If you want to reduce imports and boost exports a plummeting USD is what you want.
Yes, that is an advantage... of people losing faith in your
government and currency.
Who are these more reliable trading partners you are talking about ?
The regions of note are
Canada, Mexico, China, and the EU. Probably most nations. Think back to Trump's 'Liberation Day'... who wants to deal with that kind of... diplomacy?
Fed does not seem to do what Trump wants.
Powell does as much of what Trump wants as he can without looking like a clown (and maybe for that reluctance, has stepped down).
AI stuff is privately held investments with the exception of Google and Nvidia
Wall Street considers Microsoft, Google, Tesla, Meta, Nvidia, Palantir - even Apple - to be AI plays now. Those companies have private equity in Open AI, Anthropic, etc.
Anything that quotes the current administration’s words as if they are anything other than propaganda at best is an article than can be safely thrown straight into the trash.
Any comment that makes a potshot remark about the first sentence in an article, without reading the rest of the paragraph (let alone the article) can be safely thrown straight into the trash.
The article lists its reasons for why they think the economy will accelerate. You might disagree with its conclusions, but it's not dependent on taking the administration's "propaganda" at face value.
>His optimism has foundation. The effects of the One Big Beautiful Bill Act (BBB), a tax-cutting law enacted in July, will soon start to be felt. Americans will receive refunds that reflect retroactive tax cuts on income from 2025. They will also find that levies on monthly earnings have fallen. According to Piper Sandler, an investment bank, these “two years of tax cuts in one” are worth about $191bn.
You're still somewhat taking what the administration says at face value. What will be the effect of the BBB? Well, a tax cut, but also no cuts in spending, so an increase in deficits. What's the net effect of that? Is it positive or negative?
My money is net positive... at first. So yeah, maybe 2026 will be good.
It’s really dangerous to assume your political enemies are stupid and incompetent, even when they likely are. Because if it turns out you are wrong, you can only cry wolf a few times at best.
The current administration has a stated goal to reindustrialize America, and even with modest success in that it’s natural for the economy to improve.
What legislation makes you think America is going to be re-industrialized? I'm not talking about executive orders on a whim (which appear to be illegal), but actual coherent policy that creates the foundation for businesses to invest in manufacturing plants here.
>>What legislation makes you think America is going to be re-industrialized?
>Several actually.
BBB passed. The others died. This Congress passed an historically low number of bills. If reindustrialization of America depends on Congress, we are doomed.
Your first link says they just extended provisions that already existed in the 2017 tax cuts. If those were big boosters, wouldn't we have seen a shift already in this re-industrialization effort?
Two of those bills (H.R.2480 and S.99) direct the Department of Commerce to conduct studies, work with states on existing programs, and report back to Congress with the results. It sounds quite hand-wavey to me and not like we're doing anything new or exciting there. Certainly not anything that will shake up the status-quo.
S.2411: SBA will match capital from private investment funds investing in US manufacturing businesses. Sounds reasonable, but there is a cap of $500M per fund, is that enough especially given the $250M minimum required to participate? It seems like a large scale effort to bring back everything would require billions with a B. It also mentions "qualifying manufacturing projects" but I can't find anything in the bill's text on what would qualify.
H.R.2652: Changes some IRS tax law to provide incentives for companies re-homing their plants in the US. Sure, sounds fine.
None of these address the current chaos around tariffs, which seem necessary if we're going to bring everything back. Moreover, we may have already soured a lot of relationships with other countries with these shenanigans. Who's to say that foreigners want to invest in a country that's proven we elect unqualified, unserious, and corrupt people who will sever relationships and change terms whenever we feel like it? Bringing everything back will also mean higher prices (because benefits, higher wages, etc.) and that runs counter to all the messaging we heard about "Biden's inflation" on the campaign trail. How do they plan to deal with that? Tell people that it's actually fine that they're paying more because it's made in America?
Not to mention that there are other factors at play here that don't involve handing out money: the unemployment rate, human capital, and the birth rate. I personally don't believe we have enough people to work these manufacturing jobs without immigration which this admin is staunchly against[0].
0: sorta, H-1B was kept alive because of corruption but they also deported South Korean workers for show which disrupted progress on a Hyundai plant in Georgia (just as two conflicting examples)
It's not really about assuming political opponents are stupid.
The current administration feels like a venture capital firm that's gotten control of the country with the intention of extracting as much value out of it as possible before jumping ship and leaving anyone not worth at least 8 figures to suffer the aftermath.
California is not a representative slice of America.
