Misalignment of U.S. Fiscal Policy and the Federal Debt

In September, 2026, U.S. President Trump announced his intent to have the U.S. Government send $5000 to every American, which would cost that government about a trillion dollars, in the event that Trump’s Republican group retains control of the U.S. House and U.S. Senate in 2027 after the upcoming “midterm” election. The attempt to sway the electorates to vote for Republican federal representatives and senators paid no heed to the $40.2 trillion debt of the U.S. Government. Even characterizing the proposed payments as “dividends” ignored the fact that the money would have to be paid for, either by federal taxes, tariffs, or issuing more Treasury bonds (i.e., federal debt). It was not as if the payments would go out from money that the government already had. Such electioneering so misaligned from prudent fiscal policy amid such a high public debt raises the question of whether a government “of the People” can govern responsibly rather than merely in line with instant gratification.

At his Republican “Midterm” convention in September, 2026, President Trump said, “If we win, we’re going to get you $5,000. So that’s it. Very simple.”[1] Actually, it is not so simple. Republican candidates for Congressional office had good reason to “sidestep the idea.”[2] Firstly, financing the “dividends” by issuing additional Treasury bonds would add $1 trillion to the extant $40.2 trillion federal debt, unless additional taxes would be enacted to pay for the $5000 checks to every American. The yields on Treasury bonds were already rising, making it more expensive for people and businesses, as well as the U.S. Government, to borrow money, and putting downward pressure on the stock market, making it more difficult for corporations to raise capital. Although the Federal Reserve raising interest rates and the relatively high inflation were factors behind the increasing bond yields, the fact that the public was holding about $32 trillion of the U.S. Government’s debt suggests that yields had to rise in order for so much debt to attract bond holders, for as bond prices decline, bond yields rise. So although AP News reported at the time that the rise in bond yields “has accelerated recently because inflation has remained stubbornly high for years,” the need of the U.S. Treasury department to attract investors as the amount of outstanding Treasuries bloats should not be ignored.[3] Even the media was slighting the economic headwind from the $40.2 trillion public federal debt.

The problem of bloated public debt—not counting those of the member states!—had also been absent during the 2024 presidential election campaign “season” in 2023. Neither of the main candidates for the office meant to safeguard the viability of the U.S. Government needed to respond to concerns raised by the electorates in the member-states, which indicates that perhaps a government “by the people” can sidestep, or even be inherently inclined to obviate hard fiscal-policy choices even amid a public debt that is greater than the annual economic output. Neither Trump nor Harris were pressured by voters or journalists to address whether, or how, to reduce the massive debt-load; hence Trump, once elected, felt free of political constraint to urge Congress to extend his tax cuts rather than to raise taxes and dedicate the proceeds to reducing the debt. Even as California produced a balanced budget in 2026, the U.S. federal budget deficit for fiscal year 2026 reached about $2 trillion as of August, 2026 according to the Congressional Budget Office. That’s $2 trillion added to the U.S. Government’s debt in that fiscal year alone. The fiscal imbalance is starling, hence so too is the proposal of $5,000 for every American. 

While it may be tempting to blame the president exclusively, such blame in a government “by the People” ultimately accrues to the citizenry itself. Jefferson and Adams agreed not on much, but that a viable republic really needs an educated and virtuous citizenry was assumed by both men, and thus this article of faith can be said to be nonpartisan, and thus patriotic in nature. Virtuous people take heed of being too much in debt as a instance of public irresponsibility, whereas profligate, selfish people are happy to send the bill to future generations without heeding even baleful economic indicators such as rising debt yields.  

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1. Mike Catalini, “Trump Pushes His $5000 ‘Dividend’ Pledge If GOP Wins Midterms,” APnews.com, September 18, 2026.
2. Ibid.
3. Stan Choe, “Wall Street Drifts Lower as Bond Yields Rise and Oil Prices Swing,” APnews.com, September 18, 2026.

