Welcome to today’s episode. There’s a long-standing rule of thumb in federal budgeting: spend heavily during crises and then get your fiscal house in order when the emergency passes. But the new House tax and spending bill does the opposite, adding trillions to the national debt while unemployment is low and the economy is solid. It would extend most Trump-era tax cuts and create new breaks for tipped workers and business owners, all while only modestly cutting spending. As a result, red ink would swell to near-record levels—our debt is already about 100 percent of GDP, the highest since World War II.

“I’m extraordinarily concerned about the fiscal implications of this,” says economist David H. Romer. Investors are already jittery. If they begin demanding higher rates to lend to Washington, rising interest payments could trigger a dangerous spiral. Critics warn this reckless borrowing in good times risks leaving the government powerless when the next downturn strikes.
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