All during the last few days, we've heard some startling news. Moody's, the bond evaluator, for the first time in its history, since 1917, has lowered the credit rating of the United States government from Aaa to Aa1.

It didn't do that during the 2008 meltdown. It didn't do that during the Great Depression. It didn't do that during 9/11. It didn't do that during the Biden years when we borrowed $7 trillion. But it did it now.

At the same time, Jerome Powell, the head of the Fed, will not lower interest rates even though there's been a good jobs report, a good inflation report, a good corporate profits report. Gross domestic product is gonna be evaluated, apparently, upward and there's been low energy cost. That mortgage is still 4.25% Fed rate to 4.5%. And that means mortgages are still 6.5%, 7%. And that housing market is slowing as a result.

And this has got President Donald Trump very angry, that they're doing this, given the prior administration borrowed $7 trillion and helped run up from $29 trillion in national debt to $37 trillion, and left Trump with a $3 billion-a-day interest payment. So, he's jawboning all this and trying to get down. So, what is Trump trying to do? And is it working?

Well, he's the first president since Bill Clinton and Newt Gingrich, the speaker of the House at that time, who's talking about reducing a $2 trillion budget deficit, a $1.2 trillion trade deficit, and addressing a $37 trillion national debt. But is he actually doing it?

On the plus side of the ledger, you've got the Department of Government Efficiency. And DOGE in the first 100 days has identified about $160 billion in cuts. That's encouraging if two things are following: if they can keep up that rate of identifying cuts and get up to the $500 billion or even $700 billion and maybe make 25% or 30% reduction in the $2 trillion deficit. And if the Trump administration exercises fiscal discipline.

The problem is twofold: that while he's addressing verbally, rhetorically the debt and the deficit, you look at the big, beautiful bill under consideration and it's going to have to pass or the Trump administration will be completely humiliated.

They need to get it through reconciliation but there are sizable increases in the defense budget from everything that's justifiable, from salaries, from an Iron Dome-like missile defense—you name it. More drones—good. But it's more money. And there's more subsidies to farmers. And there's not a lot of cuts—at least when balanced with the increases.

So, the budget deficit, for all the talk of DOGE and for all the talk of fiscal sobriety, might not actually go down. And if it doesn't go down, the Fed may not lower rates. And if it doesn't lower rates, then you still are stuck with a trillion dollars a year in interest payments. That's killing us.