President Donald Trump’s recently signed economic package—dubbed the “Big, Beautiful Bill” (BBB)—has been hailed by some in business circles for its tax breaks, but experts argue it could be one of the most economically damaging policies in U.S. history. While short-term gains may please markets, the long-term consequences of this policy could reshape global capital flows, undermine U.S. competitiveness, and fuel inflation.
The Logic Behind the Bill: Trickle-Down Revisited
The BBB relies heavily on trickle-down economics, a strategy centered on the belief that tax breaks for the wealthy and corporations will spur job creation and economic growth. History, however, offers little support for this theory. Previous tax cuts—especially during Trump’s first term—largely fueled corporate stock buybacks instead of real investment, contributing to inequality without driving significant growth.
The current bill extends tax loopholes for private equity (including carried interest provisions) and offsets these benefits by slashing major social programs like Medicaid and SNAP (food stamps). Ironically, these cuts will disproportionately harm Trump’s own MAGA voter base, many of whom reside in red states.
A Political Gamble with Economic Risks
The BBB presents a political litmus test: will MAGA supporters turn on Trump when their safety nets are stripped away while inflation and healthcare costs soar?
If not, the U.S. may be entering a darker phase of politics where economic self-harm is tolerated for the sake of ideological loyalty. If yes, Democrats could use this opportunity to propose more balanced, progressive economic policies—provided they avoid extreme populist rhetoric and focus on sustainable reforms.
Jay Pelosky: How to Trade a Flawed Bill
According to TPW Advisory’s Jay Pelosky, the BBB positions the U.S. as an even larger global debtor, with projected deficits of around 7% of GDP for years to come. The bill is regressive, anti-growth, and inflationary, especially when combined with Trump’s tariff threats—like the proposed 50% duty on copper.
This rising U.S. debt, now surpassing $36 trillion, depends on continued foreign demand for dollars. But this appetite may be fading. Trump’s “America First” policy and erratic trade tactics have pushed Europe and Asia to take defensive economic measures, from reshoring supply chains to ramping up domestic industrial strategies.
A Tri-Polar World is Emerging
Pelosky’s “Tri-Polar World” (TPW) thesis envisions global economic power splitting into three major blocs: the Americas, Europe, and Asia. This trend, accelerated by COVID-19 and geopolitical tensions, is manifesting in:
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Europe investing heavily in defense and AI, with Germany leading large-scale fiscal spending.
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Asia shifting focus to domestic demand rather than exports, as China tries to boost consumption and stabilize production.
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The U.S., paradoxically, becoming more reliant on foreign capital while discouraging foreign investment through unpredictable policy.
These developments also suggest a shift toward regional currencies. The euro and the renminbi are gaining ground as global reserve alternatives, potentially weakening the dollar’s dominance.
The Market Outlook
This global divergence sets the stage for a secular shift in investment leadership away from the U.S. Pelosky argues the most promising opportunities now lie in:
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Emerging markets: With weaker dollars, their central banks gain flexibility to cut rates without triggering currency crises.
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Global equities: Especially in Europe and Asia, where capital is being reinvested locally for growth.
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Commodities: Gold has already broken out; copper and energy are following suit.
Conclusion: Time to Look Beyond the U.S.
Trump’s BBB may offer near-term stock market highs, but it cements long-term structural weaknesses in the U.S. economy—rising debt, dependence on foreign capital, and worsening inequality. Meanwhile, Europe and Asia are laying the groundwork for a new era of regional resilience and leadership in global markets.
For investors, the message is clear: diversify across global equities, currencies, and commodities—and prepare for a world where America is no longer the only game in town.
