On the menu today: The easy thing to do, upon seeing the news that Texas Senator Ted Cruz is exploring a potential presidential bid in 2028, is to scoff and point to him being booed on ESPN’s College GameDay and run with the popular narrative that nobody likes Cruz. But a year is a long time in politics, and by this time next year, Republicans will probably have had a presidential debate or two. Also by this time next year, we will probably have a Democrat-controlled U.S. House of Representatives, perhaps a Democrat-controlled U.S. Senate, and President Trump’s job approval rating will probably still be around where it is right now — 40 percent or so. What’s more, once Democrats have some influence over the federal spending process, long-dormant fiscal conservative instincts tend to rejuvenate in Republicans. No matter what other issues Republican candidates want to run on in 2028, America’s worsening finances will be front and center because of how they tie to the ever-increasing cost of living. Read on.
Better Off Ted
Texas Senator Ted Cruz says he won’t talk about a presidential bid until after the midterms. But earlier this month, the Wall Street Journal reported Cruz “quietly asking people if they would be interested in working on his 2028 bid, according to people familiar with the requests.”
Vice President JD Vance is still the favorite to be the 2028 nominee. His status in his current role offers him unparalleled advantages — the spotlight every day he wants it, an extensive fundraising network, connections to every state party. Vance proved on the trail in 2024 he’s a talented debater and can give a good speech. Usha Vance is a major asset, and an instant rebuttal to the hideous racism and xenophobia from the likes of Bo French.
But unless you want to credit Vance with the 2024 Trump victory, the vice president has won exactly one general election race in his life, his 2022 Senate election, winning by six percentage points when the top of the ticket, Mike DeWine, was winning by nearly 25 percentage points.
Things can change quickly in American politics, particularly over a year or two. Two years ago, Republicans and Trump were riding high. Some GOP leaders believed that Latinos had shifted permanently toward their party. Recent polling indicates that demographic has flipped back, particularly in Texas.
Republicans are going to have a lousy midterm cycle, and maybe a particularly bad one.
And if it goes as badly as some suggest, will the Republican presidential primary voters of 2028 in places like Iowa, New Hampshire, Nevada, and South Carolina still have the attitude of, “Let’s keep doing the same thing”? Or will they want to kick the tires on other candidates and test-drive some other options?
In February 2009, the cover of Newsweek declared, “We are all socialists now.” (That might seem reasonable at first glance, but they meant the country, not the magazine staff.) In April of that year, Markos Moulitsas declared that the GOP had become a “rump regional party,” irrelevant to American politics. By the end of that month, The Economist declared that Pennsylvania Senator Arlen Specter’s decision to switch from the GOP to the Democratic Party “provided the White House with a perfect opportunity to hammer home one of its favorite messages: that the Republican Party is becoming such a rump of Rush-Limbaugh-worshipping fanatics that sensible people have no choice but to back Mr Obama.”
Within six months, Republicans had won the governor’s races in New Jersey and Virginia, and the following year Republicans won 63 more seats in the U.S. House of Representatives, and six more seats in the U.S. Senate.
Fiscal conservativism is really out of style . . . right up until the moment it comes back again.
You wouldn’t bet a ton of money that Tea Party-style calls for limited government and fiscal restraint would gain traction between now and November 2028. We’ve been told that those old priorities are dead and buried, that we’re in an era of intense populist passions, with both parties more statist, more isolationist, and more libertine than a generation ago.
But nothing lasts forever.
It doesn’t really matter if an aspiring president wants to run on the issue of Haitian immigrants eating cats and dogs, or whatever social media rage-bait catnip is stirring up the influencers starting next year.
The next president is going to have no choice but to confront some long-simmering and long-worsening fiscal problems, not urban legends. Social Security’s trust fund is set to run out of money by 2032. Medicare’s insolvency is expected just a year later.
There’s a message out there, for Ted Cruz or any other not-all-that-populist, traditional conservative presidential candidate who wants it: The cost of living is high because of Washington’s runaway spending.
The astronomical U.S. debt makes life more expensive for ordinary Americans in at least four ways.
One: Inflation is driven by an increasing money supply; the Federal Reserve has not hit its 2 percent inflation target in nearly five and a half years. Maybe the new Federal Reserve chairman, Kevin Warsh, will change things starting with today’s expected decision, but he’s just settling into the job. If you’re a big-spending federal government, inflation is your friend in a way, because you’re paying back your debt with dollars that are worth less than when you borrowed the money earlier. President Trump is a loud advocate for keeping interest rates as low as possible.
Two: The U.S. government is borrowing a ton of money, and it’s competing against private companies who also want to borrow money, which raises interest rates on loans. Higher rates raise costs for anything financed with credit — mortgages, car loans, business investment — which shows up in cost of living even without touching the inflation rate directly.
Three: The U.S. government will pay 1 trillion dollars in interest payments on the debt this year. When the government borrows money, it must make regular payments to keep itself afloat. This eats up the tax revenue that’s coming in. So far, our government has collected $4.85 trillion in revenue this year. Roughly 20 percent of all money coming in must go just to make payments on what we’ve already borrowed — meaning it’s not available for anything else the government wants to buy, from defense to health care.
Four: Large deficits over time eat way at public confidence in a currency; people start wondering how valuable a dollar will be next year, or five years down the road, or ten years down the road. As Ramesh Ponnuru wrote a little while back, “The dollar is the world’s reserve currency, used by governments and firms to conduct transactions, settle accounts and hold as savings.” Most economists think this gives the U.S. significant advantages; in a 2023 appearance, Vance argued the opposite, that a strong dollar makes “imports to the U.S. cheaper for American consumers and exports from the U.S. more expensive for foreign consumers. The dollar’s dominance, the thinking goes, thus contributes to larger trade deficits and suppresses manufacturing output and employment.”
As Ramesh observed, “A somewhat weaker dollar comes with costs. To favor one is to want Americans’ paychecks to be able to purchase fewer foreign goods than they can now. Americans would produce more for the rest of the world and get less in return. Whatever other benefits that would bring, it would mean less affordability.”
(In other words, a GOP presidential primary challenger to Vance can argue, with some evidence, that Vance’s policies would deliberately make the cost of living higher, in order to save U.S. jobs. Remember, Vance argued on the campaign trail in 2024, “We believe that a million cheap knockoff toasters aren’t worth the price of a single American manufacturing job.”)
On top of all that, bond markets are getting nervous about how much debt the U.S. government is carrying.
For the better part of twelve years, Republicans shrugged and stopped worrying about the debt. The result is not just a $40 trillion debt; it’s that a trillion-dollar deficit, once shocking at the start of Obama’s presidency, now looks like the good old days. Last year’s deficit was $1.7 trillion; this year’s will probably be around $2 trillion.
Ted Cruz isn’t afraid to confront Tucker Carlson, Bo French, or any other bigot within the GOP’s ranks. He thought the (Vance-negotiated) memorandum of understanding with the Iranian regime was a bad deal, and said so at the time. He opposes the president’s tariff regime. There’s a lot of long-simmering frustration with President Trump within the GOP, and someone is going to ride that in 2028.
ADDENDUM: Speaking of the 2028 race . . . why do pollsters keep listing Donald Trump Jr. as an option?