You could imagine turning a few smaller states’ economies to be more like China (from the current government subsidized agriculture business) without messing with the tech and finance industries.
I don’t understand the knee jerk reaction of assuming you have to burn something down to build something.
The small states aren’t going to become like China because nobody abroad will want to import their products that are artificially propped up by tariff barriers. It’s going to be more like 1980s Brazil joined at the hip to California and New York. Doesn’t sound like an obvious winning recipe.
This is outrageous. We can obviously call a spade a spade. The idea that we can never criticize any policy, no matter how ill conceived, because somehow it might work and then we'd have egg on our face is ridiculous. "Maybe the White House Ballroom construction project will unearth a huge deposit of gold and pay for itself so we cannot possibly talk about its cost."
The claim that it is bad political strategy is also bizarre. Like, the right has been lying about policies from the dems for ages. "They are coming to force your child to transition to the other gender." Has this hindered their electoral chances? No. They have more power now than almost any time in the past fifty years.
We’re one step from harvesting organs from people in rural areas, or hunting them for sport from helicopter, and they’ll cheer as long as “their side” is the one hunting them.
The administration has wrecked US economic data collection, first with indiscriminate firings across the board and then a government shutdown. Labor and inflation statistics are completely unreliable for the past three months.
You read the first line of the article only, right? Because this quote is not framed as being particularly worthy of much weight, and the rest of the article is a quite straightforward economic analysis.
The Economist is quite critical of Trump. You should realize that the quote that starts the article is basically making your point -- that what's novel here is that the propaganda seems like it might actually have some truth to it for once.
accelerate - "To cause to move faster; to quicken the motion of; to add to the speed of." I.e. The airplane will accelerate as it plunges toward the ground.
Despite consensus forecasts predicting a slowdown to 1.8% growth, the US economy appears poised for acceleration in 2026 driven by a potent combination of aggressive fiscal and monetary loosening. Treasury Secretary Scott Bessent’s optimism is underpinned by the implementation of the "One Big Beautiful Bill Act," which delivers retroactive tax cuts, alongside a rebound in government spending following a record 43-day shutdown and the potential for the Supreme Court to invalidate certain tariffs, resulting in significant corporate refunds. This fiscal stimulus coincides with the Federal Reserve’s pivot to lower interest rates—a trend likely to intensify as President Trump seeks to appoint dovish leadership to the central bank. While this synchronized stimulus supports bullish stock market projections and complements favorable global conditions like low oil prices, it carries significant risks of reigniting inflation and spiking long-term bond yields; nevertheless, the absence of immediate shocks suggests the economy has ample scope to outperform expectations.
>the administration has weakened tax enforcement ... as more people cheat on their payments ... the effect could be worth an additional 0.25% of GDP.
Here is the first beneficial side effect of firing and defunding all of those federal workers and agencies, especially the now-hobbled IRS. Who says "cheaters never prosper"?
We have an economic forecast of national prosperity through perdition.
That's a monetary tightening, fiscal policy has been getting looser in all developed nations for a while, except places like Greece which were forced to tighten
What part are you confused by? There was more money and it was cheap. There was then less money and it became more expensive. Now it’s becoming cheap and plentiful again.
There is proof that infastructure improvements grow economies, which is usually paid for through taxes. Of course there is no guarentee tax increases will go towards infastructure.
The only problem with modern infrastructure projects is that the infrastructure doesn't actually get built. They have become welfare programs in disguise.
In the past the government would choose a competent industrialist to lead the construction such as Kaiser to build the Hoover Dam. Imagine the impossibility of appointing a billionaire industrialist to build CA high-speed rail in this age.
"Economy" is a catchall word here. The answer to your question is dependent on your definition of economy.
A traditional economist might define it as "the velocity of money". In a "hot" economy there's a lot of (domestic) spending (and hence selling) going on.
But this definition says nothing about the lot of the average, or below average, individual. If a trillion $ moves from individuals to govt as tax, and the govt spends that tax, then by this definition this is a good economy.
Conversely if you use the word "economy" as a place holder for personal success / improvement, being able to buy a house, afford medical care, buy groceries, eat out, have a solid job with a decent wage, well, high taxes probably aren't great.
