Bloomberg: Trump Is Preparing the U.S. for a War Economy

According to Bloomberg, the U.S. is set to unveil the draft budget for fiscal year 2027, with a focus on significantly increasing military spending. The plan aims to redirect funds toward the military by cutting expenditures on healthcare and certain domestic welfare programs. If adopted, this budget draft would effectively mark the beginning of a long-term shift in the U.S. economy toward a sustained military confrontation model.

Micro-commentary

The core of the budget involves raising defense spending from its current level of less than $1 trillion to $1.5 trillion—a surge of one-third.

For a potential conflict specifically targeting Iran, the Pentagon has already urgently requested $200 billion in funding; daily war costs are estimated at up to $1 billion per day. This proposed budget would free up resources for military spending by cutting domestic programs such as healthcare and scientific research.

To avoid political suicide, the 2027 budget proposal preserves Social Security and Medicare as untouchable items. However, Medicaid and other health-related programs face significant risks of cuts.

The ongoing conflict with Iran has already driven up oil prices, pushing U.S. inflation expectations to 3.1%; meanwhile, America’s national debt is approaching $39 trillion, creating massive fiscal deficit pressures. A similar austerity plan was previously rejected by Congress last year. Additionally, Trump’s proposal to distribute $2,000 tariff dividends to citizens to offset the impact on living standards faces resistance within his own party, with some Republicans preferring to use the money to reduce the deficit instead.

Although the budget reflects a strong “guns versus butter” orientation, it is not yet a true “wartime economy.” Current measures do not constitute full mobilization. Rather, they resemble a restructuring of the fiscal system aimed at preparing for prolonged military confrontation—an even riskier political gamble. Under the dual pressures of midterm elections and inflation, whether this “quasi-war budget” can pass through Congress, and whether the U.S. economy can withstand the pain of such a transformation, remain large unknowns.

Original article: toutiao.com/article/1861426630456320/

Disclaimer: This article represents the personal views of the author