With a strong plan and unprecedentedly quick actions, President Donald Trump has entered his next term. He launched his Department of Government Productivity, spearheaded by Elon Musk, in the first fortnight of his presidency, signed 73 professional orders, sent his foreign policy group to the Middle East to broker an agreement with Ukraine and demand that Hamas be put to an end, and freed Immigration and Customs Enforcement to impose border security regulations. He also launched his Border Patrol program to maintain our southern border. All of that is both fine and common.
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However, a danger is still lingering in the next Trump term.
That danger is economic crisis.
Donald Trump’s business was hampered by Joe Biden’s departure.  ,
The inflation rate remains high, at 3 %, and moving in the wrong direction, interest rates are already high by recent standards, at 4.33 %. In order to boost the economy ahead of the vote, the Federal Reserve appears to have taken a risk.
The Dow Jones Industrial Average is trading at nearly 25 days price to earnings, the so-called Magnificent Seven companies ( Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and Nvidia ) average a P/E ratio of over 50. For point of reference, investment extraordinaire Benjamin Graham, leader of Warren Buffett, recommended that a good P/E amount usually capped out around 15.  ,
In other words, there is a great probability that we are also in an AI bubbles, given that the technological advancement of AI, amazing though it is, has led to investment that has yet to yield great productivity gains. For what it’s for, this isn’t a blow on AI; it’s just that every new technology generates a spurt of funding that ultimately descends into the most lucrative programs. The internet bubble of the late 1990s wasn’t an indication that the computer was overrated. However, it is fair to say that many of the stocks most closely related to AI will experience decline in the upcoming years.
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In the meantime, the excessive government spending is continuing to swell money into an already inflated economy. In 2024, the federal government spent approximately$ 6.75 trillion. The majority of those funds are spent on entitlements, means-tested welfare programs, and interest on the national debt. DOGE won’t be able to change much about this. The reality is that there is no such thing as a serious fiscal restructuring in the United States. And the world is already shifting its attention away from the dollar as the world’s reserve currency, according to a report from Brookings Institution, which shows that the dollar now accounts for only 59 % of global reserves, down from 70 % in 2000. As the Trump administration pursues sanctions and tariffs, that trend could accelerate.
So, what should Team Trump do? First, the focus should shift quickly to reducing regulations, which is the sand in the wheels of American commerce. Second, the Republican Congress must move with alacrity to enshrine Trump’s 2017 tax cuts permanently, ensuring a predictable tax regime for purposes of investment. Third, it should be seriously thought about reevaluating those means-tested welfare programs, which are the main contributors to our persistent spending crisis, according to House Budget Committee Chairman Jodey Arrington.  ,
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There is only one way for the United States to achieve economic freedom and fiscal sanity. Both can be achieved. However, the Trump administration needs to act quickly because the ship is already being sunk by decades of careless behavior that has been blown into the side of the American economy.