If taxes are high, then how the govt chooses to spend the money starts to matter. If it is pumped into domestic production (aka salaries) that can be good. If that production has meaningful long term benefits (like infrastructure) so much the better. Useless spending (like on border walls, ballrooms or silly boats) can have short term gains, but dissolve in the longer term.
that's not what is being discussed. there's no guarantee taxes go to those things indefinitely. so again, which high tax countries have high growth in reality? (the counter claim is high taxes -> high consumer spending).
france for example has high taxes compared to USA. is it growing more or less than USA?
if you think Vanuatu is a good comparison then that's on you lol - also we never claimed that high taxes resulted in high tax rates. it was just a question to begin with lol. outstanding. in any case if you like your government feel free to give them more money voluntarily. leave ours alone please.
This administration sucks, but it's a repeat of Trump's first term: cut taxes and keep government spending high. The Federal Reserve is also entering a QE-lite phase so more "free" money will be available for businesses to grow.
Tariffs are likely to be repealed by the Supreme Court; people in the administration are betting against them if that tells you anything. 2026 will be interesting.
Stephen Kotkin suggests that the US share of nominal global GDP remains roughly constant, at around 25% regardless of political and policy changes. I don't know if that's right but any real change in the trend might require even more substantial policy re-work than we've had in the last 50 years. Trump II might not be that.
Wow, so many comments here just spouting tribal talking points without actually looking at what the article is saying.
The article's conclusions look wholly reasonable to me. Americans (well, the wealthy ones anyway) got a massive tax cut, and interest rates are likely to come down, especially once JPow is replaced. That should lead to greater economic activity.
However, it will also very likely lead to higher inflation, which was never really tamed, and even greater wealth inequality. That is likely to lead to even more political discontent, and I don't think anyone has a crystal ball on how that will eventually play out.
The Economist also had an article just before the 2024 election saying how the US economy was so great and the envy of the world. And that may have been true looking at aggregate numbers, but it's pretty clear huge swaths of the US electorate have seen their economic situation deteriorate. Large numbers of people on Obamacare will no longer be able to afford their health insurance, and if interest rates do come down as expected it will probably make homeownership even more unaffordable. Nevermind the real risks of the federal government's ever increasing debt unsustainability.
The economy may "accelerate", but at some point the deep structural problems will cause the wheels to come off.
No. I asked my RIA, and he said that scenario would destroy the world economy but also it is highly improbable (he never says "impossible", which is what I like about him). There's no place to hide if the USD craters a-la reddit-like doomsdaying (not even non-US funds).
EDIT: My speculation, not my RIA's: If the global economy wasn't backed by USD, I would recommend foreign funds/ETFs, but everything is interconnected with the US economy. Maybe in 50 years if the global economy moves to anohter currency, but what is there? sterling? renminbi? rubles? rupees? there's nothing.
I was given some gold as a gift and tried to sell it, they take a cut off the top and there are no laws regulating how much a coin shop can charge for exchanging (unlike securities). People don't realize it is easy to buy gold, but a LOT harder to sell it. Especially if there is no provenance like an ingot with a hologram vs. a golden eagle. But like a lower poster says, there is a lot in between, but do you remember COVID and how insane people went over toilet paper? To quote william burroughs: "Man is a bad animal".
Because there are a lot of scenarios between total apocalypse and status quo. The USD may collapse partially compared to other currencies and common assets like BTC, gold, silver without me having to defend my home from raiders and trading whiskey for ammunition.
What is an example where gold temporarily replaced a country's currency and it did't go full mad-max? I don't think you have any evidence to back up your claims, but I can just point to COVID and toilet paper to show how slippery the slope can be (replace toilet paper with "food" and play that out in your head). I didn't even mention Zimbabwe (which more closely resembles the Trump regimes blatant corruption) where wheelbarrows of bills couldn't buy bread.
I see you took a downvote. I'm not sure why. I think it's a reasonable question to be asking oneself generally, though perhaps the way you've asked it implies catastrophic near-term collapse, which I don't think is likely.
This is not financial advice.
I made a decision earlier this year to rebalance my portfolio toward more of a 50/50 split with US equities and international equities. Whatever you think of the current political situation in the US, I don't think it can be ignored that the US has shown itself to be an unreliable partner. I believe there will be real, long-term consequences to this. Believe me when I say that given the history of US markets, it brings me no pleasure to bet against them.
Inflation means purchasing power going down. There are likely knock-on effects stemming from precisely why the dollar weakens. But the general treatment to a declining asset is to sell it. For dollars, that means consuming and investing.
That is the zeitgeist. American leftists like the democratic socialists talk loudly about being like Scandinavia but are going to visit Cuba and Venezuela. European socialists seems to think there is an unlimited amount of tax that can be raised from people who struggle to make 1500 EUR a month in countries like Spain while the EU political policy has been a major factor in the destruction of their purchasing power over the last 5 years.
