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    Trump’s ‘big, beautiful’ bill is built on falsehoods about low-income families | Brigid Schulte and Haley Swenson

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    As they race to deliver Donald Trump’s “big, beautiful” tax bill, Republicans in Congress are using familiar tropes to justify massive cuts to the safety net that will leave millions of low-income children and families without healthcare or sufficient food. The programs, they argue, are rife with waste, fraud and abuse, and the people who use them just aren’t working hard enough. So work requirements are necessary to force the obviously lazy “able-bodied” people to get to work.Here’s the reality check: a majority of those receiving this aid who can work are already working. More than 70% of working-age people who receive nutrition benefits or Medicaid, the health insurance program for low-income children and adults that covers one in five Americans, are already working, according to the Government Accountability Office. Those who aren’t working, research shows, are mostly ill, disabled, caring for a family member, or in school.Take the story of Ruaa Sabek. When the Covid pandemic hit in 2020, she and her husband worked at a fast-food restaurant in Philadelphia. Both their hours were cut, but they didn’t qualify for unemployment benefits because they remained employed. With two young children at home, their carefully managed budget began to crumble under rising prices and reduced incomes.What saved them wasn’t extraordinary luck or family wealth. It was the streamlined and expanded government support programs that turned what economists predicted would be a financial apocalypse into a springboard toward financial stability for some families.One analysis of Medicaid work requirements by KKF, a health policy research organization, found that most working people with low enough incomes to qualify for Medicaid typically work for small companies or in sectors, like agriculture, that don’t offer employer-sponsored health insurance, or the rates are unaffordable. In other words, their jobs don’t pay them enough to afford basics, don’t offer benefits, and they have no other choice but Medicaid.There’s no doubt that safety net programs like Medicaid could be improved. They’re rife not so much with waste, fraud and abuse, as conservative lawmakers say – though there is some – but confusing red tape; disincentives to upward mobility, because benefits cut off sharply as soon as incomes start to rise; and cumbersome, punitive rules designed to dissuade people from applying for benefits in the first place.Fueling the Republican drive to slash public benefits is a long-held belief among many conservatives that the reason most people live in poverty is because they don’t work, or don’t work hard enough, and are instead lazing about, dependent on government largesse, and robbing Americans of their hard-earned tax dollars.That view features prominently in Project 2025, the playbook for the Trump administration authored by the conservative Heritage Foundation. The foreword reads: “Low-income communities are drowning in addiction and government dependence.”And it was clearly on display in recent House congressional hearings on how to slash $1.5 trillion from the federal budget in order to pay for extending Trump’s 2017 tax cuts. “That little gravy train is getting ready to run out,” one Republican lawmaker said of federal safety net programs like Medicaid and food and nutrition aid for people living in poverty. “The spigot is getting ready to be turned off.” The billionaire Elon Musk, charged with cutting federal spending, has even posted a meme calling people who rely on federal spending the “Parasite Class”.Here’s another reality check: Three in 10 Americans, more than 99 million people, rely on some form of federal aid to live. That includes nearly half of all children in the United States. Another 52 million households, 41% of all US households, make too much to qualify for public safety net benefits but still not enough to survive. Nearly 40% of Americans would struggle to cover a $400 emergency expense.There is a problem with making policy decisions based on the unfounded belief that poverty is about people with bad moral character making bad choices, or on debunked racial tropes of undeserving “welfare queens.” (In fact, white people make up the largest group receiving public food and healthcare aid.) Shaping policy around false stereotypes, rather than the complex reality, prevents policymakers from working together on real solutions.In fact, if you talk to people living in poverty, what they say they want tracks nearly exactly with what Project 2025 aims to foster: “empowering individuals to achieve economic independence.”