President Von der Leyen’s State of the Union Address: Outsourcing the E.U.'s Strength

E.U. President Von der Leyen’s 2026 State of the Union address can be characterized as a bricolage of concerns “all over the map,” with proposed significant outsourcing of responsibilities to the international level. A notable opportunity cost that goes along with her approach is the political benefit that could have been gained by alternatively focusing on internal reforms to the E.U.’s governance structure and processes. Outsourcing internationally adds to this cost of a missed opportunity to sell internal reforms by making the E.U.’s federal level look weak. Even referring to the E.U. as a “bloc” and proposing an “associate membership” for Canada saps rather than strengthens the European Union.

Rather than proposing that qualified-majority voting apply to foreign policy and defense, President Von der Leyen “proposed a brand-new mechanism fashioned on NATO’s Article 4 that member states would trigger in the event of a hybrid attack.”[1] She thus ignored the E.U. itself, addressing instead the relationship between the E.U. states and the international alliance. By implication, the E.U. itself is weakened rather than strengthened. This is ironic, for she also said, “And in the cold fragility of today’s world, only Europe can provide true sovereignty to Europeans.”[2] Voiding the veto power of the state governments in the European Council and the Council of Ministers on defense would go towards providing such true sovereignty at the federal level; outsourcing to NATO would not.

Similarly, the president “offered to create a tailor-made status of ‘associate membership’ to bring Canada even closer to the bloc.”[3] Such a “status” would undermine the equality between Canada and the E.U. that is implied and thus proper for “an ‘alliance for the future’ to deepen EU-Canada cooperation in such areas of economic security, intelligent manufacturing, cutting-age technology, defence, energy, critical minerals and batteries, as well as the Arctic region.”[4] Canada’s tension with the U.S. on tariffs and the E.U.’s interest in retaining Greenland provide the subtext behind the proposed deepening of “EU-Canada cooperation,” but the president overreached in suggesting that cooperation itself should or does entail any sort of membership, and as if the E.U. were a bloc rather than a political union of states, and the word “membership” does not apply to states. In short, cooperating with another country is not to say that it is or should be a member or state, and in fact being a part even with an associate status is inconsistent with the equality that is implied in “E.U.-Canada cooperation.” Ironically, rather than the E.U. coming up on top as having Canada as a possible associate member, the E.U. is weakened because in having members the union is self-relegated as if it were merely an international bloc of countries like BRICS.

Thirdly, even though President Von der Leyen “framed the summer of 2026 as the ‘summer of truth’” in terms of “wildfires, retreating glaciers, water shortages, crop losses and extreme heat that have wrecked havoc” in the E.U., with the continent warming twice as much as the globe as a whole, her response was to be a European Heatwave Plan, which would “address early-warning systems, health preparedness, urban adaptation, and protection for vulnerable groups.”[5] Federal legislation bearing on the states could have been proposed that goes far beyond mere preparedness. Again, she was unwittingly enervating the Union by putting the states out in front, in the driver’s seat as it were.

With the military threat from a belligerent Russian president to the east, climate change from above, and a distancing U.S. administration to the west, and the prospect of the accession of additional states at home, the E.U. could no longer afford the veto mechanism that Hungary’s Viktor Orbán had so abused with impunity at the cost of the common good of the E.U., but the State of the Union speech did not include the rather obvious reform to qualified-majority voting on all competencies. Furthermore, no substantial federal legislation was proposed in defense (even of Ukraine), foreign policy, and to combat climate change by reducing carbon emissions throughout the E.U. Such a reform, which gives the E.U. some more governmental sovereignty even at the expense of that of the state governments, could put the E.U. in a strengthened position internationally such that the Union could pressure the U.S. administration to ease up on Canada in terms of tariffs. A strengthened E.U. could arguably be better for Canada than getting an associate membership status in a Union misconstrued (and thus internally weakened) as an international organization.

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1. Jorge Liboreiro and Marta Pacheco, “State of the Union: Five Takeaways from Ursula von der Leyen’s Speech,” Euronews.com, 16 September, 2026.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.