They can't buy homes, they don't get raises. The state takes in more than ever. If anything you can argue Europe has too little capitalism going on and too much state capitalism.
No implementation would ever be good enough. We know the current system in Europe at least is collapsing because of the unbearable cost of the welfare system plus growth stagnation not because of "billionaires" (and no amount of raising taxes on the young generation or the "rich" will fix it). But it's easy to avoid dealing with the real economic problems and just blame something external being it "billionaires", the 1%, Trump, Putin, China etc (pick your favourite poison).
In this forum pretty much everyone is privileged in the country they live compared to the normal citizen. It's easy to cosplay about "utopia" when it has little direct impact on you or you can just move away to another place.
• the USD is plummeting
• America's trading partners are frantically looking to foster trade with more reliable partners
• Fed policy and American economic data are becoming unreliable due to political pressure
• a handful of AI companies, with questionable longevity, are driving most of the stock market's growth
We should append "say minority of analysts" to the title
If you want to reduce imports and boost exports a plummeting USD is what you want. Why do you think China manipulates its currency to keep it weak.
Who are these more reliable trading partners you are talking about ?
Fed does not seem to do what Trump wants.
It's all the markets NASDAQ, DOW, S&P 500, most of the big AI stuff is privately held investments with the exception of Google and Nvidia.
> If you want to reduce imports and boost exports a plummeting USD is what you want. Why do you think China manipulates its currency to keep it weak.
Where are all these exports going? It feels like there is very limited amount of buyers who can actually afford Made in USA.
Edit: I misunderstood this question:
It probably is from the POV of America's partners. Rather than list them myself, here's a short Reuters article outlining some:https://reuters.com/world/china/global-race-free-trade-agree...
Anything that quotes the current administration’s words as if they are anything other than propaganda at best is an article than can be safely thrown straight into the trash.
Any comment that makes a potshot remark about the first sentence in an article, without reading the rest of the paragraph (let alone the article) can be safely thrown straight into the trash.
The article lists its reasons for why they think the economy will accelerate. You might disagree with its conclusions, but it's not dependent on taking the administration's "propaganda" at face value.
>His optimism has foundation. The effects of the One Big Beautiful Bill Act (BBB), a tax-cutting law enacted in July, will soon start to be felt. Americans will receive refunds that reflect retroactive tax cuts on income from 2025. They will also find that levies on monthly earnings have fallen. According to Piper Sandler, an investment bank, these “two years of tax cuts in one” are worth about $191bn.
Why did you put "propaganda" in quotes?
I believe both of those first sentences are true.
You're still somewhat taking what the administration says at face value. What will be the effect of the BBB? Well, a tax cut, but also no cuts in spending, so an increase in deficits. What's the net effect of that? Is it positive or negative?
My money is net positive... at first. So yeah, maybe 2026 will be good.
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What if it does work though?
It’s really dangerous to assume your political enemies are stupid and incompetent, even when they likely are. Because if it turns out you are wrong, you can only cry wolf a few times at best.
The current administration has a stated goal to reindustrialize America, and even with modest success in that it’s natural for the economy to improve.
What legislation makes you think America is going to be re-industrialized? I'm not talking about executive orders on a whim (which appear to be illegal), but actual coherent policy that creates the foundation for businesses to invest in manufacturing plants here.
Several actually.
https://www.finance.senate.gov/chairmans-news/the-one-big-be...
https://www.congress.gov/bill/119th-congress/house-bill/2480
https://www.congress.gov/bill/119th-congress/senate-bill/99
https://www.congress.gov/bill/119th-congress/senate-bill/241...
https://www.congress.gov/bill/119th-congress/house-bill/2652
Maybe examine the completeness of the sources you obtain your news from?
>>What legislation makes you think America is going to be re-industrialized? >Several actually.
BBB passed. The others died. This Congress passed an historically low number of bills. If reindustrialization of America depends on Congress, we are doomed.
Your first link says they just extended provisions that already existed in the 2017 tax cuts. If those were big boosters, wouldn't we have seen a shift already in this re-industrialization effort?
Two of those bills (H.R.2480 and S.99) direct the Department of Commerce to conduct studies, work with states on existing programs, and report back to Congress with the results. It sounds quite hand-wavey to me and not like we're doing anything new or exciting there. Certainly not anything that will shake up the status-quo.
