Federal Reserve’s operations – a powerful institution that has enabled decades of inflationary monetary policy. Finally, Congress should repeal the 16th Amendment, which established the system of income taxes in 1913, a move widely considered one of history’s greatest mistakes. By dismantling this flawed system, the United States could finally be freed from the constraints of fiat money and income taxation, paving the way for a truly free and prosperous nation. Ron Paul, a former member of the House of Representatives, has long advocated for these fundamental reforms.