Tag: economy

Trump’s Tariffs Have Already Hurt the Economy—and the Pain Is Only Beginning

The U.S. economy is already feeling the effects of Trump’s tariffs, and the Organization for Economic Cooperation and Development (OECD) projects that things could get worse.

The OECD’s biannual interim economic outlook, published on Tuesday, forecasts U.S. growth will fall by a full percentage point from its 2024 rate. While this might not sound like much, this will translate to Americans missing out on trillions of dollars of goods and services by 2035 if this decrease in growth persists.

From 2010 to 2019, American gross domestic product (GDP) grew by an average of 2.4 percent per year. In 2024, it grew by 2.8 percent. Now, the OECD projects that the economy will grow by only 1.8 percent in 2025 and 1.5 percent in 2026, “owing to higher tariff rates [and] moderating net immigration,” among other factors. Assuming that yearly GDP growth neither rebounds nor falls further but persists at 1.8 percent, the U.S. economy will be $2.2 trillion smaller in 2035 than it would be had President Donald Trump not adopted his protectionist policies and growth remained at 2.4 percent.

Even though the OECD’s growth projections show the long-run macroeconomic damage of Trump’s tariffs, the American economy has remained relatively strong since he took office. The stock market is at an all-time high while inflation has been about the same as that experienced during the last year of the Biden administration: The average monthly inflation from January 2024 to August 2024, as measured by the consumer price index (CPI), was 0.2 percent. From January 2025 to August 2025, monthly CPI growth was not much higher: 0.225 percent. Meanwhile, the average monthly increase in the producer price index (PPI), which measures changes in expenses borne by American businesses, was 36 percent lower compared to the same time last year.

The Bureau of Labor Statistics (BLS) explains that “imports are excluded from PPI.” The experimental BLS index, which incorporates imports, tells a story similar to regular PPI: this index experienced 38 percent lower inflation from January 2025 to July 2025 than it did during the same period a year ago.

Relatively stable consumer price inflation and lower producer price inflation—excluding and including imports—under Trump are surprising. After all, the president has more than tripled the average effective tariff rate to 11.6 percent on approximately $2.2 trillion worth of imports, according to the Tax Foundation. Therefore, all things being equal, CPI and PPI should be elevated. So, why aren’t they? The answer lies in the delayed implementation of Trump’s tariffs: Although “Liberation Day” was April 2, the “reciprocal tariffs” announced then were postponed for months, finally taking effect on August 7, meaning “the full effects of tariff increases have yet to be felt,” as the OECD explains.

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Milei Raises Government Spending While Pledging Zero Deficit

Argentine President Javier Milei has built his presidency around a single rule: zero deficit. Yet even as he vows to keep the budget balanced, his new 2026 plan raises pensions, health, and education spending. The shift comes just a month before midterm elections, testing whether his austerity brand can survive political reality. 

Since taking office in December 2023, Milei slashed billions in spending, froze public works, and cut federal funding to provinces, among other austerity measures. University and health budgets were hit especially hard, leading to layoffs and reduced services. Retirees saw their benefits shrink as inflation eroded payments, while tighter rules limited access to pensions. As a result, Argentina reached its first primary surplus in more than a decade and its first full-year surplus in 123 years. But the cost was steep: Consumption plunged and poverty spiked above 50 percent before easing in recent months.

The political backlash hit hardest in the province of Buenos Aires—home to nearly 40 percent of voters—where Milei’s coalition suffered a defeat earlier this month. In response, Milei rolled out a 2026 budget that expands spending in areas he once vowed to shrink.

The plan increases pensions and disability payments by 5 percent, boosts health spending by 17 percent, and lifts education spending by 8 percent—all above projected inflation. As Martín Rodríguez Yebra of La Nación put it, the package amounts to “a white flag in the three battles that eroded his popularity this election year.”

Milei insists fiscal balance remains “set in stone.” The numbers partly back him up: total revenues for FY 2026 are projected at 15.6 percent of gross domestic product, up 0.2 percentage points from 2025. On paper, the budget still balances.

The biggest challenge is political. Without a congressional majority, Milei has relied on vetoes to block deficit-boosting bills. By conceding targeted increases, he hopes to blunt those challenges while courting centrists who dislike Peronist populism but remain wary of his radical cures. The October 26 legislative elections will decide whether he grows his foothold in Congress or stays boxed in.