S.2411: SBA will match capital from private investment funds investing in US manufacturing businesses. Sounds reasonable, but there is a cap of $500M per fund, is that enough especially given the $250M minimum required to participate? It seems like a large scale effort to bring back everything would require billions with a B. It also mentions "qualifying manufacturing projects" but I can't find anything in the bill's text on what would qualify.
H.R.2652: Changes some IRS tax law to provide incentives for companies re-homing their plants in the US. Sure, sounds fine.
None of these address the current chaos around tariffs, which seem necessary if we're going to bring everything back. Moreover, we may have already soured a lot of relationships with other countries with these shenanigans. Who's to say that foreigners want to invest in a country that's proven we elect unqualified, unserious, and corrupt people who will sever relationships and change terms whenever we feel like it? Bringing everything back will also mean higher prices (because benefits, higher wages, etc.) and that runs counter to all the messaging we heard about "Biden's inflation" on the campaign trail. How do they plan to deal with that? Tell people that it's actually fine that they're paying more because it's made in America?
Not to mention that there are other factors at play here that don't involve handing out money: the unemployment rate, human capital, and the birth rate. I personally don't believe we have enough people to work these manufacturing jobs without immigration which this admin is staunchly against[0].
0: sorta, H-1B was kept alive because of corruption but they also deported South Korean workers for show which disrupted progress on a Hyundai plant in Georgia (just as two conflicting examples)
Did anyone actually buy the line about “industrializing America”?
It’s pretty clearly a criminal enterprise meant to enrich the president, his family, and the already wealthy.
These things are not incompatible.
My point is: assume evil, not stupid.
Even when it's really tempting to think your political opponents are stupid.
It's not really about assuming political opponents are stupid.
The current administration feels like a venture capital firm that's gotten control of the country with the intention of extracting as much value out of it as possible before jumping ship and leaving anyone not worth at least 8 figures to suffer the aftermath.
I get that impression too.
The way our world works, that would be completely fine for the 'economy looks set to accelerate' like in this article.
A good economy is not necessarily good for the general public.
I think there is a difference between mere us vs them political sports-fanning and having incredible skepticism towards a particular administration.
>The current administration has a stated goal to reindustrialize America
Why not go even further into the nationalist nostalgia zone?
instead of factories everyone could be working in mining, fishing and farming again...
Man it's not that deep. More factories -> economic boost.
Whether it'll work is a different topic, but it seems silly to wish failure.
Not living there so i'm not really invested in beyond a vague hope that part works ok, and abject horror at the rest of the stuff happening there.
Is it? Reindustrialization basically means that you want to turn the overall American economy to be more like China and less like California.
Maybe that’s good for national security (or whatever is your values-based metric), but it’s not automatically good for GDP.
California is not a representative slice of America.
You could imagine turning a few smaller states’ economies to be more like China (from the current government subsidized agriculture business) without messing with the tech and finance industries.
I don’t understand the knee jerk reaction of assuming you have to burn something down to build something.
The small states aren’t going to become like China because nobody abroad will want to import their products that are artificially propped up by tariff barriers. It’s going to be more like 1980s Brazil joined at the hip to California and New York. Doesn’t sound like an obvious winning recipe.
> Doesn’t sound like an obvious winning recipe.
I agree.
However, hammering the message of "this would obviously never work" is harmful.
Because if it does work, half the country is never going to listen to you again, and the situation is already well on its way there.
This is outrageous. We can obviously call a spade a spade. The idea that we can never criticize any policy, no matter how ill conceived, because somehow it might work and then we'd have egg on our face is ridiculous. "Maybe the White House Ballroom construction project will unearth a huge deposit of gold and pay for itself so we cannot possibly talk about its cost."
The claim that it is bad political strategy is also bizarre. Like, the right has been lying about policies from the dems for ages. "They are coming to force your child to transition to the other gender." Has this hindered their electoral chances? No. They have more power now than almost any time in the past fifty years.
Okay, get outraged. Not sure about the strawman ballroom argument but:
Let me repeat, shouting "stupid Trump is horrible for the economy" from rooftops is not a great political strategy.
In the case it turns out to be false, (and there is a credible chance of that - read the article) it will seem incredibly dishonest.
We’re one step from harvesting organs from people in rural areas, or hunting them for sport from helicopter, and they’ll cheer as long as “their side” is the one hunting them.
Some people genuinely believe Portland is a warzone.
Your idea of 'rural areas' is not far off from that.
The administration has wrecked US economic data collection, first with indiscriminate firings across the board and then a government shutdown. Labor and inflation statistics are completely unreliable for the past three months.
