Trump’s 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.”
DOGE has implemented some massive cuts to research, but those 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 buybacks, 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 percent or so.
Welcome to Trump’s America.
different clue
A question that legacy Blueberals for Harris might have fun asking various magas after the magas have become visibly poorer due to President Musk and Assistant Vice President Trump . . . but only if they are ready for a physical fight . . . might be: ” hey, uhhh . . . Is America Great Again Yet? ”
Pardon my spitefulness, but, I hope that all the leopards eat all the faces until every leopard is full and every face is eaten off the front of its skull.
NR
Medicaid is the only thing keeping a bunch of rural hospitals out there open. A lot of rural hospitals are going to close under this budget.
Rural voters went overwhelmingly for Trump and Republicans. Trump won over 80% of the vote in some rural counties. And now those same rural voters are going to lose health care for them and their children under Trump and the Republicans’ budget. People are going to die because of this.
All because rural voters decided they hate brown people more than they love their own families.
Mark Level
You get support for Oligarchy & looting from both parties, the ReThuglicans are just more open about doing it. And President Elon promised to crash the Economy, it will be another “Promises Made, Promises Kept.” You can whip the Precariat further into shape and push them out on the streets. Americans don’t have the self-respect to fight back.
D.C., none of those swine in the Dem party would piss on the likes of you or me if we were on fire, don’t kid yourself. And Genocide Joe & Kop Kamala enacted the genocide of 400-500,000 Native Palestinians over 14 months after Oct. 2023, so any paeans you sing to their “decency” or “humanity” (gag!) will wring quite hollow. But yes, kick down and hate on other ‘Muricans, don’t blame the Billionaire Class. And be so gratified (as you are) that Obama and the Dems openly stole the nomination from Bernie Sanders twice, 2016 and 2020, to install Trump and the Wrecking Crew. Hey, at least Kamala wanted to cage all the Immigrant Kids and mass-expel their parents to the home countries destroyed by Clinton-Bush-Biden endless Imperial Wars.
And as to NR, the Zionist mask has slipped, once again. You just change a few words in the Blood Libel about the Palestinians, “If only the Arabs loved their children more than they hated Jews we wouldn’t need to exterminate them and take all their land.” Okay, I changed the last 11 words in the name of honesty, but I think you know the original quote as well as the back of your hand. If you don’t subscribe to it, feel free to clarify.
Oakchair
All because rural voters decided they hate brown people more than they love their own families.
—–
According to CNN’s exit polls Trump won a lower percentage of white voters in 2024 compared to 2020.
According to the AP exit polls Trumps vote among black people went from 8% in 2016 to 20% in 2024. Likewise, 28% of Hispanics voter for him in 2020, while 42% voted for him in 2024.
“If Democrats nominate Joe Biden, he may win, and we’ll have four years of weak, feckless Democratic leadership. And then, in four years, he’ll be defeated by a Republican Party even more openly white nationalist. If you nominate an Obama redux, you’ll just get a worse Trump redux.” –Mike Gravel (D)
Maybe the Democratic party should stop spending their time punching hippies, shrilling for war and corporations, and running anti-establishment Dems out of the party. Perhaps though they’d rather lose if the alternative is looking in the mirror and standing against a corrupt dystopian establishment.
Ian Welsh
Deleted some comments, didn’t allow another couple thru. My bad, shouldn’t have allowed some to begin with. I tend to be too lenient with regular commenters.
Please disagree without so much hostility to each other. None of you should be the enemy of each other, imo, you agree on more than you don’t.
NR
I am not a Zionist. Can I say that at least?
Ian Welsh
I agree, I can’t think of anyone who comments here regularly who is a Zionist.
mago
The democrats are a disaster. We all agree.
I’m one of the marginal people dependent upon state benefits to barely survive.
Any cuts to those mean I might as well cut my throat or find a gram of heroin while I still have the means and take myself out.
Just kinda kidding. I’m not gonna get that dark, although I’m sure millions will.
I never thought I’d live to see this degree of degeneration, but here we are.
Santa Maria Madre De Dios and I’m not even catholic.
God bless us all Tiny Tim.
Dan Kelly
Combined with this:
https://www.reddit.com/r/AskReddit/comments/1it86ez/what_will_americans_do_if_social_security_is/
Read all the comments.
——-
Ian, I am sorry. I was not well that day and I misread what you wrote and then took it out on you.
I am finding it harder and harder to trust even the good people like you.
I am very angry and I feel helpless.
different clue
Mark Level says : “And be so gratified (as you are) that Obama and the Dems openly stole the nomination from Bernie Sanders twice, 2016 and 2020, to install Trump and the Wrecking Crew.”
