A new potential market crisis has arisen from somewhere you might not have been expecting: President Trump’s “Big, Beautiful Bill.”
As you probably know, Elon Musk has recently spoken out demanding a stop to the bill that is, at present, the centerpiece of President Trump and the Republican Congress’s legislative agenda.
In recent Tweets, he has called it “debt slavery for the American people,” saying that “mammoth spending bills are bankrupting America,” and labeling it a “massive, outrageous, pork-filled Congressional spending bill [that] is a disgusting abomination.”
Now, here’s the thing to keep in mind: whatever you might think about Elon personally, or however you might feel about this bill as a one-off issue, Musk is correct. Out-of-control government spending and the growing national debt are the biggest crisis facing America as a whole over the next few decades.
Republicans like Speaker of the House Mike Johnson have argued that Musk is really worried about the EV tax credits that are going away — but that seems disingenuous. If Musk’s primary concern was the reputation and performance of Tesla, he would have stepped back from the political stage ages ago.
Musk is probably sincerely concerned about the national debt. We all should be.
But there’s another side to the coin: as the Republicans are fond of saying, if they DON’T pass some version of the “Big, Beautiful Bill,” the Trump-era tax cuts will fall off, resulting in what they’ve called “the biggest tax increase in American history.”
If that happens, the economy and the stock market will likely enter into short-term chaos. The Trump tax cuts remaining in place have already been priced into the markets. A Republican failure to get them through could send shockwaves through the economy.
But with a razor-thin majority in the House, and Musk’s outspoken (and financially powerful) opposition, things just became a whole lot tougher — especially with the Tesla CEO threatening to oust anyone who votes for the bill. We’re already well aware what his financial backing can do in a campaign.
So that creates a three-fold problem:
- In the short term, there will be massive economic consequences if NO bill is passed, and taxes are increased
- In the medium term, the bill as currently proposed might do more harm than good to the economy (although there are certainly arguments on both sides)
- In the long term, the political incentive structure motivates politicians to spend, spend, and spend — even though it could ultimately lead to a disastrous economic crisis or the total collapse of America’s financial system
As if things didn’t feel upside down enough, we now have President Trump taking to TruthSocial and announcing his agreement with Senator Elizabeth Warren about eliminating the debt ceiling:
Warren is a subscriber to Modern Monetary Theory (MMT), which argues (without any real support, in my opinion), that governments can spend money without limits and that deficits and inflation will never be a concern.
If the President now agrees with that policy, all bets are off on where spending could go from here.
As a trader, though, the most important thing to keep in mind is whether the “Big, Beautiful Bill” passes in the coming months — or at least some version of a bill extending the Trump tax cuts.
I still think that despite Elon’s interference, it will.
But if it doesn’t, or even if it looks to be in serious jeopardy, the markets could react very negatively.
So as much as you might not want to be a political junkie, at least keep an eye on this story. And I’ll let you know if there are major developments you need to know about.
To your prosperity,
Stephen Ground
Editor-in-Chief, ProsperityPub
P.S.: Speaking of Elon, Jack Carter dropped some SHOCKING new info on Tesla in a LIVE briefing yesterday that caused dozens of our traders to take immediate action and change their approach — find out what it was here