“If I earn good money, I’m not going to be looking for benefits. I’ll take care of my bills,” said Blessing Aghayedo, a licensed practical nurse in Minnesota. Instead, she earns barely more than the federal minimum wage, which has been stuck at $7.25 an hour since 2009.Breathing roomIn the Sabeks’ case during the pandemic, expanded Medicaid and enhanced nutrition benefits helped weather health emergencies and soaring grocery prices. Rental assistance prevented them from losing their housing when they fell behind on payments. Stimulus checks and the expanded monthly child tax credit provided crucial cash that covered essential expenses like milk, diapers, children’s clothing, utility bills, and car repairs when they needed a new transmission.Perhaps most significantly, public subsidies for childcare and the Head Start program reduced their childcare expenses from an overwhelming $1,300 per month to $120, enabling Ruaa Sabek to continue working part time and enroll in a banking training program. “I feel like, ‘Oh my God, peace of mind,’” she said of the breathing room the public benefits gave her and her family. As a result, she landed a full-time position in 2023 as a personal banker that pays $45,000 annually with benefits – a dramatic improvement from her previous part-time $12-an-hour cashier job with irregular hours and no benefits.The family is now thriving without public assistance, aligning with decades of research. “You can’t actually figure out how to get to flourishing until you’re in a stable and secure situation,” said Megan Curran, director of policy at the Center on Poverty and Society Policy at Columbia.Research shows that when families have a stable foundation, they are healthier and live longer. Adults are more likely to keep working, and children are more likely to stay in school, graduate, get better jobs, and pay taxes as adults. Even babies’ brain development is improved.And the stability pays for itself: the Child Tax Credit, for instance, returns $10 for every $1 spent every year. The United States remains the only wealthy country with no national paid maternity leave, yet the return on investment for paid family leave is 20:1. For childcare, it’s 8:1.Meanwhile, rather than saving taxpayers a ton of money, as Musk promised, slashing safety-net support ignores the real problem that keeps families from economic independence: 44% of the workforce in the United States, the wealthiest country on earth as measured by GDP, is low-wage, a share far higher than in many economic peer countries.Squeezing families already struggling financially could increase the share of those already waking up hungry, homeless, or worried they soon might be. The United States already has one of the highest rates of child poverty among wealthy countries. The National Academies of Sciences, Engineering and Medicine estimates that high poverty rate costs as much as $1tn a year in lost adult productivity, increased crime and poor health.Childcare is keyIf lawmakers are serious about adding work requirements for safety net programs, then ensuring families have access to affordable childcare is critical. Compared with other advanced economies, the United States invests the least in childcare. That means childcare costs are second only to mortgage or rent for most families who have to pay out of pocket. And federal childcare subsidies for low-income parents come nowhere close to covering those eligible.The lack of affordable childcare sent Kiarica Schields, a college-educated hospice nurse and single parent in Georgia, spiraling into a cycle of joblessness, eviction, instability, and poverty. “Childcare. That’s my issue,” she said.Trump has said he wants families to have more children. Yet surveys show that young people aren’t having children, or having as many as they’d like, because they can’t afford childcare.Kel, a divorced parent of four, wants lawmakers to think of public benefits for families like hers as a short-term investment with long-term benefits. Kel, who asked not to use her last name, fled an abusive marriage, struggles to pay bills, though she works as much as she can, and relies on Medicaid for life-saving physical and mental health treatments for her and her children. “Lifting me and people like me up will have a cascading effect on so many lives in a positive way,” she said. “We will give back to our communities tenfold, a hundredfold. It’s worth that investment in us. We’re a really good investment.”

