Will Trump Crash the Economy in 2025? What Leading Economists Say

In just a few weeks into 2025, a whirlwind of economic decisions by President Trump has everyone asking: Could these bold moves lead us to economic disaster, or are they the tough choices needed to steer America back on track?

From incentives encouraging federal workers to resign—impacting even the IRS—to stricter border enforcement that could tighten our labor markets, and new tariffs that will make everyday goods more expensive, these policies aren’t just headlines. They’re real changes that could affect everybody. But what’s the real story?

Today, we’re breaking down the actions taken, the potential impacts, what our leading Economists say, and what history might tell us about our future.

Where Does the U.S. Economy Stand Today?

In 2024, we saw:

• GDP growth slow down to just 1.8%, a sharp decline from previous years.

• Unemployment numbers at 3.9%, but slowly creeping upwards.

• Consumer spending tightening as goods become more expensive due to tariffs and interest rate hikes.

• Higher loan costs making it harder to afford homes, cars, and other essentials.

People are already feeling the pinch, and if these trends continue, we could see an economic slowdown.

Experts also point out that rising corporate debt and uncertain global markets are adding more pressure to an already fragile system. If businesses struggle, job losses could follow, creating a ripple effect across multiple industries.

Business Slowdowns and Job Cuts

On the business front:

• Investments in key sectors like construction and manufacturing are slowing down.

• Companies are bracing for economic turbulence by focusing on cost-cutting and layoffs instead of expansion.

• Tariffs and stricter immigration policies are creating supply chain disruptions and potential labor shortages.

Some businesses are already adjusting their hiring strategies, shifting toward automation and outsourcing to cut costs. This shift could mean fewer job opportunities in the U.S., affecting both blue-collar and white-collar workers.

IRS Hiring Freezes and Tax Delays

Let’s not forget about the impact on our tax system:

• The IRS is under a hiring freeze, leading to processing delays.

• With IRS Commissioner Danny Werfel resigning, tax season could be more chaotic than ever.

• Millions of Americans rely on tax refunds, and any delays could create a ripple effect across the economy.

A slower IRS means delayed tax refunds, audits, and assistance, which can make financial planning more challenging for businesses and individuals alike.

Are We Seeing Signs of a Great Depression Repeat?

Looking back at history, major economic downturns like the Great Depression of 1929 didn’t happen overnight. They were caused by a mix of factors, including:

• Rampant speculation in the stock market.
• Excessive reliance on credit and overproduction.
• Protectionist policies like high tariffs that choked international trade.

Fast forward to today, and we see some unsettling parallels:

• Global debt levels have skyrocketed to $307 trillion, nearly four times the world’s GDP.
• Speculative bubbles in real estate and tech stocks are growing.
• The wealth gap is widening, making the economy more vulnerable to financial shocks.

Protectionist policies like tariffs played a key role in worsening the Great Depression. Could today’s policies have a similar effect?

What Do the Experts Say?

Leading economists are divided on what’s ahead. Mark Zandi of Moody’s Analytics remains cautiously optimistic, believing strong consumer spending could prevent a full-blown recession.

On the other hand, Nouriel Roubini, often called “Dr. Doom,” warns that high debt, rising interest rates, and global tensions make a recession inevitable. Federal Reserve Chair Jerome Powell has voiced concerns about balancing inflation control with economic stability.

Meanwhile, IMF predictions suggest global economic growth could shrink to just 2.1% in 2025, a figure dangerously close to recession territory.

Some argue that these economic policies might have short-term pain but long-term gain. However, with rising debt and global uncertainty, many are bracing for a downturn.

Final Thoughts: What Should You Do?

So, are we witnessing necessary pain for long-term gain? Or are we headed toward an economic downturn that could echo the Great Depression?

The truth is, no one knows for sure. But staying informed and prepared is key.

Here’s what you can do:

• Keep an eye on economic trends – Understanding market changes helps you make smarter financial decisions.

• Diversify your income sources – If a downturn hits, multiple income streams can provide stability.

• Manage debt wisely – High interest rates make borrowing more expensive, so consider paying off high-interest debt first.

• Stay updated on policy changes – Government actions could impact taxes, jobs, and investments.

Share your thoughts in the comments of the YouTube video—let’s discuss what this means for our financial future!