John Diamond, director of our Center for Tax and Budget Policy and host of “The Two-Handed Economist,” analyzed the macroeconomic impacts of the One Big Beautiful Bill Act — the sprawling tax-and-spending package now signed into law by President Donald Trump — using the Diamond-Zodrow model of the U.S. economy. The results?

The package could modestly boost GDP — but the long-term benefits are limited. It will drastically increase the debt-to-GDP ratio, leading to a crowd-out of private capital and a decline in investment over time. Hear Diamond lay out the good, the bad, and the ugly in the legislation on the podcast with Baker Institute director David Satterfield.

Featured: John Diamond, Ph.D., https://www.bakerinstitute.org/expert/john-w-diamond

Mentioned in this episode:

John Diamond, “Macroeconomic Effects of the One Big Beautiful Bill Act”

Wall Street Journal Editorial Board, “The Meh Tax Bill That Has To Pass”

James Baker III and John Diamond, “DOGE Won’t Be Enough to Get the Federal Debt Under Control”

This conversation was recorded on July 2, 2025. A transcript of this episode is available here: https://bit.ly/46s24cY

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