    Brigid Schulte is the director of New America’s work-family justice program, Better Life Lab, a Pulitzer Prize winning journalist, and the author of Over Work: Transforming the Daily Grind in the Quest for a Better Life and the New York Times bestselling Overwhelmed: Work, Love and Play when No One has the Time. Haley Swenson is a research and writing fellow for the Better Life Lab More

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      in UK Politics

      Voices: ‘Raising taxes is political suicide’: Readers tackle uncomfortable truth behind UK’s growth slump

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      As Chancellor Rachel Reeves prepares to deliver her first major Spending Review, Independent readers have weighed in on one of the thorniest issues in British politics: how to restore the UK’s fragile public finances.A new warning from the OECD urging Reeves to act quickly – with a mix of tax rises, spending restraint and welfare reform – has reignited debate about the long-term sustainability of the nation’s economy. It comes amid rising borrowing, downgraded growth forecasts, and geopolitical tensions, including Donald Trump’s revived trade war and pressures to dramatically increase defence spending.The discussion has sharpened as the government faces calls to find billions to protect benefits and pensions, while also making the country “war ready” with a potential jump in defence spending to 3 per cent of GDP. But where should that money come from – deeper cuts to services or higher taxes?In the comment section, readers explored whether the current tax system is fair, whether austerity has run its course, and if bold moves like taxing wealth, equity, or luxury goods could be part of the solution. Others warned that without more efficient public spending, no amount of tax will be enough.Here’s what you had to say:Raise taxes or continued austerityTwo choices really: either raise taxes significantly, or continue mild austerity – limits to public services spending (and quality), and small cuts here and there to welfare spending.The problem with raising taxes is we are already taxed quite heavily in the UK, and further increases will hit people’s spending and economic growth… unless, of course, only the wealthy are targeted for tax rises – but good luck with that.ChrisMatthewsMoney is not the issue – resources areIt makes no sense to discuss national spending and budgets in terms of money. That works for individuals (to whom money has value), but not for nations (since all the money possessed by one member is a liability of others… it has net zero value to the nation*). We need to talk in terms of productive/economic resources and start from the obvious point: they are finite. Allocating more resources to e.g. housebuilding (essential) means fewer available for other uses – no matter who builds the houses, public or private sector. That means we will, on average, be worse off in the short run, in terms of personal spending.Discussion in terms of money makes it all seem like our personal budgets… that leads to seriously wrong thinking.*Unless it is foreign money, which has value to the nation.much0adoWant to share your view? Add it in the comments here.Wealth inequality is getting worseBearing in mind the shift in wealth distribution:1995–1998: The top 10 per cent held 47 per cent of total wealth, while the bottom 50 per cent held 9 per cent.2020–2022: The top 10 per cent now hold 57 per cent of total wealth, while the bottom 50 per cent hold just 6 per cent.(ONS, Wealth and Assets Survey)The UK should seriously consider some form of wealth taxation. There are several economies that have this; the UK could look at how effective this form of taxation is, and what the drawbacks are.I’m not saying the UK can’t work something out for itself, but the track record isn’t great – in anything.wolfieThe poorest pay a greater share of taxTaken from the Equality Trust using ONS figures:”The poorest 10 per cent of households paid on average 48 per centof their income in tax in 2022/23. The richest 10 per cent of households, however, paid on average just 39 per cent of their income in tax.Council tax is a key source of disproportionate taxation, with the poorest 10 per cent paying 7 per cent while the richest 10 per cent pay just 1.2 per cent.Similarly, VAT hits the poorest harder, with the poorest 10 per cent paying 12 per cent while the richest 10% pay just 3 per cent.The post-tax income for the richest 10 per cent is £112,874 – over 12 times higher than the poorest 10er cent’s post-tax income of £9,651.00.”We really can’t afford to support the lifestyles of the mega-wealthy.TalkingSenseTaxes are already too highLabour has already raised taxes above what was already the highest ever level in history. Such ever-higher taxes lead to ever-lower growth, and even declining GDP. Taxes need to be cut, and health and welfare overspending cut back.MarkLook to ScandinaviaOur party system has failed.And capitalism itself has failed.But at least Scandinavian countries have the sense to employ much fairer and more humane versions of it.As the quality of life in those countries incontrovertibly proves, including their health systems, social services, benefits, and transport systems.Cyclone8Minimum wageWhat politicians avoid discussing – including Farage and Starmer – is whether taxation is equitable in the UK, and whether the UK government spending so much on top-up benefits could be reduced by raising the minimum wage and making sure it’s enforced.forumCutting benefits unacceptableCutting benefits is an unacceptable method of balancing the books. Taxing the rich is currently impossible unless done in a coordinated global way. The only things left – as we are already being ridiculously austere –are to have the middle classes carry the burden and continue to make savings via management of immigration.BigDogSmallBrainTackle public sector inefficiencyI think taxes have been raised enough, and it’s high time public sector inefficiencies are addressed. Of course, with a governing party beholden to the unions, this is very unlikely.Ian RobinsonHyper-luxury VAT could helpA 100 per cent VAT on private jets, luxury yachts, caviar, Ferraris, handbags that cost more than the average weekly shop, diamond tiaras, and hundreds of other hyper-luxuries would benefit the many and impact the few. If you can afford a third home, a fourth holiday, or a private chef, you can afford to pay a lot more in taxes.FishPappPeople want services, but not taxesThe problem, as I see it, is that people want a nice country. They want public services, clean streets, no potholes in the roads, healthcare, police, fire brigade, etc. But they don’t want to pay for it. Hence why raising taxes is political suicide.ChopperBillTax property equity to cool the marketThey could tax property equity – it would lower house prices, making them more affordable. The owners won’t be going anywhere for the sake of a few percentage points. But it needs bravery and vision. What the UK lacks is someone capable of selling it to the public.NotRedorBlueSome of the comments have been edited for this article for brevity and clarity.Want to share your views? Simply register your details below. Once registered, you can comment on the day’s top stories for a chance to be featured. Alternatively, click ‘log in’ or ‘register’ in the top right corner to sign in or sign up.Make sure you adhere to our community guidelines, which can be found here. For a full guide on how to comment click here. More

