Economic Fears: Is a Trump Recession Inevitable?
Welcome to another episode of “Morning Coffee with Professor Alex.” So, how do you feel about the current economic and political climate, roughly a month into President Trump’s administration? Are you ready for a Trump recession?
I know it feels like more than that, but do you feel comfortable with the direction of the country? How do you feel about the mass firings and potential data leaks of our private information with Social Security because of Elon Musk and DOGE? What about the tariff war, as now President Trump wants to issue a 25% tariff on the car industry?
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Will President Trump Cause a Recession?
Are you any safer or richer, or have your bills increased? How is business? Do you feel as if your job is on the line? Every day, we seem to be a step closer to what seems inevitable—a Trump recession, maybe even worse than the Great Recession, that would affect us for years to come.
Look around. What have you personally noticed? Do things look and feel the same, or different? For example, is your favorite bottle of wine $5 more expensive? Are things slower at work? Maybe you work in retail or have visited the local mall? Was there less foot traffic than normal?
Maybe you are a farmer concerned about the $2 billion in USAID lost, or you have seen farmers posting videos on social media, concerned they are about to lose the family farm that they have had for generations?
Do you feel safe now, thanks to President Trump’s mass deportation plans? Do you feel you can safely walk the streets at night? What has changed?
The IRS had its doors knocked on by DOGE. Is that good or bad? More than 200,000 federal probationary employees in the federal government have been fired without cause, due process, reason, or even common sense.
Those 200,000 families are now worried about their mortgages and next paychecks. Their kids might be in private schools, impacting those schools, employees, and revenue. Vacation plans with spring break around the corner might be canceled as people try to reduce spending, all of it impacting the economy, especially since we live in a consumption economy.
Are you concerned? Worried? Scared? Many are, and they have the right to be. Maybe the Great Recession is long forgotten, but it’s not for me. As a bankruptcy lawyer, I dealt with foreclosures and divorces, which spiked during that time. I remember clearly the anxiety of my clients, and yet, we might experience this again because of a Trump recession.
During the Great Recession, I remember when a couple was losing their home to foreclosure, the financial stress led to arguments and ultimately, divorce. I see the same thing happening now. If one spouse voted for President Trump and the other didn’t, and things go bad economically, how can that argument be avoided?
I haven’t seen any credible economist say prosperity lies ahead. There’s a potential 25% tax starting April 2nd on the auto industry. I had to replace my wife’s car after Hurricane Helene, as it was a total loss. But imagine the hurricane came after the Trump tariffs. Then I would be paying 25% more for the same car.
Now I’m looking at a carport for my travel trailer, and the price is $2,145 more if I don’t hurry up and buy it. But is now the time to spend thousands of dollars on a luxury? Is this what you voted for?
Tell me one thing that has put more money in your pocket if you’re not in the top 1% financially. You could say it’s only been a short time, but how many executive orders have been signed by President Trump that help you financially? Which one has helped you personally or the economy?
So, how do you feel? Are things any different? Do you see less business and less revenue? Over the last four weeks, have you noticed anything different? I’ve seen on social media that farmers are concerned, but did we forget already the spike in bankruptcies for farmers during the first Trump presidency and his tariffs on China and Mexico? Why would anyone think it’ll be different this time? It will be worse. It’s chaos. Buckle up.
All this chaos creates political and financial instability. Other countries might prosper from our downfall if we stop consuming due to an economic fallout. Those countries might benefit from deflation.
For example, because there is an increase in supplies if the United States stops consuming, those products have to be sold at a lower price, benefiting other countries. So, will other countries benefit from deflation, while we face inflation.
As we continue to deal with chaos, remember that chaos creates political instability, which in turn creates financial instability. You need to be prepared financially. Don’t be caught off guard!
Tough times are probably ahead, but it’s important to be informed, now more than ever! Enjoy your coffee.
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