I would invite the readership in general to go back over all my comments and see what I did or did not have to say about the Dems openly stealing the nomination from Bernie Sanders twice. And if anyone decides to do that search, they can then assess the truth-value of the statement ” be so gratified ( as you are) ” etc.
Purple Library Guy
I have this hypothesis that low corporate taxes actually depress investment. Why? Because corporate taxes are not taxes on corporate income, they are taxes on profits. Things like dividends are paid out of profits.
OK, so let’s look at two scenarios. In scenario A, the effective corporate tax is 50%. So, every dollar of profit get halved before you can hand it to the owners. CEOs or whatnot would have solid reasons to instead spend much of that money, BEFORE it gets cut in half, on growing the corporation, so the asset owned ends up worth more. If you don’t have any profit because you spent it all on hiring or new machinery or R&D or whatever, you don’t pay the tax. If the tax rate on capital gains is high, all the more reason the rich people would want to just hold a piece of a growing asset that they are NOT realizing the gains from so they don’t have to pay the tax.
In scenario B, the effective corporate tax after loopholes is 0%. Why not just skip that investment-in-the-firm stuff and hand the money straight to the owners? Especially if the tax rate on rich people’s capital gains is also very low. As an owner, you can just pocket all the money.
Mark Level
First, thank you to OakChair for correct data on voter choices, such as they are between the duopoly corporatist Far Right and Medium Far Center Right Parties, in recent elections, & for the entirely vindicated Mike Gravel (an actual Lefty in the Dem party!! Imagine that! Not a single one remains, except Ro Khanna occasionally in performative words.
Speaking of vindicated predictions, it was upsetting (even frightening) to me that the first 2 comments on a thread denouncing Trump’s anti-populist (though having run twice on a faux (right wing) “Populist” platform precisely vindicated Matt Taibbi’s thesis in his book “Hate Inc.”
I don’t have a copy of the book but I read the reviews and saw interviews with him when it came out online. The clear thesis is that the 2 Corporate parties and their corporate MSM are united to pit Americans against one another over meaningless Culture War garbage (Children are turning into Cats and demanding litter boxes at schools!! Democrat-Feminists enjoy extracting babies from wombs and killing them in “post-birth abortions”!— both Fox News, OAN, etc. From MSDNC we get “Evil Bernie Bros. bullied poor, good people who know he’s an Evil Red! One of them engaged in criminal chair-throwing assault during a party meeting!” Chris Matthews claimed if Bernie won, a millionaire like himself might be “executed in my back yard” by Neo-Red Guards, I guess. Hillary called millions of Americans (not just white ones either) living in the Rust Belt neglected and decaying cities who’d voted for Obama twice, in ’08 and ’12, and seen no improvement in their material lives “A basket of Deplorables”, knuckle-draggers & implied racists.
There are very few parties in American political discourse who are calling for ACTUAL policies and actions that would put a brake on the continually spiraling economic inequality and immiseration of a majority of Americans, on behalf of the 0.1% by the 2 corporate Neoliberal, Austerity Parties we get to “choose” from. In fact, the main one I can think of is former Seattle Councilwoman Kshama Sawant, who actually passed a law in her city raising the minimum wage above $7.25, locking in a COLA, etc. so that even after the Dems colluded with the Republicans to demonize her and throw her out of office (it took ten years, their first effort failed) the Seattle minimum wage is now over $20.
Last weekend Sawant, alongside other evil monsters of the “Far Left” like Jill Stein, Revolutionary Blackout News, the Due Dissidence Podcast, Labor Leaders, etc. hosted an event called “Workers Strike Back”
People on the actual Left on Ian’s site (as I believe he is) can find a link to their 7 key demands here– https://www.workersstrikeback.org/
People who subscribe to obvious Logical Fallacies such as the False Dilemma, also known as the False Dichotomy or False Binary, have trapped themselves in a very dark Corner of Plato’s Cave, to the detriment of their own very survival, and demand that others join them in self-deleting. Sorry, I have some Instrumental Reason and Personal Agency remaining to me, so I refuse to go there. https://en.wikipedia.org/wiki/False_dilemma
If I am given a “choice” between being murdered by a shot through the head or being garrotted with a piano wire, I will try to run away, I will not affirm that “choice” and choose one. The Dems and the R’s have the same “values” (loot, war, rapine, legal impunity for those performing those 3 functions, etc.) and more importantly the same Sponsors who are the actual powers behind the throne. Just before the Dems threw the election back to the R’s, polls showed that 78% of Americans saw the US as “going in the wrong direction.” Choosing between one of the two Masks that will further impoverish you and destroy your environment and imagining that you therefore have “agency” in a “democracy” wins you nothing but a Darwin Award. It’s more or less on the same level as people who refused to wear masks or socially distance during the initial phase of Covid when death rates of the affected were 1.17% in the area of Northern California just north of where I lived at the time.