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      in UK Politics

      Rachel Reeves U-turns on plan to cut Isa limit to £4,000

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      Rachel Reeves has confirmed she will not reduce the £20,000 annual limit for individual savings accounts (Isas) in a move set to benefit savers across the country. The chancellor had faced pressure from banks not to press ahead with plans to cut the limit in a bid to kickstart growth, which is one of the government’s key objectives.Earlier this year, Emma Reynolds, the economic secretary, pointed out that “hundreds of billions of pounds in cash Isas” were preventing money from being invested in the London Stock Exchange, fuelling speculation that the annual limit could be cut.But Ms Reeves told the BBC: “I’m not going to reduce the limit of what people can put into an Isa, but I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings.“And at the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people. But I absolutely want to preserve that £20,000 tax-free investment that people can make every year.”Cash Isas, which are held by 18 million people, who added a combined total of almost £50bn to them last year, allow households to save without paying income tax on the interest.Chancellor of the Exchequer Rachel Reeves attends a reception for UK and EU businesses in Downing Street, London. Picture date: Monday May 19, 2025. More

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      in US Politics

      Republicans are attacking childcare funding. Their goal? To push women out of the workforce | Moira Donegan

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      Last month, the White House issued a proposed budget to Congress that completely eliminated funding for Head Start, the six-decade-old early childhood education program for low-income families that serves as a source of childcare for large swaths of the American working class.The funding was restored in the proposed budget after an outcry, but large numbers of employees who oversee the program at the office of Head Start were laid off in a budget-slashing measure under Robert F Kennedy Jr, the head of the Department of Health and Human Services. On Thursday, Kennedy said funding for the program would not be axed, but more cuts to childcare funding are likely coming: some Republicans have pushed to repeal a five-decade-old tax credit for daycare. The White House is entertaining proposals on how to incentivize and structurally coerce American women into bearing more children, but it seems to be determined to make doing so as costly to those women’s careers as possible.That’s because the Republicans’ childcare policy, like their pro-natalist policy, is based on one goal: undoing the historic gains in women’s rights and status, and pushing American women out of the workforce, out of public life, out of full participation in society – and into a narrow domestic role of confinement, dependence and isolation.The New York Times reported this week that the White House is now not only looking for ways to make more women have children, but to encourage “parents” to stay home to raise them. “Parents” here is a euphemism. Roughly 80% of stay-at-home parents are mothers: cultural traditions that encourage women, and not men, to sacrifice their careers for caregiving, along with persistent wage inequalities that make women, on the whole, lower earners than their male partners, both incentivize women, and not men, to drop out of the workforce and stay home when they have children.This state of affairs has been worsened by the dramatic rise in the cost of childcare, which is prohibitively expensive for many parents. The average cost of childcare per child per year in the US is now well north of $11,000, according to Child Care Aware of America, an industry advocacy group. In major cities such as New York, that price is significantly higher: from $16,000 to $19,000 per year. Existing tax credits need to be expanded, not eliminated, to reduce this burden on mothers and their families and to enable women to join the workforce at rates comparable to men and commensurate with their dignity and capacities. Currently, 26% of mothers do not engage in paid work, a figure that has barely budged in 40 years. Largely because of the unequally distributed burdens of childcare, men participate in the paid labor force at a rate that is more than 10% higher than women.One might think that the