Post-Trump Recession Odds Plunge
Left-wing media is doing everything they can to talk Americans into a recession.
With Donald Trump set to return to the White House in less than a week, legacy media is falling over itself to predict economic disaster.
US News asks "Will Trump's Policies Spark a Recession."
Newsweek asks "Will there be a recession?"
The Boston Globe answers: "Trump's plans promise another Great Recession."
Media’s Recession Fixation
Of course, they've been at this since Trump won. Just 4 days after the November election the Associated Press ran an article callled "Frustrated Americans await the economic changes they voted for with Trump."
What makes the whole exercise hilarious is that actual recession odds immediately plunged as soon as Trump won.
Betting site Kalshi's odds of a recession by the end of 2025 went from 53% the day before the election to just 18% today.
Given Trump was 50/50 before the election, that implies the odds of recession if Kamala had won were perhaps 80%.
But, sure, Trump's policies did it.
The Mess Biden Left
Now, 18% odds is still pretty tight. In recent videos I've talked about the mess Biden's leaving Trump -- the $2 trillion deficit, the nearly $7 trillion in spending, shrinking jobs for native born Americans and wages that have spent years underwater, failing to keep up with inflation.
The challenge for Trump is getting his pro-growth policies -- tax cuts, spending cuts, regulatory cuts, and drill baby drill -- in place fast enough to take the wind out of the sails of Biden's stagflation.
This was always going to be tricky, especially the spending cuts which reduce GDP in the short term but grow the economy ten-fold in the long-term.
2016 vs 2024
Still, Trump's been here before: in 2016 the economy was also circling the drain to recession as the anemic Obama recovery from 2008 was running out of steam.
Trump turned that into the greatest economy since Reagan.
Of course, a lot has changed since 2016.
We've nearly doubled the national debt -- it went from 20 trillion to 36 in just 8 years.
We nearly tripled debt interest, which is now over a trillion a year in interest alone.
Meanwhile, all that extra government spending drove an apparently permanent doubling of the federal government, which grew from 3.9 trillion in spending in 2016 to nearly $7 trillion today.
The reason for the growth of government, of course, was Covid spending that, like all crises, stuck around long after the crisis was done, absorbed by the usual suspects of the activist-donor complex.
We see this in war, we see it in financial crises, and apparently it happens in pandemics.
What’s Next
For Trump to avoid recession the solution's easy, at least on paper: Repeat Trump 1.0 but harder. Meaning cut taxes, cut regulations.
And for long-term growth at short-term cost, even cut spending.
On taxes Trump’s already floated cuts to small business tax, and zero tax on overtime, tips, and social security. In fact he's questioned the entire income tax.
On regulations, last time Trump cancelled about 8 regulations for every new one.
But between DOGE and recent deregulatory Supreme Court Decisions he could to tenfold — maybe a hundred-fold.
Finally, the big one: Slash the federal government.
Many of us are old enough to remember 2016, and it didn't seem like a government at 3.9 trillion was starved. We still had fireman, social security, and even national parks in 2016.
In fact, you could make the case that today’s federal government spending 7 trillion is doing worse: it can’t run FEMA, it can’t catch terrorists, it certainly can’t educate kids.
Elon's already floated 2 trillion in cuts, maybe we should make it 3.
In the meantime, you can bet the media's favorite words in 2025 will be “Recession” as they try to sabotage every Trump effort to fix the half-broken economy Biden gave him.
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Interesting viewpoint - thanks. It's really hard to predict the economy - there are so many opposing forces. Many of the new proposed policies are, like you said, good in the long term, but not so good in the short term. For example, laying off thousands of federal employees would be great for the long term, but it would sure increase unemployment in the short term, which would be a force for recession. In fact, any decrease in spending and subsidies, although the right thing to do, will be recessionary in the short run. I might miss out on further stock gains, but at my age (83) I'd better stick with conservative, fairly priced companies that pay dividends, and try to play it safe.
Excellent post , appreciate your work.