July 4, 2025, will likely be seen as one of the central dates of President Donald Trump’s second administration, as it was the day that he signed into law one of the most consequential acts of his presidency — the One Big Beautiful Bill Act.
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Extraordinarily controversial, even among some Republicans (due to in part to the bill’s projected cuts to Medicaid, as well as adding trillions to the national debt), the budget reconciliation law could have a large impact on American economics. In particular, how could the national debt impact Americans’ wallets?
Also see how much money you’d owe if the national debt was divided by household.
The National Debt
As reported by Time Magazine, the act is expected to add a staggering $3 trillion to $4 trillion to America’s $36 trillion national debt. Meanwhile, Newsweek reported that a recent analysis from the Cato Institute suggests the number is closer to $6 trillion, due to the bill’s spending on immigration and deportation policies, as well as its long-term tax breaks (among many other pricey provisions).
All that said, numbers like $3 trillion, $6 trillion or $36 trillion are so gargantuan that it can be hard for the average American to discern their impact upon their day-to-day lives. So should you and your wallet care about the Big Beautiful Bill’s impact on the national debt?
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Will It Impact Your Wallet?
The burden of an additional $3 trillion to $6 trillion to the federal deficit will most likely lead to higher interest rates, which already spiked during the COVID-19 pandemic.
Higher interest rates would likely mean higher costs, as it would become more expensive to finance high-priced items like cars and homes. If fewer people chose to buy homes as a result, the housing market and economy could slow.
A larger deficit wouldn’t change the daily lives of Americans just through higher interest rates either. As the Peter G. Peterson Foundation reported, the increased national debt would steadily decrease the American economy by $340 billion over 10 years, $1.1 trillion over 30 years and $1.8 trillion over 50 years.
As a kind of domino effect, this reduction of the American economy could lead to a reduction in American jobs, with an estimated 3.6 million positions likely to be eliminated by 2075 as the economy shrinks. That could then lead to lowered wages for the remaining jobs (with a projected 5.3% wage decrease over 50 years).
Overall, rising debt can hit average Americans’ wallets hard in ways both big and small. Financing could become more difficult, jobs could get more scarce and wages could get lower. Ultimately, though, it remains to be seen what will happen with this bill and the national debt. It was just signed into law last month, so Americans will have to wait and see what impacts the national debt will have on the economy and their wallets.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Should You and Your Wallet Care About the Big Beautiful Bill’s Impact on the National Debt?