solution would be to invest more in high-quality childcare, so that providers could open more slots, children could access more resources, and women could go to work and expend their talents in productive ways that earn them money, make use of their gifts and provide more dignity for women and more stability for families. This is not what the American right is proposing: Brad Wilcox, a sociologist who promotes traditional family and gender relations, has called such policy initiatives “work-ist”. Conservatives are proposing, instead, that women go back to the kitchen.The Trump administration, and the American right more broadly, wants the rate of women’s employment to be even lower, because it is advancing a lie that women are naturally, inevitably, uniformly and innately inclined to caregiving, child rearing and homemaking – and not to the positions of intellectual achievement, responsibility, leadership, ingenuity or independence that women may aspire to in the public world. “We cannot get away from the fact that a child is hardwired to bond with Mom,” says Janet Erickson, a fellow at the rightwing Institute for Family Studies, who once co-authored an op-ed with JD Vance calling on “parents” to drop out of the workforce to raise children. “I just think, why should we deny that?”This kind of vague, evidence-free gesturing toward evolutionary psychology – the notion that babies are “hardwired” to prefer mothers who are not employed – is a common conservative tick: a recourse to dishonest and debunked science to lend empiricism to bigotry. There is in fact no evolutionary reason, and no biological reason, for mothers, and not fathers, to abandon independence, ambition or life outside the home for the sake of a child. The only reason is a sexist one.Over the past decade, the left launched few vigorous defenses of a feminist politics that seeks to advance and secure women’s access to public life, paid work and fair remuneration. The American left has launched vigorous criticisms of the “girlboss”, a figure of malignant female ambition who seemed to make the exploitations of capitalism more offensive by virtue of her sex, and it has instead offered critiques of women’s ambition and romantic defenses of the labor of “care” that just happens to overlap with women’s traditional – and traditionally unpaid – roles in the home. This leftwing rhetoric has at times mirrored the similar romanticization of the unpaid housewife of yesteryear from the right, which has embraced tradwives, homesteading fantasies and an aestheticized rustic simplicity that aims to contrast feminist gains in the workforce with a fantasy of women’s rest. Together, these strains of rhetorical opposition to women in the workforce have made anti-feminism into a new kind of “socialism of fools” – a misguided misdirection of anger and resentment at the rapaciousness of capitalism towards a social justice movement for the rights of an oppressed class.skip past newsletter promotionafter newsletter promotionBut what is on offer from the political right is not about the refashioning of work and life to be less extractive and exploitative for women, and particularly for mothers. It is instead about a sex segregation of human experience, an effort to make much of public life inaccessible to women. Combined with the right wing’s successful attack on the right to abortion, the Trump administration’s dramatic cuts to Title X programs that provide contraceptive access, and the rescinding of federal grants aimed at helping working women, what emerges from the rightwing policy agenda is an effort to force women out of education, out of decently paid work and into pregnancy, unemployment and dependence on men.Theirs is an effort to shelter men from women’s economic competition, to revert to the regressive cultural modes of an imagined past, and to impose an artificially narrow vision of the capacities, aspirations, talents and desires of half of the American people.Murray Rothbard, the paleoconservative 20th-century economist whose ideas have had a profound influence on the Trumpist worldview, once vowed: “We shall repeal the 20th century.” As far as the Republican right is concerned, it seems to want to repeal the gains of 20th-century feminism first.

      Moira Donegan is a Guardian US columnist More

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      in US Politics

      This Mother’s Day, lets talk about why birth rates are really declining | Katrina vanden Heuvel

