Here’s my prediction for 2025: prices will rise and purchasing power will fall. The national debt will continue to skyrocket. The central bank will then force down interest rates—by printing money—to facilitate trillions more in borrowing for the federal government. There will be no cut to federal spending. Taxes will go up, either through tariffs or some other tax. Meanwhile, the “inflation tax” will impose a growing burden on ordinary people. The United States will be funding and supporting militarism and war across the globe.
I don’t need to know who wins the November election to make these predictions. All these things will happen no matter who wins.
I know many Trump supporters who argue that things will be “less bad” if Trump wins. That’s a reasonable guess, especially given that Harris is clearly the status-quo candidate. For anyone who doesn’t like the status quo—which, frankly, is pretty awful—it’s hard to see how a vote for the current regime is likely to improve anything.
But let’s not kid ourselves. Neither of the major candidates will do anything at all about the nation’s fiscal and monetary ticking time bombs. If elected, neither candidate will rein in the central bank, reduce government spending, or help people regain the purchasing power stolen from them via price inflation.
The core of our out-of-control interventionist economy will not be touched by either candidate.
In this issue of The Misesian, economist and Mises Institute Senior Editor William L. Anderson examines both Harris’s and Trump’s economic platforms to help us understand exactly what the regime has planned for us. You will probably not be shocked, dear reader, to discover that free markets are decidedly not “on the ballot.”
With housing affordability at historic lows, the dollar having lost more than 20 percent of its purchasing power in four years, and the economy slowing to a snail’s pace, both candidates still think they can just continue on with more of the same. There’s a reason for this. As Anderson notes, “neither candidate knows how to deal” with our economic
But this strategy of spending more, inflating the money supply, and hoping for the best eventually crashes on the shoals of reality. We saw this in the 1970s when the Nixon and Carter administrations thought they could just keep doing what the regime had been doing since the New Deal: tax, spend, and inflate. As 1970s stagflation set in, Arthur Burns, the Federal Reserve chairman at the time, tried to engineer a soft landing in the wake of the inflation of the Nixon years. He failed. Eventually the only answer to stagflation was to allow interest rates to rise and to then endure the inevitable
Are we in a similar situation today? Economist and Mises Institute Senior Fellow Brendan Brown seems to think so. In our thorough Q&A with him, Brown, who is an expert on monetary history, explains why we are headed for an easy-money-fueled crisis that can be delayed but can’t be avoided.
For forty years, the American state has relied on the same tools of monetary and fiscal stimulus to inflate its way out of every new economic crisis. It’s unclear, however, how much longer this can work. In the years to come, Austrian School economics will be essential to understanding our precarious economy.
