What is the New "One Big Beautiful Bill?"

Last Friday, July 4th, President Trump put his signature on a bill that he referred to as the “One Big Beautiful Bill” and this act is considered a new chapter for the American economy. The main objective of this extensive initiative is to increase the pace of the economy, keep the tradition of rewarding the labor, and also promote products made at home. It is a close call as the bill only got four votes more than the count needed to pass the House, 218 votes in favor, and 214 against. The era of tax cuts is extended by this measure and it also offers new incentives to the employees, business owners, and manufacturers. According to the new provisions, people can lessen their tax burden by not reporting tip money and hours of work that are paid to them without coming to notice. Activities for companies producing goods locally are given more room while some steps are taken to assist people in the energy or agricultural sectors. Leading politicians like the previous ones have been advocating it as the largest tax cut ever to happen; however, the opposing voices are concerned that the expenditure might spiral out of control.

 

Some experts remain in doubt whether this provision is beneficial or detrimental. They argue that it will revive the economy through increased consumption, employment, and wage levels. Another benefit of local manufacturing mentioned in the debate is that import dependency can be reduced, which was the point of one of the candidates that he kept emphasizing over and over. The bill offers tax relief to farmers as well as local businesses, aiming at winning rural voters' trust and providing revitalized factory jobs in areas that are heavily hit by trade. Although the proponents assert that the growth will pay for the plan, many economists see it as a major risk that could lead to an increase in the national debt by trillions of dollars within ten years. Employees at the CBO point out that continuous deficits are likely to cause the government to have to pay more for borrowing, hence ordinary people get less favorable loan rates than they think when taking loans.

 

There were also slight movements against the trend on the stock exchanges. At the very beginning when the news about the bill got to the public, shares went up as investors thought that firms would reap more profits and consumers would spend more. But at the same time, loan costs also increased, which reflects concerns about a likely rise in inflation and the duration of the current cycle of economic growth. Should the government increase debt levels at the same time as the Fed is hiking the rates to cool down the economy, instead of the expected effect, companies will react by lowering their spending levels. This is what is happening now. Imagine the early 1980s when Reagan introduced tax cuts to fuel economic growth, but the ever increasing budget deficits eventually led to higher borrowing costs. Today, a similar scenario could take place if the authorities are not able to find the right mix between stimulus and fiscal restraint.

 

The impact of the law on individuals is conditional upon their salary and employment. Persons who man grills or are managers of small shops could feel some minor tax breaks, plus there would be more chances to get jobs. On the other hand, the wealthy people, especially those who have their money in stock market, may become winners of the deal when in effect, businesses keep the money and in return, issue dividends to the shareholders. The plan reduces funding for the underprivileged section of society and at the same time, decelerates the growth of the Medicaid program which is a change that the critics foresee hurting the already struggling households. Experts point out that when budgets are tight, most will spend nearly all the money they get; therefore, cutting benefits can result in lower consumption even if wealthy individuals continue shopping.

 

The present scheme only amounts to taking a chance: reducing taxes while simultaneously facilitating regulations with the hope that the profits will be higher than the losses resulting from increasing deficits or costs. Opponents of the policy envisage the unfurling of the chaos, with the conflict between the rich and the poor becoming more pronounced, while its proponents foresee the effect of growth gaining more and more strength until it arrives at a point where it is no longer possible to stop it, just like a rolling snowball. This measure, which was voted in close to the beginning of President Trump's second term, might ultimately be considered his most significant monetary, related victory. Whether it will lead to real, sustainable growth in the long run or simply deliver a brief upturn until the problems reappear, is contingent upon the way businesses, individuals and world markets will behave from now ​‍​‌‍​‍‌​‍​‌‍​‍‌on.