You read the first line of the article only, right? Because this quote is not framed as being particularly worthy of much weight, and the rest of the article is a quite straightforward economic analysis.
This reads like a fake it till you make it hope piece.
while i dont think the labor market is doing well, when they start cutting rates, overall markets across the board spring back up
how come trump won again? his second term is very similar to 1st.
Because a large number of people don’t expect people in power to blatantly lie to their face.
The Economist is quite critical of Trump. You should realize that the quote that starts the article is basically making your point -- that what's novel here is that the propaganda seems like it might actually have some truth to it for once.
yeah i think it was just a lazy comment, Economist has a solid track record of criticizing the Trump administration.
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Thanks, just saved me a few mins from reading this
accelerate - "To cause to move faster; to quicken the motion of; to add to the speed of." I.e. The airplane will accelerate as it plunges toward the ground.
the scientific definition is merely the change in velocity. slamming your breaks would also count as accelerating from a physics perspective.
This is not what the article says, so in this context is misleading.
Accelerate into a wall.
Despite consensus forecasts predicting a slowdown to 1.8% growth, the US economy appears poised for acceleration in 2026 driven by a potent combination of aggressive fiscal and monetary loosening. Treasury Secretary Scott Bessent’s optimism is underpinned by the implementation of the "One Big Beautiful Bill Act," which delivers retroactive tax cuts, alongside a rebound in government spending following a record 43-day shutdown and the potential for the Supreme Court to invalidate certain tariffs, resulting in significant corporate refunds. This fiscal stimulus coincides with the Federal Reserve’s pivot to lower interest rates—a trend likely to intensify as President Trump seeks to appoint dovish leadership to the central bank. While this synchronized stimulus supports bullish stock market projections and complements favorable global conditions like low oil prices, it carries significant risks of reigniting inflation and spiking long-term bond yields; nevertheless, the absence of immediate shocks suggests the economy has ample scope to outperform expectations.
http://archive.today/Mc86e
This caught my attention:
>the administration has weakened tax enforcement ... as more people cheat on their payments ... the effect could be worth an additional 0.25% of GDP.
Here is the first beneficial side effect of firing and defunding all of those federal workers and agencies, especially the now-hobbled IRS. Who says "cheaters never prosper"?
We have an economic forecast of national prosperity through perdition.
"Stocks have reached a permanently high plateau." - written just before the 1929 crash.
It seems like we are in the foothills of the singularity. Doomsayers should be used to being disappointed.
Same old, same old:
Economist, Nov 18th 1999: Readjusting the lens (The latest statistics require a new look at America’s productivity puzzle)
https://archive.is/hXJ8A
Economist, Sep 23rd 1999: A new economy for the New World? (Inflation may not be as dead as it seems)
https://archive.is/eHeiU
“A monetary-fiscal loosening is coming” is this not the permanent state of affairs? And not just in America but just about any country in the world.
> is this not the permanent state of affairs?
No. We just concluded a multi-year tightening combined with multi-trillion dollar Fed balance sheet reduction.
That's a monetary tightening, fiscal policy has been getting looser in all developed nations for a while, except places like Greece which were forced to tighten
> That's a monetary tightening, fiscal policy has been getting looser in all developed nations for a while
Got it, yes. Though I’d argue Europe at least tried after the financial crisis.
so many words put together where neither of them makes any sense
"tightening" from zero interest ?!?
> "tightening" from zero interest ?!?
What part are you confused by? There was more money and it was cheap. There was then less money and it became more expensive. Now it’s becoming cheap and plentiful again.
So we're still testing out if tax cuts can increase consumer spending and grow the economy, then?
Is there proof high taxes grow the economy?
There is proof that infastructure improvements grow economies, which is usually paid for through taxes. Of course there is no guarentee tax increases will go towards infastructure.
The only problem with modern infrastructure projects is that the infrastructure doesn't actually get built. They have become welfare programs in disguise.
In the past the government would choose a competent industrialist to lead the construction such as Kaiser to build the Hoover Dam. Imagine the impossibility of appointing a billionaire industrialist to build CA high-speed rail in this age.
indeed there is no guarantee taxes go to infrastructure.
"Economy" is a catchall word here. The answer to your question is dependent on your definition of economy.
A traditional economist might define it as "the velocity of money". In a "hot" economy there's a lot of (domestic) spending (and hence selling) going on.
But this definition says nothing about the lot of the average, or below average, individual. If a trillion $ moves from individuals to govt as tax, and the govt spends that tax, then by this definition this is a good economy.
