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Memories of the 28th Century

Trump's Rationale

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by
PeterL
, 03-12-2025 at 11:45 AM (1888 Views)
I was thinking about why Trump might be ruining the U.S. economy, but there were no obvious answers, unless he was just following orders from his leader, Putin. That is possible, but he has done a few things that probably irked Vladimir. Then I recalled his history of debt and bankruptcy. Maybe he is trying to avoid another bankruptcy.
By ruining the economy, he is making the money worth even less, and so far, the interest rates have not moved much. But the higher inflation makes life easier for debtors, because it means they can pay down debt with cheap money. I don’t know Trump’s [resent indebtedness, but in the past, he had to look for loans from banks in other countries, because U.S. banks were onto his game. Vladimir and Russian oligarchs are one source of his funding, and he has been trying to pay down debt with favors, and that’s why he is backing Russia in their invasion of Ukraine.
But a few favors are nothing compared to destroying the value of the U.S. dollar. If he can pay back debt in dollars that are worth a tenth as much as the dollars when he borrowed, then he will be far ahead.
Warren Buffett appears to have made the right moves by reducing his exposure to equities and hold more Treasury obligations. It probably isn’t too late for other investors to use the same tactic to improve their fortunes.
The bear market in equities probably will last until 2028, when the changing of president will be near. The other large factors will the national debt and income tax rates. Trump may try to reduce tax rates again, and that will eliminate any advantage gained by reducing the budget. By 2028, the national debt should be relatively small, but the unemployment rate will be higher. The ideal candidate for president will be a fair tax limited government libertarian or Whig. We will need to increase the income tax to provide income for the government after the disastrous tariffs will be repealed. We also will need a federal organization that will get Americans working again, because the unemployment rate will be more than twenty percent. Rebuilding basic industries will be important, because the depression will have ruined international trade, so many industries will be in horrible shape. The situation would be ideal for Herbert Hoover, if he weren’t dead. There may be some Libertarians who could handle the job, but I don’t know who they are.
Working our way out of the depression won’t be easy, but it will require that many people do jobs that are not what they would like, but getting basic industries going can be like that.
Infrastructure will have been neglected for a few years, so construction will be necessary. Housing might be easy, because so many migrants will have left the country, and natives along with them. But the lack pf the safety net for the least of the people probably will have led to a high mortality rate, so unskilled workers will not be as easy to find.
The financial sector probably will be horrible, because they were paid in cheap dollars, so they will not have money to lend, and there probably will be new names on many banks, But Trump will have paid his debts will those cheap dollar, so he will be happy. Musk will have spent a few years plundering federal agencies, so it shouldn’t bother him that Tesla will be belly-up.
After the next president will be inaugurated in 2029, things should improve, but getting to that point will be the problem. Following the example of Warren Buffett may be a way to profit from the country’s dire condition, but that will require investment capital.
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  1. tailor STATELY's Avatar
    I thought the Trump Effect was already priced in in the markets... could be wrong. Hoping jobs are found by companies returning to the States and with foreign investment firms' new factories. In the meantime just riding the wave hoping it doesn't become a tsunami
  2. PeterL's Avatar
    A small part of th Trump effect is already apparent, but he is busily causing a major recession, so markets could drop into levels they haven't visited in decades. The same is true of unemployment. During the Great Depression, unemployment reached 25%, and that level of unemployment is possible again. The Great Depression was caused by a trade war, so it shows us what might happen.
  3. tonywalt's Avatar
    Permit me, if you will, a momentary indulgence to reply to the concatenation of speculative miasma masquerading as geopolitical insight—a diagnosis of the republic's ailments so extravagantly muddled that even the most lenient analyst might consider it a triumph of associative fantasy over disciplined reasoning.

    To begin, the notion that Mr. Trump—a man who, for all his defects, remains visibly and operatively American—is orchestrating the demise of the U.S. economy under secret instructions from President Vladimir Vladimirovich Putin, is not merely risible, it is calumnious in that peculiarly lazy, postmodern fashion that finds conspiracy more comforting than complexity. One is reminded of the ancient habit of blaming poor harvests on witches. We have simply updated the broomstick for the bear.

    Trump had debt. Who among us—corporate or corporeal—has not sinned in the ledger? But to argue that his supposed plan is to induce nationwide economic collapse in order to mitigate his personal balance sheet requires a spectacular disregard for cause, effect, and the sheer mechanics of monetary policy. Were that even feasible, I daresay Mr. Trump would already have positioned himself as Chairman of the Federal Reserve and Secretary of the Treasury, with Mr. Mnuchin serving drinks on the veranda.

