I hope my predictions of the future are wrong.
Almost everyone except the very poor or the very rich plans for the future. Most of us need to plan and perform mundane activities, such as holding down a job, balancing our checking accounts, and keeping appointments. People who employ others must also be concerned with the financial health of their farm, restaurant, clothing store, factory, or corporation.
Most moderates and conservatives who work for a living and voted for Donald Trump believed that his administration would improve the economy and, therefore, their lives after the 2024 election. Those more concerned about the economy stand in sharp contrast to the diehard MAGA supporters, who care less about the economy and more about their cultural war with their WOKE enemies.
Most in the billionaire class benefit from Trump’s chaos because they have assets and cash. They purchase distressed properties and passively earn interest, while others incur debt. However, if their wealth is tied to the consumer economy, they will also suffer to some extent.
There are always winners and losers in the local, national, and international economies. No American political party has all the answers or solutions to our economic problems. However, a substantial number of people have recently fallen into a state of complacency. Every so often, politicians and significant sectors of our economy take their eyes off the ball, as seen during the Great Depression (starting in 1929) and the period of lax financial controls (2000-2008), which resulted in a significant economic downturn.
Those who voted for Trump for financial reasons probably envisioned something like the road on the left in the image below. They imagined and voted for a Trump-generated prosperity for themselves. They bought Trump’s closing sales pitch, which promised to reduce the federal deficit, lower interest rates, lower consumer prices, keep the economy humming, and improve the country’s standing in the global economy.
Although Trump promised to “revive the economy”, his first six months have demonstrated that the economy is more likely to head to the right into a desert than to the lush, green prosperity on the left.
Am I being dogmatically hostile or partisan with my prognostication? I don’t think so.
Trump has installed the most extreme and unqualified cabinet in America’s history. Trump’s 1 AM tweets and the lunacy of his cabinet have created political and economic chaos. It is undeniable that his cabinet consists of unqualified misfits who obey Trump as if he were a demigod. With an enterprise as large as the USA, it will take a few months for everyone to notice the forthcoming but inevitable logistical and financial problems. The stock markets and the larger economy will appear healthy until the issues become apparent.
The Tariff war started by Trump will be a significant cause of these problems. Every country in the world is openly or silently cursing Trump’s Smoot-Hawley-like tariffs that kicked off the Great Depression. Even a good friend like Canada is mad at us. Trump thought he had destroyed former Prime Minister Justin Trudeau and the Canadian Liberal Party after embarrassing Trudeau in December 2024. However, as usual, Trump overplayed his hand by attacking all Canadians. Instead of a Conservative Party win in Canada, Mark Carney’s Liberal Party increased its voter percentage by 11.1% in the April 2025 election.
America’s farmers are already feeling the sting of Trump’s trade war. China has reduced its imports of American sorghum by 95%. The primary objective of Trump’s trade war was to improve the balance of trade with every country. However, Trump’s trade officials have stupidly imposed higher tariffs on countries without a trade imbalance. We have trade surpluses with Chile, Argentina, and Brazil. However, Trump has announced a 50% tariff on all goods from Brazil, effective August 1. This action will prompt Brazil to impose tariffs on our goods, and our 50% tariff will result in higher prices on American imports such as coffee. The cost of coffee has already risen from $2.80 per pound in 2005 to $8.10 in 2025. The Trump tariff on Brazilian products may have the opposite result. Instead of a trade surplus, we are likely to have a trade deficit with countries like Brazil.
The Trump tariff program is beyond amateurish; it is criminally negligent. Wall Street has labeled Trump as the TACO (Trump Always Chickens Out) president and assumes that he is “posturing” and will not dramatically cause trade problems. I hope history proves him to be a clownish TACO president, but I fear that his ego will cause him to create actual chaos and economic damage.
Consumer prices are almost guaranteed to increase noticeably. Tariffs are not paid by the countries sending goods to the United States; American consumers ultimately bear the burden of these new costs. Therefore, tariffs are a form of regressive tax that is likely to affect lower- and middle-income individuals more significantly. Trump’s economic and immigration policies will also lead to labor dislocation and even labor shortages. These labor shortages, coupled with those caused by the tariff war, will result in empty store shelves for essential products and higher prices once the shelves are restocked.
Trump’s Big Beautiful Bill is a convoluted mess designed to delight the top 10% and console the bottom 90%. The bill is like a sugar high that will give everyone a short buzz. However, in the long run, it will dramatically increase the federal deficit (remember his promise to lower the deficit?) and merely delay the pain caused by the future closure of rural hospitals, a reduced safety net for children, the shutdown of most health-related research, and many other harmful consequences.
The increase in the federal deficit and the rising consumer prices will cause interest rates to climb even higher. While Trump wants to artificially solve the problem by firing he head of the FED, anyone with a brain knows that lowering interest rates for political expediency is childish. The world economy does not operate like Trump’s mom-and-pop real estate company. Higher interest rates will hurt everyone except investors who profit from the increased costs of those who must pay the higher interest rates. Higher interest rates will also have a significant impact on the home construction industry and first-time homebuyers. Moreover, higher interest rates increase the cost of borrowing to purchase a home, thereby reducing demand and putting downward pressure on home prices. High interest rates not only discourage business investment (and jobs), but they also lower the value of real estate for everyone.
The Trump Administration will undoubtedly crow about every little trade deal it consummates. After raising the tariff from 10% to 13.2%, they will celebrate Trump’s genius. When a country refuses to negotiate, Trump will say he is contemplating a 75% tariff, and they have 30 days to agree to his terms. After 30 days, we hear nothing. In 60 days, Trump declares victory when the country agrees to a 3% tariff increase and allows Americans to ship rubber bands to the country. However, we must continually remind ourselves that American consumers ultimately bear the cost of the increased tariffs.
The bottom line is that Trump and his minions are not the brightest stars in the night. The genius deal-maker of the 1990s saw three or four of his casinos in New Jersey go bankrupt. He is always so desperate for cash that even as President, he is compulsively compelled to sell merch out the back end of his jet.
