Trump's $5 Trillion Debt Bill Passes House, Deepening US Fiscal Crisis

President Trump’s One Big Beautiful Bill, currently pending in the Senate, could significantly exacerbate the US debt crisis. The bill, which passed the House on May 22, proposes a $5 trillion increase in the debt ceiling, along with a net addition of $2.4 trillion to the national debt over a decade. This is due to a $3.67 trillion reduction in federal revenue and a $1.25 trillion reduction in spending, according to the nonpartisan Congressional Budget Office. The bill includes extended tax cuts, elimination of green energy incentives, tighter eligibility for Medicaid and SNAP benefits, and a major expansion of immigration enforcement.

The US budget deficit exceeded $6 trillion in 2024, and efforts to cut federal spending have been largely unsuccessful. Interest rates remain at 4.5%, and the yield on 10-year Treasurys hovers above 4.35%. The US debt spiral is deepening, with no credible plan to reverse it. Some argue that the US can "grow its way out" of this problem, but with real GDP growth registering -0.3% in Q1 2025 and an estimated 3.8% growth in Q2 2025, such a scenario remains unrealistic. Deficits are projected to exceed 7% of GDP for the remainder of Trump’s term, and the only growth possible now is nominal.

In a debt crisis, governments have four tools: austerity, defaults, redistribution, and printing money. The first three are politically costly, while printing and devaluation is the most likely outcome. This wipes out savers, bondholders, and anyone dependent on fiat. Bitcoin, with its fixed supply and independence from government monetary policy, offers a refuge from financial repression and currency debasement. However, not all Bitcoin exposure is equal. In a crisis scenario, custodial risks are high, and the only true protection comes from self-custody, cold storage, private keys, and full control.

The US fiscal policy is running off the rails, with little political will to fix it until a major crisis occurs. The Republican-controlled Congress has not rejected a single Trump proposal, making the odds of the Big Beautiful Bill becoming law high. In that world, hard assets in self-custody will matter more than ever. The bill's supporters argue that tax cuts would stimulate the economy and "pay for themselves," but the experience of the 2017 tax cuts showed that they had increased the federal deficit by almost $1.9 trillion over a decade. The spiral of budget deficits and debt has already sucked in the US economy, and there is no credible plan to reverse it.