Conversely if you use the word "economy" as a place holder for personal success / improvement, being able to buy a house, afford medical care, buy groceries, eat out, have a solid job with a decent wage, well, high taxes probably aren't great.
If taxes are high, then how the govt chooses to spend the money starts to matter. If it is pumped into domestic production (aka salaries) that can be good. If that production has meaningful long term benefits (like infrastructure) so much the better. Useless spending (like on border walls, ballrooms or silly boats) can have short term gains, but dissolve in the longer term.
If you spend the taxes on productive things, infrastructure, subsidies, it seems like that grows the economy directly.
Cutting taxes and spending (ie austerity) has a more mixed track record of getting out of economic recessions, in my view.
empirically which countries have done what you are describing?
The United States?
Look at: the Internet, pharmaceuticals, automobile industry, energy industry, manufacturing
All downstream of massive government spending funded by taxes.
the United States has middle of the road taxes (if not overtly low)
There is ample evidence that public R&D and infrastructure investments can drive massive economic growth over extremely long periods.
that's not what is being discussed. there's no guarantee taxes go to those things indefinitely. so again, which high tax countries have high growth in reality? (the counter claim is high taxes -> high consumer spending).
france for example has high taxes compared to USA. is it growing more or less than USA?
Yes everyone can see you set up the strawman that “high taxes cause economic growth.”
No one claimed this, and so no one will respond directly to your “rebuttal.”
The US has significantly higher taxes than Vanuatu, and higher growth.
if you think Vanuatu is a good comparison then that's on you lol - also we never claimed that high taxes resulted in high tax rates. it was just a question to begin with lol. outstanding. in any case if you like your government feel free to give them more money voluntarily. leave ours alone please.
What?
This administration sucks, but it's a repeat of Trump's first term: cut taxes and keep government spending high. The Federal Reserve is also entering a QE-lite phase so more "free" money will be available for businesses to grow.
Tariffs are likely to be repealed by the Supreme Court; people in the administration are betting against them if that tells you anything. 2026 will be interesting.
And what about inflation?
Who cares? The roaring 20s will be great!
This needs to happen in order for the US to deal with its debts.
Only works if the US actually sells bonds and not just T-bills. Otherwise the market can just price in inflation.
With the minor side effect that no one will be able to afford rent or groceries, but hey that's not what's important.
or dollar losing value
Causing the dollar to devalue is a part of the strategy.
Elaborate?
Debt becomes cheaper with devaluation of the dollar, and the US has a lot of it.
Not just that. Imports become more expensive; exports become cheaper. This helps US manufacturing.
otherwise, it would be really hard to scale with a strong dollar :)
Accelerate producing what? And who will be consuming that "what"?
World trade is dead as we know it, cross border compute is on its last wheels. Internal median buying power is also in shambles.
It sure is, been a great year... If you are part of the top 1%: https://fortune.com/2025/12/08/how-many-billionaires-does-am...
Stephen Kotkin suggests that the US share of nominal global GDP remains roughly constant, at around 25% regardless of political and policy changes. I don't know if that's right but any real change in the trend might require even more substantial policy re-work than we've had in the last 50 years. Trump II might not be that.
Wow, so many comments here just spouting tribal talking points without actually looking at what the article is saying.
The article's conclusions look wholly reasonable to me. Americans (well, the wealthy ones anyway) got a massive tax cut, and interest rates are likely to come down, especially once JPow is replaced. That should lead to greater economic activity.
However, it will also very likely lead to higher inflation, which was never really tamed, and even greater wealth inequality. That is likely to lead to even more political discontent, and I don't think anyone has a crystal ball on how that will eventually play out.
The Economist also had an article just before the 2024 election saying how the US economy was so great and the envy of the world. And that may have been true looking at aggregate numbers, but it's pretty clear huge swaths of the US electorate have seen their economic situation deteriorate. Large numbers of people on Obamacare will no longer be able to afford their health insurance, and if interest rates do come down as expected it will probably make homeownership even more unaffordable. Nevermind the real risks of the federal government's ever increasing debt unsustainability.
The economy may "accelerate", but at some point the deep structural problems will cause the wheels to come off.
> Wow, so many comments here just spouting tribal talking points without actually looking at what the article is saying.
2 things are sure in HN comments:
1 - orange man bad
2 - AI is a bubble
“Yeah he may be a pedophile but wow have you seen Palantir’s stock price lately?”
Any good hedges against a possible downfall of USD?
