Why Start The Trump Depression?
By Patrick Bromley
March 1, 2025
I believe the policies and actions of President Trump, Elon Musk / DOGE, and Trump administration officials will lead to a crashing of the economy and we will collectively call it ‘The Trump Depression’ since he loves to put his name on things.
I hope that I am wrong about the future of the United States economy but here are the primary reasons I am pessimistic:
Federal government layoffs: While Musk and DOGE are gleefully terminating as many government employees as they can, it is being done in a haphazard manner and the more workers shown the door the greater the concern.
Government contractors: DOGE is also ending contracts which results in lost revenue for contracting companies and thus more layoffs. I would speculate that for every government employee laid off there are an equal number of contractors who are suddenly out of work. If 500,000 feds are laid off, then there will be 500,000 contractors as well. The laid off contractors are rarely thought of when laid off workers are discussed by politicians or media.
Personal note: I am a federal government contractor who has been indirectly affected by DOGE’s actions. My contract ends in late March 2025, but our client wanted to keep my team around and was discussing extending our tasks. However, due to the uncertainty created by DOGE’s actions they are not offering any new contracts.
Spending cuts: While most would agree the government needs to spend its money better, the haphazard and reckless way DOGE is making cuts will drastically affect US businesses. The Federal Government is the biggest buyer of goods and services in the country. While it depends on where the money is spent, it is estimated that $1 trillion in US government spending employs 10-13 million workers (from ChatGPT and Grok). Suddenly cutting $1 trillion will take revenue away from thousands of US businesses. These cuts will result in more layoffs and many businesses closing.
While there are many other policies that may wreak havoc on our economy (e.g., tariffs) the items listed above will undoubtedly play a major role in an economic downturn. Rising unemployment numbers are one of the first harbingers of a recession. Estimating 500K feds are laid off, meaning an equal 500K contractors as well so that is 1 million workers directly laid off. Spending cuts will take a little longer to have an impact, but the low-end estimate is 10 million workers would be out of work.
With potentially millions of workers affected, the housing market will slow and possibly collapse. Spending on goods and services will slow drastically, meaning restaurants and retailers will lose revenue and resort to layoffs. Then the economic death spiral continues with less buying of cars, less spent on tourism, and on and on until we hit rock bottom, and The Trump Depression takes over our country for years to come.