If you really want to make a better world, maybe you should organize with people who are getting screwed over like you as WSB maintains and not form a Circular Firing Squad so the “Deplorables” & “the Radical Left” can butcher each other while the Oligarchs laugh and make bets on the outcome? And just to be clear, nobody in the Dem. Party conjuncts inside a Venn Diagram with any of us in the actual “Radical Left”–& I use Radical in the sense of Rooted, not in the sense of Extreme. However, Republicans, since the Right is the power embraced by TPTB, are encouraged to be as Radical as they wish.
IF Donald Trump and his followers were remotely as disciplined and competent as the 3rd Reich’s High Command was at the start of WW II, they might be able to enact the actual Neo-Feudal Order which Peter Thiel’s pet Monkey Curtis Yarvin calls for, an official system of Kingship, monarchy, and peasantry, developed along caste lines. As horrible as that seems, I don’t think they have the ability to pull it off. (And I think that was a central point to Ian’s post here.)
The ones to be hated are the actual oppressors, on both the Far Right and the Faux (electoral) Left, NOT the other Crabs who are in the pot of boiling water alongside you.
Daniel Lynch
Re: recession.
— some metrics already show weakness. House prices & rents falling, loan delinquencies rising, food inflation hurting consumers.
— the stock market is over priced and ripe for a correction. While the stock market is not the economy, stock market panics do tend to make consumers and employers tighten their belts.
— the DOGE cuts are definitely a blow to the economy.
— on the other hand, Congress is leaning toward increasing military spending. That would be stimulative.
— Congress is leaning toward increasing the deficit, which would be stimulative.
So it’s a mixed bag. When Trump took office, the economy was already facing headwinds, and DOGE might be enough to tip the scales. Or, the military Keynesianism and continued deficit spending might be enough to keep it rolling along. I think it could go either way. But recession or not, the poor and working class will lose. That is by design.
GrimJim
https://youtu.be/3hZGVDzQmoI?si=HqFUwAbIYtPLtWvM
bruce wilder
What Trump and Musk and Musk’s minions are doing is nuts. It is chaos applied as a tactic, but in service of what strategy, beyond continuing to enrich the already absurdly rich, is really hard to discern.
The implied counterfactual of the OP’s title — that the economy would be just going along without this chaos in the federal government — doesn’t let us appreciate the sense of crisis that Trump and Musk and presumably others among the Tech Bros faction or maybe others feel. Obviously, they are bringing on the crisis with their chaos-inducing tactics, but they are doing that strategically because (I believe) they imagine that the U.S. and its neoliberal global financial and economic empire is nearing a critical juncture or inflection point. I don’t have any insight into the thinking of people like Thiel or Musk; I cannot believe they are really as stupid as their Randian ideology seems to make them, but I can believe that they are that adolescent and immature in their worldview. Their viewpoint on that capital-C Crisis of Empire may be narcissistic — a fear that the air is going out of the massive soap bubble, which is their mostly-only-on-paper, financial wealth, all of it resting on a foundation of dollar-denominated U.S. treasuries being printed at a furious pace and some absurdly over-valued corporate stock and real estate.
Ian’s previous post, Tiresome Reminder . . ., and of course many other recent posts, highlighted the extent to which the “real” foundations of American economic dominance have eroded completely away like so much beach sand, but only after that dominance was financialized. Financialization enabled the wealthy and their helpers among the corporate CEO class — now the billionaire oligarchs — to capture and hold onto their wealth, long after the real basis for that wealth was traded away or eroded away. And, not just capture and hold, but actually massively inflate that wealth. The concentration of that wealth — the mega-wealth — has increased markedly as well, as fewer and fewer giant business corporations control what remains of American business and the merely rich who sold out early are surpassed by the now mega-wealthy who managed to stay in The Game. This is true of individuals of which Elon Musk is simply the most absurd example and it is true of business corporations. The market valuation of Apple or United Health or Disney or even Amazon compared to Wal-Mart or Ford Motor is a tragic story.
The structure of the American economy, including the monetary, financial structure that gives this fantastic nominal wealth and economic power, designed as it is to be the central anchor of a global economy, rests on a now extremely brittle foundation.