At the Conservative Political Action Conference (CPAC) earlier this year, Milei handed Elon Musk a chainsaw—a symbol of his vow to slash the state. Now, with midterms looming, he is testing whether that brand of austerity can withstand political reality. Voters will decide whether the chainsaw keeps buzzing or runs out of fuel.

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Trump Is Embracing ‘Daddy State’ Economics

The question of whether President Donald Trump has turned the United States toward a new “state capitalism”—one in which the government is not just economic referee but active player—has been answered. His second term brings policies that go well beyond traditional Republican pro-market orthodoxies, such as tax cuts and deregulation, and into direct involvement with production and capital. Yet this doctrine is less a coherent grand strategy than a set of ad hoc deals, sometimes pro-market and sometimes interventionist.

Some Trump policies—tax cuts, deregulating, talk of budget-deficit reductions—retain a traditional Republican tone. On the other hand, this administration’s protectionism and tariffs would have been inconceivable a decade ago. Republicans would also traditionally label the government’s acquisition of a 10 percent stake in Intel as socialism if proposed by anyone other than Trump. And other policies have the feel of mafia tactics made possible by the exercise of leverage, like letting Nvidia and AMD sell their chips to China in exchange for a 15 percent cut back to the U.S. government.

Trump also departs markedly from the past GOP playbook in his lack of recognition that the market allocates resources much better than politicians and bureaucrats do. He treats the market as a stage for negotiation to reorganize the world’s economies. Old-guard Republicans were globalists, whereas Trump built his appeal on “America First” nationalism and protectionism.

Earlier Republicans valued predictable rules, but as Cambridge legal scholar Antara Haldar noted in a Project Syndicate symposium this month assessing the direction of “Trumponomics,” the president “is willing to break any rule, norm, or promise…in the name of striking ad hoc corporate-style ‘deals.'” Where conservative-minded leaders of the past obscured the state’s role, Trump “flaunts it.”

Yet Haldar correctly argues that Trump’s approach differs from other forms of heavy-handed state control. It is neither the Chinese model nor that of the developmental state. It is “erratic, transactional, and short-sighted” and a rejection of the “quietly overbearing ‘Nanny State’…in favor of a commanding, patriarchal ‘Daddy State.'”

Princeton University historian Harold James, another participant in the symposium, sees Trump as a break from the past due to his revival of state-directed “industrial policy.” This started under former President Joe Biden’s administration, but there is no doubt that Trump’s pursuit of a manufacturing revival and reshoring of global supply chains, along with his tariffs and equity stakes in private companies and his overall aim to rebuild U.S. strategic capacity, fall well into that category.

Unfortunately, as James argues, Trump’s brand of industrial policy encourages “hyper-activist corporate lobbying, with large and well-connected enterprises getting the best ‘deals.'” In my opinion, all industrial policies end up this way, not just Trump’s.

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Western politicians are not looking after the national interest – whose interests are they looking after?

On Tuesday, Richard Werner, Professor of Banking and Economics at the University of Winchester, joined Rick Sanchez on RT’s ‘Sanchez Effect’ to discuss Europe’s economic woes.

In Western countries  that are in economic and greater fiscal difficulties,” Prof. Werner said, “we have people in charge who do not look after the national interest and have other motives, other goals.”

To help us begin to understand what these “other motives” and “other goals” are, we turn to a speech made around 2001 by the late Dr. Michael S. Coffman at the Granada Forum.  Dr. Coffman passed away in 2017, as reported by InfoWars.

Dr. Coffman had a PhD in Forest Science.  He was a retired paper industry executive, a property rights advocate and a global warming sceptic known for his work with Environmental Perspectives, Inc. and Sovereignty International, focusing on issues such as Agenda 21, the Convention on Biological Diversity and the perceived threat of a New World Order.

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2 In 5 Young Adults Are Taking On Debt For Social Image, To Impress Peers, Study Finds

You can thank the Tik Tok, Instagram world we live in…

Money may not buy love, but for many young adults, it’s still the ticket to attention. A new study shows that two in five Gen Zers admit going into debt just to impress others — often in dating and social situations, according to Credit One Bank.

The pressure to perform financially is high among younger generations. Half of Gen Z and millennials (51%) say they’ve faked wealth or success, with Gen Z leading at 54%. Nearly 38% admit they’ve damaged their credit score or gone into debt to impress someone, and 37% say they’d even overdraft their accounts for a date. Men feel that pressure most: 46% would go into debt for a single date, compared to just 28% of women.