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      Mother’s Day is here, and while Donald Trump may seem an unlikely celebrant of the occasion, his administration has recently floated several proposals to incentivize motherhood – or, more accurately, giving birth. There’s the $5,000 “baby bonus” for every American mother, free classes educating women on their menstrual cycles and a National Medal of Motherhood for moms who have at least six children. (Want to guess which regime also awarded such a medal?)As usual, the president has offered ridiculous solutions to a very real problem. He’s certainly right that every American should be able to afford to raise children, and that programs like social security depend on stable demographics. But of course, every other action he has taken to undermine gender equality would suggest that this sudden interest in the wellbeing of mothers is less than sincere. That’s exactly why progressives have an opening to break up what the Republican party believes to be its ideological monopoly on pro-family policies.The roots of the fertility crisis engage the bread-and-butter issues that have long been the domain of Democrats. US birthrates have hit a record low not because the nation has become “almost pathologically anti-child”, as JD Vance asserted to the New York Times. Instead, surveys have shown that would-be parents want to own a home, repay student debt and have money for childcare before starting a family. Yet the average age of a homebuyer has climbed to 56, almost double what it was 40 years ago. And 43% of young people currently carry student debt, compared with 28% in 1993. The problem isn’t lack of interest – it’s too much interest being paid on record high loans.But most of the Trump administration’s floated fixes are unoriginal swipes from the undemocratic leaders they admire. In 2017, Vladimir Putin declared a “Decade of Childhood in Russia”, an innocent name for a program that calls for everything from defending so-called family values to encouraging conjugal trysts during workplace coffee breaks to censoring “childfree propaganda”. Meanwhile, Viktor Orbán has dedicated 5% of Hungary’s GDP to pronatalist policies, which include nationalized IVF services and lifetime tax exemptions for mothers with three children. These men are carrying on an authoritarian tradition begun by the original strongman, Benito Mussolini, whose “Battle for Births” portended literal battles that decreased Europe’s population by 20 million people.That’s why those who really care about real solutions would be wise to start offering their own plans, and, in fact, some already have. What the Trump administration didn’t plagiarize from autocrats, they took from progressives, which is why “baby bonuses” sounds an awful lot like the “baby bonds” proposed in 2021 by Senators Tammy Baldwin and Cory Booker and Representative Ayanna Pressley. The legislation would put $1,000 in a savings account at birth for every American child. The Biden-era American Rescue Plan also almost doubled the child tax credit, which nearly halved the child poverty rate. Though making that expansion permanent received bipartisan support, it was ultimately killed by the centrist triangulating of Joe Manchin.Four years later, Democrats have the chance to embrace a genuinely progressive agenda that doubles as a pro-family platform. Bernie Sanders has long called for cancelling all student debt, Elizabeth Warren has campaigned for universal childcare, and Alexandria Ocasio-Cortez was among the first politicians on Capitol Hill to offer three months of paid parental leave to her entire staff. The Congressional Progressive caucus has also called for a whole raft of policies that would lower the cost of living, from expanding Medicaid to investing $250bn in affordable housing. They understand that real relief will come not from handing out medals but from having the mettle to fight for working families.Still, even if Democrats manage a progressive populist revival not seen since Franklin Delano Roosevelt, it probably wouldn’t be enough to lift birthrates. In social democracies like Finland and Sweden – which offer 13 months of paid parental leave and cover 90% of preschool costs, respectively – fertility remains below replacement levels.Does that indicate the problem may be more fundamental? One sociologist, Dr Karen Benjamin Guzzo, has attributed this dilemma to apprehension: “People really need to feel confident about the future.” But whether it’s 60% of young people feeling very worried about the climate crisis, or 80% of new mothers feeling lonely, or 90% of voters feeling that American politics is broken, the state of the world doesn’t seem too conducive to domestic bliss. The right’s response to this anxiety is embodied by Elon Musk, who keeps siring children with women he meets on X to create a “legion-level” brood “before the apocalypse”.To help avert said apocalypse, what should be on offer are authentically family-friendly policies that benefit parents and non-parents alike. In doing so, there’s a chance to persuade Americans that the next generation still might have a brighter future than the last. Or, at the very least, that progressives have a more compelling vision for American families than the one whose budget is about to take billions from children’s education, food and healthcare.It’s one thing to incentivize giving birth. Americans deserve leaders who will fight for those kids after they’re born.

      Katrina vanden Heuvel is editorial director and publisher of the Nation. She is a member of the Council on Foreign Relations and has contributed to the Washington Post, the New York Times and the Los Angeles Times More

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      in US Politics

      The Guardian view on the IMF’s warning: Donald Trump could cost the world a trillion dollars | Editorial

