Trump’s Budget Will Cause A Recession

Created
Thu, 27/02/2025 - 07:16
Updated
Thu, 27/02/2025 - 07:16
Trump’s Budget Will Cause A Recession

The new budget is going to hurt the economy massively. There are 4.5 trillion in tax cuts to high earners and corporations and 880 billion in cuts from “Energy and Commerce”.

Energy and commerce probably sounds innocuous, but that committee overseas healthcare and it has only 200 billion in spending that isn’t health care, which means cuts to Medicaid, CHIP and ACA.

DOGE has put in some massive cuts to research, but the cuts hit research hospitals hard and are going to result in a lot of loss of hospital jobs because of loss of overhead.

Tariffs will also hit the economy hard, especially tariffs on energy, where there’s little ability to domestic producers to eat cost increases.

Tax cuts to high earners and corporations don’t increase the strength of the real economy: the money will go to buyouts, stock buybacks, executive salaries and luxury goods, not to investment in production and new jobs. Cuts to the civil service also have an obvious negative effect on the economy, though some will lead to higher profits due to no longer needing to comply with regulations and laws. (IRS cuts to auditors are the worst of these.)

If you want to re-industrialize you have to force companies to invest in new production, which means ending things like stock buy backs, executive options, and various other ways for corporations and rich people to juice their income without doing something productive.

In other words this is a very good budget if you’re rich, and a very bad budget if you aren’t. It’s going to hit red states harder than blue states, since they are overall more dependent on federal budget spending.

This budget will make America weaker, damage administrative capacity and hurt everyone but maybe to the top 5% or so.

Welcome to Trump’s America.

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