How To Survive The Trump Presidency
Time to sober up, let's talk business
Donald Trump has been elected the next president of the United States. Congratulations to all the Trump voters – I hope you enjoyed your celebrations. But unfortunately, now it's time to sober up and get back to business. This second Trump term marks a pivotal point in world history. While we may not be able to predict everything that's going to happen, we can at least try to "read the tea leaves."
Money
Trump ran on tax cuts, reducing the deficit, ending inflation, boosting manufacturing, eliminating taxes on tips, supporting a strong dollar, keeping Social Security & Medicare, and crypto. All of this sounds amazing, but we have to understand what it really is: campaigning. Never trust a politician when they're campaigning; they will say anything they think will get them elected.
Total government spending for 2024 is currently $6.75 trillion, which is 23% of GDP. Here's the current breakdown:
Trump has a problem here. He made a bunch of promises that contradict each other. He's the type of guy who wants the economy to look good so he can boast about his numbers, but he also wants to reduce the deficit? Trump is planning to make Elon Musk the head of a "Department of Government Efficiency." The assumption is that Elon will reduce government clutter and, in turn, reduce spending. This sounds great, but how much spending can be reduced, exactly? Social Security and healthcare make up around 36% of spending, but Trump claimed he wouldn't touch those. He will likely increase defense spending, which is currently at 13%, the same as debt interest payments. We're already at about 62%, and more if defense spending increases. What's really left to cut? Transportation? Veteran benefits? Those make up less than 5% of spending. The U.S. government employs around 2.5 million workers and pays them around $300 billion. Even if you fired every government worker, the impact on spending would be negligible.
Let's say he's able to cut about 5% of spending, that would be great. But there's another huge issue: Trump ran on major tax cuts and mass deportation. Taxes are the government's income. If you cut taxes, you have to reduce spending by at least that much, or you're adding to the deficit. During Trump's first term, he actually spent more money than all of his predecessors, and Biden followed in his footsteps. What Trump campaigned on sounds good in theory, but when you run the numbers, things look a bit...
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Tariffs
Okay, okay, you're going to say Trump also campaigned on tariffs.
Yes, he did.
Trump boasted on the Joe Rogan Experience Podcast that the U.S. government used to be fully funded by tariffs. This is true, before income taxes, the government was largely funded through tariffs. But that was in the 19th century, when the U.S. government was still very small. Unfortunately, in 2024, the U.S. government is large and in charge. The U.S. is a global empire, plus there's healthcare, Social Security, and other social services.
A tariff is a tax that a government charges on goods coming into their country from other countries. In 2023, U.S. goods imports from around the world totaled $3.8 trillion. Let's say, theoretically, Trump puts a 10% tariff on all imports and we ignore all consequences; that's only $380 billion in revenue. When annual government spending is almost $7 trillion and the national debt is nearly $36 trillion, that's not even a dent. The U.S. government collected $4.92 trillion in taxes in 2024, meaning you could put 100% tariffs on imports, and it still wouldn't replace regular tax revenue.
Another thing about across-the-board tariffs: they don't make sense for the U.S. or Trump. If you want to bring all levels of manufacturing back to the U.S., you're going to need more people to work in those factories. Trump supports mass deportation, closed borders, and his base is anti-immigrant. Unemployment in the U.S. is currently at 4.1% there aren't enough workers. You can't be for all-around tariffs and against mass immigration; it doesn't make sense.
All of this is to say, there's a window open from now to about one to two years into Trump's presidency to take advantage of the markets before people realize that Trump can't do most of the things he said he would. If he somehow does manage to do those things, the pain will be immense (at least during his term).
What you'll most likely get are tax cuts and favorable crypto regulation—they're the easiest things. Look forward to that.
I don’t do crypto analysis I leave that to people like
.Foreign Policy
I already discussed foreign policy in a previous article:
TL;DR: The Ukraine situation will prove more difficult than Trump is anticipating, and the chances of making a lasting peace deal are pretty low. Russia has lost too much in this war to just stop here, they're going to ask for something big. Plus, just because Putin agrees to a deal doesn't mean the Ukrainians and Europeans will. For a peace deal you need all sides to agree. Expect the unexpected when it comes to this conflict.
The Middle East will continue "middle-easting," and so will Africa.
As for China: if Trump increases tariffs on them, relations with the U.S. will be in the gutter. I advised everyone to move their businesses away from China more than a year ago for this exact reason. If your business isn't diversified away from China right now, you're going to be in very uncertain times.
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I often enjoy your writing, Thanks. Do we know what the categories “health” and “income security” represent? I’ll go to the treasury page and dig around also but figured I’d ask too here for discussion’s sake
Good post because I think what a lot of people miss in the aftermath of their side winning an election is remembering that they still have to do a good job. And it’s entirely possible for someone to get a chance to be president and screw up/make a big mistakes. No one “won” any issue on election day per se you were just simply given an opportunity.
I also think people are typically disappointed by Presidents performance relative to their excitement prior due to festivities. Best to keep an open mindset bc history is crazy, but be prepared for an underwhelming outcome at times imo