Despite considerable arm-twisting, President Donald Trump’s laughably misnamed “Big Beautiful Bill” (actually a Big Ugly Atrocity) barely passed both houses of Congress.  Such a monstrosity, which has been conservatively estimated to add $5 trillion to the national debt including interest over the next decade, is a slap in the face to those souls who believed Trump’s campaign rhetoric of cutting federal spending.*  This vindicates, once again, those who have correctly seen Trump for what he truly is – a big-spending liberal New York democrat.

Arguably, the most reprehensible aspect of the legislation is the $150 billion increase in “defense” outlays which will boost Uncle Sam’s military budget to a neat $1 trillion a year.  This will provide plenty of lucre to keep the military industrial complex well-oiled to continue its world-wide mass slaughter of innocents.  So much for lightweight Secretary of Defense Pete Hegseth’s initial, and now long forgotten, talk of cutting the Department’s budget by 8% per year over the next decade.

While Trump and nearly every Congressional Republican continue to spend the nation into oblivion, little attention was given to the continuing and financially ominous decline in the U.S. dollar.  The greenback has fallen more than 7% in 2025, the worst since 1973, with some analysts predicting another 10% drop by the end of the year.**

Concomitantly, the dollar’s decline has seen a historic rise in the gold price with silver reaching highs not attained since 2012.  Precious metals are signaling economic troubles ahead, especially in the currency markets.

While some have pointed to Trump’s harmful tariff policy for the dollar’s fall, the real culprit is the massive U.S. debt and interest payments, which increased even further with the passage of the Big Beautiful Bill Act.  To finance the exploding debt and interest (which has now surpassed $1 trillion per year), the government will have to borrow even more. 

This will force the Federal Reserve to print more money to service the debt putting added downward pressure on the greenback.  More dollars printed will obviously mean a fall in its purchasing power, not only domestically but in relative terms to foreign currencies.  The inverse of a decrease in the purchasing power of the dollar will be an increase in the prices of goods. 

It is a vicious circle exacerbated by Trump’s latest budget.

A larger question that U.S. policy makers will have to face if the dollar continues to slide is its current status as the world’s reserve currency.  The loss of this privileged position would be the death knell to the ability of the United States to project its financial and military power throughout the world. 

Most international transactions are settled in dollars that bolsters its demand in foreign exchange markets.  If countries settle trade in another currency or, as some have speculated, in terms of precious metals, the demand for dollars would fall.  If the supply of dollars has to increase due to continued profligate U.S. federal spending and demand for dollars internationally falls, the “price” of dollars (their purchasing power) would tank. 

Moreover, if foreign nations do not need dollars in trade, eventually the dollars they hold will make their way back to America, causing domestic prices to sharply escalate. 

Of course, the one bright spot of losing its world’s reserve currency status would mean the collapse, or at least a catastrophic pull back, in America’s vast overseas military commitments and interventions.  No longer could the U.S. maintain its mammoth military expenditures to police the world.

Massive deficits are also an impediment (although Trump apparently does not realize it) to the president’s hopes of lowering interest rates.  Even if he can get Federal Reserve Chairman Jerome Powell to cut rates, the Fed does not control long-term rates which will undoubtedly spike putting upward pressure on all rates.  This will increase borrowing costs for the government, which will likely end in a sovereign debt crisis.

At this point, there is no turning back.  The only way to save the dollar is to cut spending, which would mean less borrowing and thus less money printing. 

Trump and the Republicans with their Big Beautiful Bill have hasten the dollar’s ultimate demise and the economic collapse and social misery that will follow. 

*Committee for a Responsible Federal Budget, “Breaking Down the One Big Beautiful Bill.”  4 June 2025, ww.crfb.org/blogs/breaking-down-one-big-beautiful-bill 

**Liz Hoffman, “The US dollar is on track for its worst year in modern history.”  Semafor, 3 July 2025, https://www.semafor.com/article/07/03/2025/the-us-dollar-is-on-track-for-its-worst-year-in-modern-history

Antonius Aquinas@AntoniusAquinas