No. I asked my RIA, and he said that scenario would destroy the world economy but also it is highly improbable (he never says "impossible", which is what I like about him). There's no place to hide if the USD craters a-la reddit-like doomsdaying (not even non-US funds).
EDIT: My speculation, not my RIA's: If the global economy wasn't backed by USD, I would recommend foreign funds/ETFs, but everything is interconnected with the US economy. Maybe in 50 years if the global economy moves to anohter currency, but what is there? sterling? renminbi? rubles? rupees? there's nothing.
Yeah its like when people say they are stockpiling gold in case of some form of economic apocalypse.
I'm not sure what good gold would do you if people start physically fighting each other for food and water.
I was given some gold as a gift and tried to sell it, they take a cut off the top and there are no laws regulating how much a coin shop can charge for exchanging (unlike securities). People don't realize it is easy to buy gold, but a LOT harder to sell it. Especially if there is no provenance like an ingot with a hologram vs. a golden eagle. But like a lower poster says, there is a lot in between, but do you remember COVID and how insane people went over toilet paper? To quote william burroughs: "Man is a bad animal".
Because there are a lot of scenarios between total apocalypse and status quo. The USD may collapse partially compared to other currencies and common assets like BTC, gold, silver without me having to defend my home from raiders and trading whiskey for ammunition.
What is an example where gold temporarily replaced a country's currency and it did't go full mad-max? I don't think you have any evidence to back up your claims, but I can just point to COVID and toilet paper to show how slippery the slope can be (replace toilet paper with "food" and play that out in your head). I didn't even mention Zimbabwe (which more closely resembles the Trump regimes blatant corruption) where wheelbarrows of bills couldn't buy bread.
Beans, boots, and bullets. You can't eat gold.
Little Dieter is that you? ;) (Referring to the excellent Herzog film)
Probably not. But if I had to hedge for that I would consider property and gold.
RAM modules.
(Joking, don't ever take my financial advice on anything!)
Pick any forex pair of your liking against USD?
I see you took a downvote. I'm not sure why. I think it's a reasonable question to be asking oneself generally, though perhaps the way you've asked it implies catastrophic near-term collapse, which I don't think is likely.
This is not financial advice.
I made a decision earlier this year to rebalance my portfolio toward more of a 50/50 split with US equities and international equities. Whatever you think of the current political situation in the US, I don't think it can be ignored that the US has shown itself to be an unreliable partner. I believe there will be real, long-term consequences to this. Believe me when I say that given the history of US markets, it brings me no pleasure to bet against them.
Literally anything.
TIPS. Stocks. Real estate. Cans of beans.
Inflation means purchasing power going down. There are likely knock-on effects stemming from precisely why the dollar weakens. But the general treatment to a declining asset is to sell it. For dollars, that means consuming and investing.
ex-US index funds.
2.3% GDP growth with a 5.5% GDP budget deficit. Not great not terrible.
Topic has turned into an anti-Trump shit-storm. Flag it!
Reminder to all Capitalists: The earth is a finite resource
> The earth is a finite resource
The earth is our only home.
“In the long run, we’re all dead”
So...somehow communists and socialists are better stewards of the Earth's resources???
Cuba is still there if you want to live in your utopia.
Weird to see McCarthy roleplay in 2025.
Come on, really? Criticism of current implementations of capitalism != Advocacy of the total abolition of markets.
That is the zeitgeist. American leftists like the democratic socialists talk loudly about being like Scandinavia but are going to visit Cuba and Venezuela. European socialists seems to think there is an unlimited amount of tax that can be raised from people who struggle to make 1500 EUR a month in countries like Spain while the EU political policy has been a major factor in the destruction of their purchasing power over the last 5 years.
They can't buy homes, they don't get raises. The state takes in more than ever. If anything you can argue Europe has too little capitalism going on and too much state capitalism.
No implementation would ever be good enough. We know the current system in Europe at least is collapsing because of the unbearable cost of the welfare system plus growth stagnation not because of "billionaires" (and no amount of raising taxes on the young generation or the "rich" will fix it). But it's easy to avoid dealing with the real economic problems and just blame something external being it "billionaires", the 1%, Trump, Putin, China etc (pick your favourite poison).
In this forum pretty much everyone is privileged in the country they live compared to the normal citizen. It's easy to cosplay about "utopia" when it has little direct impact on you or you can just move away to another place.
We are lead by Donkeys.
> They can't buy homes, they don't get raises.
How is this any different from the "average" American worker? Home buying is very difficult, raises are generally flat or don't meet inflation.