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      Wake up! When the most sober of global institutions, the International Monetary Fund, abandons its usual technocratic calm to sound the alarm on the political roots of global financial instability, it’s time to pay attention. The IMF is warning of a non-negligible risk of a $1tn hit to global output, as Donald Trump’s erratic “America first” agenda – part oligarchic enrichment scheme, part mobster shakedown – collides with a perfect storm of global financial vulnerabilities.Such a shock would be equivalent to a third of that experienced in the 2008 crisis. But it would be felt in a much more fragile and politically charged environment. This time, the crisis stems not just from markets but from the politics at the heart of the dollar system. The IMF’s latest Global Financial Stability Report sees the danger in Mr Trump’s trade policies, especially his “liberation day” announcements, which have pushed up America’s effective tariff rate to the highest in over 100 years.The IMF put investors on notice that Trumpian volatility was taking place as US debt and equities – especially tech stocks – were overvalued. It cautions that hedge funds have made huge bets that have gone sour, requiring them to sell US treasuries for cash and potentially deepening the chaos in bond markets. Ominously, the IMF draws the comparison, first made by the analyst Nathan Tankus, with the “dash for cash” in March 2020 during Covid, when the Federal Reserve rescued US treasury markets directly. Developing nations, already grappling with the highest real borrowing costs in a decade, may now be forced to take on even more expensive debt – the IMF warns – just to cushion the blow from Mr Trump’s new tariffs, risking a dreaded “sudden stop” in capital flows.At the heart of this chaos stands the US, the very country meant to uphold the global financial architecture. Just over a week ago, Adam Tooze of Columbia University wondered if markets had begun to “sell America” after US long-maturity bond prices fell precipitously. He thought that markets were no longer just responding to economic fundamentals but to politics as a systemic risk factor. In this case: Mr Trump’s tariff threats and his increasing political pressure on Fed’s chair, Jerome Powell. In essence, Prof Tooze gave us the theory; the IMF just confirmed the data.The US president’s continued attacks on the Fed chair over the weekend have only added to a flight from US equities, bonds and the dollar itself. The money is fleeing to safe havens such as gold. Some of the loss has been clawed back, but at what cost? Investors aren’t just jittery about inflation or growth – they’re hedging against political chaos. That might explain the seemingly divergent IMF messaging: blunt systemic warnings in its report versus the soothing market-facing comments from a senior official at the fund’s press conference. This is central bank diplomacy. The institution is signalling that it is worried while trying not to spark a self-fulfilling panic in treasuries and the dollar.The real concern here is not technical dysfunction in treasury markets or the mechanics of the Fed, which are the bedrock of the global financial system. It’s about the politicisation of the monetary-fiscal nexus under a Trumpian regime that is fundamentally hostile to the norms of liberal-democratic governance. When even the dollar is no longer a safe haven, what – or who – can be?Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

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      in US Politics

      Trump’s very beautiful tariffs will fix America, masculinity and the family. It said so on Fox News | Arwa Mahdawi

