'Military adventures cost money': Economists' key concern about Trump's Venezuela action is how it weakens $38 trillion national debt picture | Fortune

"With the United States in debt to the tune of $38 trillion, President Trump has decided now is the time for the White House to also 'run' another country. While the U.S. will not incur the costs needed to keep Venezuela's economy moving, the action taken over the weekend will no doubt come with price tags attached. This, says UBS, will be a key concern for investors evaluating the risk premium for U.S. debt going into 2026."

"America's fiscal trajectory, namely its debt burden, has been a growing concern for the likes of JPMorgan's Jamie Dimon and Federal Reserve Chairman Jerome Powell, as well as droves of economists and Wall Street analysts. These concerns are made sharper by recent changes to Trump's tariff policies, some of which he has recently delayed. In the face of increased outlays, the Oval Office is also reducing its income."

"At UBS this morning, chief economist Paul Donovan highlighted that the delay to new tariffs comes as the latest political lightning rod-affordability-continues to concern the electorate. Speaking in an audio note to clients, he added: "Reducing tariffs is a fiscal stimulus; delaying tariffs is a delayed fiscal tightening in the States, which has some marginal growth implications. It's also important in its implications for the size of the U.S. fiscal deficit.""

United States federal debt is about $38 trillion and new U.S. intervention in Venezuela will create additional fiscal costs without U.S. financing for Venezuela's economy. Planned tariff increases for upholstered furniture, kitchen cabinets, and vanities have been delayed by one year, postponing expected revenue. Reduced tariff income combined with higher outlays will widen the fiscal deficit and increase investor scrutiny of the U.S. debt risk premium heading into 2026. Reducing tariffs functions as fiscal stimulus, while delaying tariffs amounts to delayed fiscal tightening with marginal growth implications and effects on deficit size. A fiscal deficit is the shortfall between a government's spending and its revenue.

Read at Fortune