We are heading toward a terrible recession. And it will hurt everybody — especially our declining middle class, those already in poverty, and our homeless citizens. Even the rich will lose some of their wealth.
How do I know this? My laptop told me when I asked it a few questions.
I asked my laptop, “What causes a Recession?” And the response I received — an Artificial Intelligence (AI) Overview — is a list of what we can expect as a result of actions taken by President Donald Trump and Elon Musk.
The number one item listed is a “Decline in Consumer Spending.” And we can expect to see an enormous decline as a result of Trump’s actions — coming from many directions.
The firings and layoffs of many government workers, who usually receive wages somewhat above average, will be spending a lot less. And the agencies where they worked will spend less as well.
Retail and food chains already are closing groups of their stores and outlets; and more will be forced to do so. That will mean more layoffs and less spending.
A second major cause of recessions is “Trade Conflicts.” And Trump is stoking the fires of those conflicts with his tariffs.
Canada and Mexico buy much more from U.S. suppliers and farmers than the U.S. buys from their producers. And Canadian citizens, which buy the most, are angry at Trump’s actions. So Canadians aren’t buying U.S. goods. Stores there are sidelining U.S. products, and U.S. businesses are feeling the pinch.
Canadians also are being urged to boycott travel in the U.S.
Similar attitudes are permeating throughout our NATO allies in Europe, and elsewhere, meaning the U.S. will suffer more from less tourism and overseas buying.
Another cause of recessions is “Fiscal Market Problems.” And we’ve already noticed how our stock market has been tumbling downward — indicating a growing financial crisis.
All of those actions also will affect two other causes of recessions: “Business Investment Decline” and “Supply Chain Disruptions.” Businesses abroad will invest less in U.S. sales when consumers here aren’t buying.
Economists have said repeatedly that it is consumers that drive the economy. And when consumers stop spending — except for essentials — the economy falters and recessions occur.
I also asked my laptop to list the results of a recession.
The list is long. It includes: increased unemployment; wage cuts and reduced job opportunities; falling profits and sales; increased business failures; tighter credit; erosion of asset values, high risk of loan defaults, increased stress and anxiety impacting health and well-being, plus a potential increase in crime.
And I asked the computer if we are facing a recession this year. The answer came as no surprise.
The economists are saying it depends entirely on Trump.
The answer added, “With the stock market tumbling, consumer confidence skidding and U.S. companies ramping up layoffs,” the nation could be “hurtling toward a recession amid President Donald Trump’s widening global trade war and federal job cuts.”
Minnesota Gov. Tim Walz this past week said, “Donald Trump doesn’t know how anything works. Donald Trump is this caricature that had a reality TV show that pretended like he knew how to run a business. The reality is, he doesn’t.”
And I recall a few years ago when I heard a commentator report on Trump’s attendance as a student at the University of Pennsylvania’s Wharton School of Business. A professor there was quoted as saying Trump was the dumbest student he ever had.
The Trump presidency “is already in a state of collapse,” according to Steve Schmidt, an independent political strategist who assisted earlier Republican administrations.
Schmidt warned, “Real damage will find its way to everyone in America. When the scar is left everyone will have a specific place to look and remember what MAGA did to them and our country. There will be no hiding the mark or the cost,” he added.
In his conclusion, Schmidt said, “Each day, madness swirls from dawn to dusk as Donald Trump produces his masterpiece.”
Meanwhile, Trump is losing in the courts where judges are telling him his actions are mostly unconstitutional and must be reversed. But Trump can, and probably will, file appeals. And he might defy the courts by ignoring those decisions.
Such delays or failures to act should be of great concern to all of us.
The possibility remains that an unstopped recession could go worldwide. The U.S. has the largest economy in our world, and the European Union is second. So the impact could go global, and possibly turn the recession into a global depression.
It was the U.S. economic, fiscal and political failures of 1929 that triggered the worldwide Great Depression of the 1930s, which lasted about 10 years. It took the war materials economies of Europe and Asia to end it.
All the warning signs are there. So we could be falling toward an actual depression unless we see substantial reversals by Trump and congressional Republicans — and very soon.
Will enough of them finally realize the fallacies of their actions in time to prevent the worst from happening? And will enforcement of court orders come too late?