Trump's 2024 Comeback: A Forecast Fulfilled and the Fiscal Challenges Ahead

Donald Trump’s Tax Cuts Would Add to American Growth—and Debt He has unfinished business in making his tax reforms of 2017 permanent.

“OF THE MANY differences between Donald Trump and Joe Biden, perhaps the easiest to quantify has to do with tax policy. Mr. Biden has long pledged to raise taxes on both the wealthy and companies. Mr. Trump’s main legislative achievement from his presidency was a tax-cut package in 2017.

Unsurprisingly, many corporate bosses prefer Mr. Trump on taxes. The big economic question is whether they are being short-sighted and overlooking America’s fiscal health, which they also profess to care about.”

(The Economist, January 18, 2024)

?

When Donald Trump assumed office in 2016, net federal debt stood at 75% of GDP. By the time he left in 2021, it had climbed to 97%. The Congressional Budget Office (CBO) now projects this figure could soar to 181% of GDP within the next three decades, with annual interest payments surpassing combined spending on defense, education, and infrastructure—a dire scenario for economic stability and business confidence.

Critics cite the debt surge under Mr. Trump’s presidency as a sign of fiscal irresponsibility, warning a second term could worsen it. Making expiring tax cuts permanent would add $350 billion annually to the deficit, per the CBO. These challenges highlight the difficulty of managing America’s growing debt.

The Debt Dilemma: Trump’s Fiscal Legacy and the Road Ahead

With Mr. Trump now securing another term, his policies will likely center on deregulation and extending tax cuts—strategies that could boost long-term economic growth but are expected to worsen short-term deficits.

On January 22, 2025, President Trump signed a Presidential Memorandum to deliver emergency price relief for American families and address the cost-of-living crisis. This initiative includes actions to:

• Drastically lower housing costs and expand housing supply,
• Eliminate unnecessary administrative expenses and rent-seeking practices inflating healthcare costs,
• Remove counterproductive requirements raising the costs of home appliances,
• Create employment opportunities for American workers, including drawing discouraged workers into the labor force, and
• Eliminate harmful, coercive “climate” policies driving up food and fuel costs.

However, while these measures aim to address immediate cost pressures, sustainable debt management would still require politically sensitive reforms to large social programs, a challenge Mr. Trump has consistently avoided.

I said in September 2020: “Trump and his fanatics are not going away now. In fact, the really best [real estate] set up would be a Trump loss for this time, 2020, and then a comeback win in 2024.”

How was I able to make such a forecast? Because the real estate cycle has to fulfil.

The one thing I learnt whilst writing my book ‘The Secret Life of Real Estate and Banking’ is that the cycle is almost like a living, breathing thing. It seemed to do everything possible to repeat, and repeat exactly on time.

The time cycles also interest me. We’re now 30 years removed from Trump’s bankruptcies in the late 1980s and early 1990s, which were spectacular and left him with the largest tax losses ever recorded by a U.S. citizen. That era of massive lending that looks set to develop even further under president Trump looks very likely to set up a U.S. crisis that may echo in 2026-2027.

Remember, history doesn’t repeat itself in exactly the same way. This time, we may see a U.S. dollar currency crisis as inflation rises and interest rates follow.

While this is speculation on my part, the setup is clear.

IMF Data, October 2024

Global public debt is alarmingly high. By the end of 2024, it is expected to exceed $100 trillion, or 93% of global GDP. By 2030, it could approach 100% of GDP—10 percentage points higher than in 2019, before the pandemic.

Consider how, back in 2012, the world was obsessing over the volume of global debt. Now? It’s barely mentioned—a testament to media bias. Governments don’t want us worrying about debt, so it’s not on the radar.

Remember: in any looming end-of-cycle crisis, land prices must fall first. A really serious crisis won’t happen without this precursor.

Now, let’s focus on the post-current election environment. Trump continues to rally his supporters with fears of suburban violence (despite U.S. city violence trending down for decades) and promoting unsubstantiated conspiracy theories. The real danger, however, is the mounting debt tied to a 14-year land price surge that will likely culminate around 2026.

Leaders like Trump divert attention from these pressing issues, and he’ll likely do so again in his second term.

If you want to know what comes next, sign up here: https://realestate.propertysharemarketeconomics.com/newsletter-property-share-market-economics/

Best wishes,

Phil Anderson