Credit One Bank writes that more than half of consumers say a high credit score makes someone more attractive, while nearly 70% would lose confidence in a boss with bad credit. Still, disclosure is rare: 54% of Gen Z and millennials prefer not to share their financial details with a partner until things get serious. Only 8% call poor financial history a marriage dealbreaker. Nearly half (48%) say they’d marry someone with a shaky financial past, especially if that person was improving. Gender gaps persist: men (47%) are more forgiving, while women are twice as likely to reject a partner over money issues (10% versus 5%).

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Congress close to missing ‘basic’ budget deadline for 29th year, watchdog group says

Congress is on its way to missing a “basic” budget deadline for the 29th year in a row, according to the Committee for a Responsible Federal Budget.

Meanwhile, the deficit so far into the current fiscal year is larger than the same period last year. 

“We’re less than a month away from a possible government shutdown, and lawmakers are once again finding themselves without a plan to keep the government funded,” said Maya MacGuineas, CRFB’s president. “If all 12 appropriations aren’t signed into law by September 30, it will be the 29th year in a row that they failed to meet the most basic deadline in budgeting. That’s not a streak to be proud of.”

MacGuineas said that the current spending showdown is the latest example of how broken the budgeting process is in Washington.

“This is just another sign that the budget process is completely broken. Congress hasn’t passed a real budget resolution in 10 years. Often, they pass no budget at all. And when they do pass one, it’s either full of fantasy math, simply an excuse to facilitate the passage of partisan reconciliation bills, or both,” she said. “Going through the process of crafting a budget around the nation’s priorities now sounds like a fairytale – in fact, the President hasn’t even bothered to submit a full budget for Fiscal Year 2026.”

The federal government has borrowed $1.9 trillion so far into FY2025 from September 2024 through August 2025, according to the latest Congressional Budget Office (CBO) data. The borrowing is slightly higher than the same time period of fiscal year 2024.

However, the monthly deficit for August is lower than last year. 

The deficit was $360 billion in August 2025, which is down from $380 billion in August 2024. 

According to CBO data, federal tax revenue for August 2025 was $344 billion, which is a $37 billion increase compared to August 2024. 

Spending in August 2025 was $17 billion higher than August 2024.

In total, the deficit so far into FY2025 is $1.9 trillion compared to $1.8 trillion during the same time period of FY2024.

The CRFB estimated that the FY2025 rolling deficit is about 6.4% of GDP, which is close to FY2024.

“Over the past 12 months, total nominal revenue was $5.2 trillion compared to $4.9 trillion over the same period prior. Nominal spending was $7.1 trillion over the past 12 months compared to $6.9 trillion the same period prior,” read a CRFB analysis.

MacGuineas suggested that lawmakers should work to avoid a shutdown and improve the fiscal situation of the country at the same time. 

“In light of our massive debt, they should reduce both defense and non-defense spending levels below their current levels and extend the expiring discretionary spending caps to enforce additional deficit reduction,” she said. 

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“Billions In Losses”: Retail Crime Has Surged 93% In Progressive Cities

America’s great cities once symbolized prosperity and culture. Now, many are paying a steep financial price as crime surges and businesses flee. As one line in a new op-ed piece put it, “Crime has a balance sheet. In poorly led cities, that balance sheet is bleeding red ink by the day.”

Retail is bearing the brunt, according to an op-ed by Ted Jenkin at Fox News. The National Retail Federation (NRF) reported U.S. retailers lost $112 billion in 2022 due to theft, up from $94 billion in 2021. Between 2019 and 2023, shoplifting incidents rose 93% and dollar losses climbed 90%. Major chains are pulling back: Target projected $500 million in additional losses this year, Walgreens has shut stores across San Francisco, and Nordstrom left downtown entirely.

“Does it seem insane to you that so many of these retail stores have to lock up much of the merchandise…knowing that they will never be arrested?” the piece asked. The fallout is visible in empty storefronts and shrinking city budgets. San Francisco’s downtown vacancy rate has hit 34.8%, erasing jobs, tax revenue, and foot traffic.

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Huge BLS Scandal Emerges Amid Largest Downward Revision to Employment in History – Virtually No Job Creation in Last Year of Biden Admin – Millions of Jobs Vanish

Another huge BLS scandal has emerged amid the largest downward revision to employment in US history.