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      There’s been a lot of doom-mongering about tariffs recently, hasn’t there? Oh no, my life savings are going to get wiped out and I’m never going to be able to retire! Oh no, grocery prices are going to triple! Oh no, it looks suspiciously as if Donald Trump has used ChatGPT to guide his fiscal policy and now we’re going to see another Great Depression! Moan, moan, moan.While it might be true that much of these predictions are coming from highly credentialed economists and people who tend to know what they’re talking about, I’d like to remind you that there are two sides to every story – and it’s always worth looking at both of them. You’ve already heard from voices who reckon Trump’s tariffs are misguided and dangerous. Now it’s time to focus on the people who support the president’s assessment that tariffs are a “very beautiful thing” that will usher in a new golden age.Where do we find such people? Fox News, of course. The place where up is down, left is right, and Oceania has always been at war with Eastasia if King Trump says that’s the case. As the stock market plunges, Fox News has wheeled out a bunch of pundits and anchors to explain how your savings getting obliterated is a good thing, actually.First, there’s Fox News host Jesse Watters, who is known for making thoughtful and nuanced statements such as: “When a man votes for a woman, he actually transitions into a woman”; and announcing that men shouldn’t eat soup in public because it isn’t “manly”. In a recent segment, Watters said that these tariffs – which will make life more expensive – are actually “going to make it easier for people to start families”. He added: “These tariffs are for the children.” I polled my own child, who is three, on this, and she would rather have an Elsa doll than a tariff, but what does she know, eh?While Watters believes the children are our future, and tariffs will help them lead the way, Free Press columnist Batya Ungar-Sargon reckons Trump’s economic policy is going to fix the “crisis of masculinity”. On Sunday, Ungar-Sargon told Fox News that the US had “shipped jobs that gave men who work with their hands for a living, and rely on brawn and physicality, off to other countries … and imported millions and millions of illegals to work in construction, manufacturing, landscaping, janitorial services – jobs that used to give men access to the American dream.”Ah yes, as the old adage goes: if you’ve got nothing intelligent to say, go on Fox News and demonise immigrants. There are in fact plenty of jobs available in the US that rely on “brawn and physicality”; the problem is many of them wreck your body and don’t pay a living wage. You know the workers who cut quartz slabs for kitchen countertops, for example? They’re predominantly young Latino men who are said to be suffering from lung disease because of the silica dust created by cutting said slabs. Meanwhile, construction workers are more likely to die of a drug overdose than those in any other occupation because the physical nature of the work results in an increased likelihood of injury and the subsequent prescription of addictive opioids. Romanticising these sorts of jobs – particularly when your own job consists of typing on a computer – does absolutely nothing to help men.As I said, it’s always important to look at both sides, even if one side of an argument appears completely demented. Still, I’m squinting very hard and I’m afraid that, despite Ungar-Sagon and Watters’s very persuasive arguments, I can’t see an upside to tariffs. Let’s say that more manufacturing jobs do open up in the US (a process that would take years). It seems unlikely Trump would fight for them to come with decent wages – he recently rescinded one of Joe Biden’s executive orders that raised the minimum wage for federal contractors. I’m not sure doing hard labour for a low salary gives you access to the American dream, unless your dream is going bankrupt from medical bills.But look at me: moan, moan, moan. You know what I’ve just realised my problem is? I think I need to watch more Fox News. And, if you’re feeling down about the state of the world, then you may need to, too. Now that Trump has started posturing over Iran, I can’t wait for Fox pundits to explain how accidentally inviting a nuclear war is going to be great, actually. Nothing like a little bit of radiation poisoning to fix the crisis of masculinity. More

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      in US Politics

      Who will win bigly from Trump tariffs? | Brief letters

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      After Donald Trump raised a range of tariffs, the US stock market tanked (Report, 4 April). If Trump rescinded these, within weeks the stock market would bounce back. Wouldn’t it be interesting to know in advance when that was going to happen? Somebody could make a great deal of money.John KinderRomsey, Hampshire In the past, we referred to the ABC of the cost of living crisis: Austerity, Brexit, Covid. Now, it seems, we have to add D for Donald and E for Elon. I don’t want to think about what F might stand for.Ruth EversleyPaulton, Somerset Re your article (‘She treats everyone with a deep growl’: can you train an angry cat to be more sociable?, 30 March), sometimes it just requires patience: in his 20th year my adopted feral cat Twix finally gave up being antisocial and climbed on to my lap for a cuddle, and there he remains at every opportunity, living his best life.Rosemary JacksonLondon Re your report (Birmingham declares major incident over bin strike as piles of waste grow, 31 March), we can now acknowledge that, like medical staff, binmen are essential frontline workers, without whom public health collapses? The solution to the impasse? Attlee got it right. Stuff their mouths with gold.Jenny MittonSutton Coldfield, West Midlands I hadn’t noticed seat heights on Mastermind (Letters, 1 April) but I comment every week to my wife about the amount of manspreading, to the extent that when we board a bus or train, we often say quietly to each other: “A few potential Mastermind contestants here.”Ray JenkinCardiff More

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      in UK Politics

      How could Donald Trump’s tariffs affect UK households and their finances?

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      Foreign Secretary David Lammy has said people across the country are “very concerned” about how the move by the United States to place 10 per cent import taxes on goods would hit their own finances.Here is a look at how households may find their finances could be affected:What about prices in shops?Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The impact on prices isn’t nailed on at this stage.“There are a number of forces that could keep a lid on inflation. Worries about growth around the world mean central banks may keep interest rates as low as possible in order to support whatever growth is around.”Fluctuations in sterling against other currencies will have an impact on prices.Ms Coles said: “We might also see some of the goods that were destined for the US being diverted elsewhere around the world – including the UK.“If it means a glut, it could mean there are some decent bargains around. Plus, some companies will want to hold prices lower, in order to compete more effectively against US businesses, so we could benefit from that.President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House in Washington (Mark Schiefelbein/AP) More