There’s no obvious remedy. Or, maybe, there is an obvious remedy — obvious to someone with my lights, that is, eat the rich and let the absurdly elevated cost and rent structure of the American domestic economy deflate, shifting the distribution of real income down the social hierarchy. Everything ordinary people consume gets cheaper and people work a lot less, because we simply don’t do all the hucksterism and predatory and parasitic nonsense. A baseball ticket, a month’s rent on a two-bedroom apartment, or a doctor’s visit or a movie rental or a smart phone or another 30 days to pay off a credit card costs a lot less. There are no billionaires at the end and few centimillionaires. Giant business corporations break up or are broken. That “obvious” path is not obvious, because there is no imaginable path to get there that doesn’t involve massive and highly disruptive re-pricing of assets and therefore savings and investment vehicles and a lot of bankruptcy and corporate restructuring.
That’s a long-winded way of suggesting that we are witnessing a Panic of the Billionaires. I don’t know what they imagine that they can salvage in the Twilight of Empire and the Collapse of the Dollar. From afar, it seems like the idle, addled fantasies of teenagers smoking sumthin’ while pullin’ sumthin’ else to focus on cryptocurrencies and moving to Mars.
But, I don’t think they are wrong to panic. I think the status quo ante went past its sell-by date in 2006-8.
Different Clue has made the case that it would have been preferable to kick-the-can-down-the-road with the ostrich caucus, who — completely corrupt and clueless about how anything can work — wanted to continue on autopilot until the fuel ran out and the plane or balloon or whatever doomed vehicle we are on, crashed to earthen reality. DC argues that it would give the few with some dim awareness of what is really coming to prepare. It is a point-of-view to be sure. I am not convinced that any preparation is taking place or could take place that without fairly large-scale mass political organization.
Anyway, I think we should be cautious about a narrative that attributes “the crash” to the Trump administration’s chaos strategy, without reminding ourselves that they are responding to a crisis of Type A — things that the can not continue forever won’t.
Jan Wiklund
But of course.
Trump is himself a rentier – real estate. His henchman Musk is a rentier – platforms and government contracts. I bet the rest is of the same kind. They will not try to get out of the rentier economy.
If interested, read more about the rentier economy in Brett Christophers: Rentier capitalism. Or listen to him at https://www.youtube.com/watch?v=W98jFzvl7q4
marku52
Notice all the ferocious fight that the Dems are putting up against this?
Oops. …you meant they aren’t?
It’s ’cause this is all what they wanted to do anyway (remember Clinton’s “Grand Bargain?”) and are happy for the Pubs to take the blame for it.
Meet the new boss. Same as the old boss…..
different clue
@bruce wilder,
You are correct about what my case was. 4 more years on autopilot would have bought 4 more years for those people ( if any) who recognized the looming crisis of survival which is coming. As it is, the crisis of survival has been brought forward in time to right now, and there is no time to pre-prepare. People who understand the situation are going to have to help eachother to Survivalize in Place right now.
This is not to say that any such 4 years of autopilot would have been used by anybody to prepare anything. A large-scale mass political organization might could-have-been started and rolled into motion over a 4 year autopilot interlude. Now, it cannot and it will not.
4 years of autopilot would have given liberals, radicals, survivalists or whatever whatever to form a widely distributed and at-least-rudimentarily trained and armed movement militia network, in the spirit of the Wide Awakes of the very earliest Republican Party formation period. https://en.wikipedia.org/wiki/Wide_Awakes
In a spirit of political humor, such a movement could have been called the Wide Awokes.
Too late now.
Oakchair
Notice all the ferocious fight that the Dems are putting up against this?
—-
They’ve had a few “ferocious fights”. Such as trying to block the most anti-war cabinet appointee in 25 years –who was a former democratic congresswomen.
Trying to block a hard core environmentalist who thinks the FDA, CDC and HHS shouldn’t be a marketing arm for big pharma and industry –also happens to be a former Democrat and nephew of one of the most popular Democratic presidents in history.
They put up more of a fight against those two appointments then when they had the chance to enact a minimum wage increase, legalize marijuana extend the child tax credit, and extend Food stamps.
But all that had nothing to do with losing the election, they lost because people weren’t lectured enough about how racist, sexist and bigoted they are.
NR
Weird how this “hard core environmentalist” has no problem with the administration he’s serving in censoring all mention of climate change, rolling back environmental regulations, and going all-out for fossil fuels and away from renewables, isn’t it?
I guess we’re all just too dumb to understand how those actions are something a “hard core environmentalist” would support, eh?