The answer is one you wouldn’t even guess unless you have a working understanding of the finance market. I’ll give you a quick thumbnail of what I think is happening.

Everyone knows we have a large national deficit. In order to reduce it, Trump and DOGE are eliminating waste, fraud and abuse that is systemic. That’s one part of what’s needed. The other part is reducing the rates on bonds which finance the debt. Bond yields go down when more customers buy them. Why do they buy them? Mainly for safety. They carry the full faith and credit of the U.S. government.

Key to selling more bonds and lowering their yield(the interest paid) is a downturning economy. Just the mention of a possible recession cause big banks, brokerages, foreign countries to sell stocks and buy bonds. Typically stocks plunge in a recession so investors flee to bonds even as the yield goes down because they are less risky than stocks.

As yields drop, the cost of financing the debt drops. This year the government has a large amount of bonds maturing. If the rates drop a point, hundreds of billions of dollars are saved. That savings along with the DOGE savings is big in terms of setting us up for the future.

So why did we not cut this budget? Because it kept a recession front and center and it allowed the government to stay open and thus allow Trump to continue his work. Remember, he wants to balance the budget, enact tariffs, do away with income taxes for people who earn $150k or less plus a host of other things to MAGA. The next budget will look far different as these cost savings take hold.

This is what Trump meant when he said there will be some pain in the beginning but things will quickly improve thereafter.