    As for inflation’s purported boon to debtors—this much is true, but trite. It is as if the author has discovered that water is wet and wishes to be applauded for the revelation. The idea that this macroeconomic phenomenon is being stage-managed by a former reality television host to accommodate a portfolio of vaguely Russian promissory notes is not merely unconvincing, it is, in its own small way, an act of literary vandalism.

    Further still, the specter of a 20% unemployment rate, a collapsed financial sector, Tesla’s figurative entrails strewn across the National Mall, and the United States reduced to a Hooverian sandbox—this is the kind of overcooked Cassandranism that, in another era, would have found its natural home in a mimeographed pamphlet distributed outside bus terminals by a man in a sandwich board.

    The invocation of Warren Buffett—ah, dear Warren, the Delphic Nebraskan—is apt, but not in the way the author intends. Mr. Buffett’s investment choices are not prophecies; they are hedges. And hedges, as even the most junior analyst at Bridgewater Associates knows, are not indictments of civilization but simple expressions of prudence.

    And finally, we are offered a vision of redemption in the form of a libertarian or Whig—yes, a Whig! One suspects the author, in a moment of nostalgic fervor, consulted the political almanac of 1836. If the solution to our economic malaise lies in the resurrection of Millard Fillmore’s ghost, I confess myself unpersuaded.

    Let us have no more of this fever dream. If one wishes to critique Trump, or tariffs, or Tesla, by all means let them do so. But let them first equip themselves with arguments that do not rely on telepathy with Kremlin apparatchiks, or the invocation of Hooverian heroics as economic panacea.

    I remain, as ever,
    Yours in dismay and disbelief,
  4. tonywalt's Avatar
    Permit me, if you will, a momentary indulgence to reply to the concatenation of speculative miasma masquerading as geopolitical insight—a diagnosis of the republic's ailments so extravagantly muddled that even the most lenient analyst might consider it a triumph of associative fantasy over disciplined reasoning.

    To begin, the notion that Mr. Trump—a man who, for all his defects, remains visibly and operatively American—is orchestrating the demise of the U.S. economy under secret instructions from President Vladimir Vladimirovich Putin, is not merely risible, it is calumnious in that peculiarly lazy, postmodern fashion that finds conspiracy more comforting than complexity. One is reminded of the ancient habit of blaming poor harvests on witches. We have simply updated the broomstick for the bear.

    Trump had debt. Who among us—corporate or corporeal—has not sinned in the ledger? But to argue that his supposed plan is to induce nationwide economic collapse in order to mitigate his personal balance sheet requires a spectacular disregard for cause, effect, and the sheer mechanics of monetary policy. Were that even feasible, I daresay Mr. Trump would already have positioned himself as Chairman of the Federal Reserve and Secretary of the Treasury, with Mr. Mnuchin serving drinks on the veranda.

    As for inflation’s purported boon to debtors—this much is true, but trite. It is as if the author has discovered that water is wet and wishes to be applauded for the revelation. The idea that this macroeconomic phenomenon is being stage-managed by a former reality television host to accommodate a portfolio of vaguely Russian promissory notes is not merely unconvincing, it is, in its own small way, an act of literary vandalism.

    Further still, the specter of a 20% unemployment rate, a collapsed financial sector, Tesla’s figurative entrails strewn across the National Mall, and the United States reduced to a Hooverian sandbox—this is the kind of overcooked Cassandranism that, in another era, would have found its natural home in a mimeographed pamphlet distributed outside bus terminals by a man in a sandwich board.

    The invocation of Warren Buffett—ah, dear Warren, the Delphic Nebraskan—is apt, but not in the way the author intends. Mr. Buffett’s investment choices are not prophecies; they are hedges. And hedges, as even the most junior analyst at Bridgewater Associates knows, are not indictments of civilization but simple expressions of prudence.

    And finally, we are offered a vision of redemption in the form of a libertarian or Whig—yes, a Whig! One suspects the author, in a moment of nostalgic fervor, consulted the political almanac of 1836. If the solution to our economic malaise lies in the resurrection of Millard Fillmore’s ghost, I confess myself unpersuaded.

    Let us have no more of this fever dream. If one wishes to critique Trump, or tariffs, or Tesla, by all means let them do so. But let them first equip themselves with arguments that do not rely on telepathy with Kremlin apparatchiks, or the invocation of Hooverian heroics as economic panacea.

    I remain, as ever,
    Yours in dismay and disbelief,
  5. PeterL's Avatar
    Thanks for the laugh, but at least you read it.

    If all goes well, the people will rise en mass and proclaim me Emperor.