This week, the House passed the Senate reconciliation bill, sending it to the President’s desk and locking in what the Committee for a Responsible Federal Budget (CRFB) calls “the single most expensive, dishonest, and reckless budget reconciliation bill ever.”

The bill will add $4.1 trillion to the national debt through 2034—or $5.5 trillion if temporary provisions are made permanent. Under this trajectory, U.S. debt is projected to rise from roughly 100% of GDP today to 127% by 2034.

Maya MacGuineas, president of CRFB, sharply criticized Congress for passing a bill that:

  • Deepens America’s precarious debt situation.
  • Accelerates the looming insolvency of Social Security and Medicare.
  • Undermines trust in the budget process by manipulating budget scoring rules to mask the bill’s true costs.

MacGuineas warns that while the economy might enjoy a short-term “sugar-high,” the longer-term consequences will be damaging for American families, the broader economy, and future generations.

Cole Metals’ Perspective

At Cole Metals Group, we view the Committee for a Responsible Federal Budget (CRFB) as a non-partisan, credible source. They’re not political—they call balls and strikes on fiscal realities, regardless of which party is in power.

Many who support this bill argue that future economic growth will offset the cost of new borrowing, insisting that deficit projections are too pessimistic because they underestimate GDP growth. That’s a legitimate debate.

However, our perspective is this:

It doesn’t ultimately matter what one think tank or another predicts—it matters what the market believes.

If markets believe the U.S. will run significantly higher deficits, they’ll eventually demand higher interest rates to keep buying Treasuries. If the government wants to avoid those higher rates and suppress true price discovery, the Federal Reserve would almost certainly step in to buy Treasuries—effectively expanding the money supply by creating new dollars.

And that’s where gold comes into the picture.

An expanding money supply can:

  • Weaken the purchasing power of the dollar.
  • Fuel inflationary pressures over time.
  • Erode confidence in fiat currencies.

So, while there are many opinions and projections about what might happen, the only view that ultimately matters for investors is what the market believes—and how it prices U.S. debt, interest rates, and the dollar’s purchasing power. And that’s precisely why we believe maintaining some exposure to physical gold remains prudent.

Political debates will continue, but markets ultimately enforce fiscal discipline—and gold remains one of the few assets that historically preserves value when governments expand the money supply to finance growing debts.

Read the full article here.