According to the Bureau of Labor Statistics (BLS) far fewer jobs were created between April 2024 and March 2025 in the latest jobs revision.

Joe Biden and Kamala Harris were cooking the books the whole time and lying to the American people.

CNBC reported:

The labor market created far fewer jobs than previously thought, according to a Labor Department report Tuesday that added to concerns both about the health of the economy and the state of data collection.

Annual revisions to nonfarm payrolls data for the year prior to March 2025 showed a drop of 911,000 from the initial estimates, according to a preliminary report from the Bureau of Labor Statistics. The total revision was on the high end of Wall Street expectations, which ranged from a low around 600,000 to as many as a million.

The revisions were more than 50% higher than last year’s adjustment and the largest on record going back to 2002. On a monthly basis, they suggest average job growth of 76,000 less than initially reported.

Virtually ZERO jobs were created in 2024 under Joe Biden.

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Warning one third of the US economy is ALREADY in recession… here are the next states to fall

Leading economist Mark Zandi has warned that a third of the US is already in or at high risk of going into a recession. 

Zandi, chief economist at Moody’s Analytics, revealed that states making up nearly a third of America’s GDP – including Virginia, Connecticut and Delaware – are in dangerous territory.

‘States experiencing recessions are spread across the country, but the broader DC area stands out due to government job cuts,’ Zandi wrote on X.

It comes after President Donald Trump and Elon Musk went on a firing spree earlier this year in an attempt to reduce the cost of the federal workforce. 

States representing another third of the economy are holding steady – such as Hawaii, New York and California – and a final third are still growing. 

‘Southern states are generally the strongest, but their growth is slowing,’ he explained. 

South Carolina, Alabama, Kentucky and Louisiana all made the list of states still growing economically. 

‘California and New York, which together account for over a fifth of US GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn,’ Zandi added. 

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AI: False Savior of a Hollowed-Out Economy

The real story of the US economy isn’t about AI, it’s about an economy that’s run out of rope. AI is being hyped not just by promoters reaping billions of dollars in stock market gains, it’s being hyped by the entire status quo because it’s understood to be the last chance of saving an economy doomed by the consequences of decades of artifice.

The real story of the US economy is that decades of “financial innovations” finally caught up with us in 2008, when the subprime mortgage scam–a classic example of “financial innovations” being the cover story for greed and fraud running amok–pulled a block from the global financial Jenga Tower that nearly collapsed the entire rickety, rotten structure.

Our political leadership had a choice: clean house or save the scam. They chose to save the scam, and that required not just institutionalizing moral hazard (transferring the risks of fraud and leveraged speculation from the gamblers to the public / Federal Reserve) but pursuing policies–zero interest rate policy (ZIRP), quantitative easing, increasing the money supply, and so on–that had only one possible outcome:

An economy permanently dependent on inflating asset-bubbles that enriched the top 10% while the bottom 90% who depend on earned income fell behind.

The desired goal of permanent asset-bubbles is the “wealth effect,” the cover story for transferring all the gains into the hands of the top 10%, who can then go on a spending spree which ‘trickles down” to the bottom 90%, who are now a neofeudal class of workers serving the top 10% who account for 50% of all consumer spending and collect 90% of the unearned income and capital gains.

This arrangement is inherently unstable, as “financial innovations” suffer from diminishing returns. Eventually the debt-serfs can no longer borrow more or service the debt they already have, and every bubble being bigger than the previous bubble guarantees the next implosion will be larger and more devastating than the previous bubble-pop.

So what does a system that’s run out of rope do? Seek a savior. The rope has frayed, and the rocks are far below. The impact is going to be life-changing, and not for the better.

The choice remains: clean house, end the bubble-dependent frauds and scams, or find a way to inflate yet another credit-asset bubble. Clean house and lose all our bubble-wealth? You’re joking. The solution is to blow an even bigger bubble. Hey, it’s worked great for 17 years.

Never mind that the precarity of the bottom 90% is accelerating as both the state and Corporate America have offloaded risks onto households and workers; they have OnlyFans, 24% interest credit cards, zero-day-expiration options and side hustles to get by. Never mind that for many Americans, basic services are on the same level as impoverished developing-world economies. What matters is maintaining the wealth of the few at the expense of the many, by any means available.

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