Edited by Boris Nezlobin
Cover Photo by Mehek Saini
On the 25th of September, the US Bureau of Economic Analysis reported that in the second quarter of 2025 the projected annual gross domestic product (GDP, the value of all finished goods and services produced in the US) grew by 3.8%. This was a surprising economic report for those observing the state of the US economy under the Trump administration, especially considering all the troubling decisions the administration has made. In allowing Americans to Venmo the government to help with the national debt (which suggests that the US could default on its debt), and by removing the Bureau of Labor Statistics (BLS) chief after an unfavorable jobs report, the administration has prompted economic worry among both the population and among professionals.
As it seems, the US economy under Donald Trump hasn’t been as drastically affected by the tariffs, immigration reforms, and international discord ravaging his second term as many expected. In fact, since the beginning of his first term, the stock market’s value has increased by 13.6% despite brief major crashes.
However, the growth of the United States macroeconomically isn’t reflected in the lives of American consumers.
The Ghost Recession
According to the Bureau of Labor Statistics, the US Consumer Price Index (CPI) has continued to rise since the start of Trump’s second term, by about 3% per year. Goods continue to rise in price as affordability (termed a “hoax” by President Trump) becomes even more of a crisis in the US. Even as reports indicate that inflation has stabilized, public surveys continually demonstrate that the average American experiences high rates of financial strain. Household debt, including credit card and mortgage payments, remains close to record levels at $18.20 trillion (a $4.6 trillion rise from 2019). Delinquency rates have also risen to 4.3%, meaning that many Americans have some level of overdue debt. As an even more harrowing indicator of the affordability crisis, the prevalence of “buy now, pay later” services is drastically increasing. Over Black Friday, almost $750 million worth of purchases came through such services (e.g. Klarna), meaning most of the “money” paid for these purchases does not exist—at least not yet. Historically, the nonexistence of money being reported in states’ economic statistics leads to “market correction.” This process makes business leaders tremble in their corner offices, and is better known as an economic crash. This is exactly what caused the Asian financial crisis of 1997 and the global financial crisis of 2008.
Furthermore, the value of the US dollar has fallen about 15% relative to the Euro from the end of Biden’s term—as of December 2025, the value of the dollar is the lowest it’s been in 14 years. The unemployment rate has risen to 4.4%—the highest it’s been since the initial surges of the COVID pandemic in 2021. More alarmingly, inflation hasn’t actually gone down. The period of disinflation in Biden’s last two years in the Oval Office, which visibly eased the pain on consumers, has been totally reversed by the Trump presidency’s climbing inflation rates.
One confounding factor that makes this data harder to obtain in the first place is that the government’s recordbreaking October-November shutdown ended up freezing releases of data about the US economy. Those reports are expected to come out later this week. This means that economists and business owners have been flying blind for three months with no information about the state of the economy, basically ensuring that their decisions are based on pure speculation. This complexity is exacerbated by the aforementioned firing of former BLS chief Erika McEntarfer. Trump’s replacement for her, E.J. Antoni, was a senior economist at the far-right Heritage Foundation, otherwise known as the authors of Project 2025. This has raised concerns that Antoni could be a political appointment rather than a technocratic one, meaning US economic data could be even further obscured.
So, while the economy America shows to the world is doing well, the economy Americans actually interact with is in a serious recession.
The Hype Economy
The US was arguably designed to prevent the poor from obtaining true democratic control, which would’ve, at least in the Founders’ eyes, brought the rich down from power. Our founding documents are bordered with fears of democratic excess and anarchy, which has allowed us to “shift the burden” in the words of Noam Chomsky to the poor. Our economy is composed of nonproducers like bankers and financiers, who have been shuffling money around for years and years—without the hard currency to back them up. The government’s lack of oversight and regulation has resulted in new iterations of financial magic to cause more recent economic crises.
Nonproducers, who have been moving money with decreasingly enforced regulation, account for most of the growth of America’s macroeconomic statistics and largest corporations—Apple, Microsoft, Amazon, Alphabet, and NVIDIA—to the point that the companies account for nearly a quarter of the total market capitalization of the S&P 500. The S&P index is frequently used as a proxy for the entire stock market. The indices are disproportionately represented by these firms, thus becoming more alien to the financial context of common households. In particular, standard stock indices do not account for changes in employment, wages, inflation, or consumers’ purchasing power. This means that even as NVIDIA’s growth—led by speculative demand for chips used for artificial intelligence—may increase, the real market in rent, the cost of groceries, and debt may continue to worsen; it’ll be offset by speculative growth.
Furthermore, these firms employ a tiny portion of the United State’s workforce, especially in contrast to sectors like services, healthcare, education, and retail. Economic insight being reduced to technological industries thus plausibly raises perceptions of prosperity. It does not enhance the material living conditions for most families, however.
Those huge corporations, starting in the 1970s, have started to offshore manual labor, because it’s cheaper and requires less regulation. The US itself has become a mainly ‘non-producing’ country. Only 14.5% of US employment is taken up by primary and secondary sector work. That’s the work directly ‘harvesting resources’ (agriculture, raw materials) and the work assembling finished products.
The other 85% of employment is sourced in the tertiary sector, which includes (but is not limited to) non-producer occupations. And while those jobs are key, especially for a highly developed and very rich country, they mirror a very different economic landscape than the agrarian one envisioned nearly 250 years ago. Our economy is much less concentrated internally, and in our success we have tethered ourselves to the international community. We’ve ensured our success and bolstered those around us.
Despite that, the American economy one encounters today is more resemblant of a recession, as opposed to the expansion media outlets report. Decelerating wage growth, reduced opportunities, increasing layoffs, and elevated part-time jobs all point to worsening living conditions that current macroeconomic indicators are failing to capture.
Part of this discrepancy lies in the methods in which GDP and other such metrics are calculated. GDP, while quantifying the total revenue, does not consider the source or recipient. In practice, speculative trading can contribute to an increase of GDP through intangible expansion like companies’ stock holdings in other companies. The Federal Reserve, in its most recent survey of Household Economics and Decisionmaking found that a significant portion of the American public are financially worse off in 2025 than in the previous year. This happens concurrently with the largest firms using tax savings and stock to accumulate their financial assets. GDP doesn’t accurately represent the state or growth of the real economy today because economic growth is no longer occurring at the level of the individual. It’s all eclipsed by the fake economy driven by speculation rather than concrete goods.
Corporate Freedom
In the most formal sector of the economy, this crisis is exacerbated by current tax measures that allow dominant firms to suppress wages and control the majority of revenue. Domestic tax policies, particularly following the Tax Cuts and Jobs Act of 2017, have allowed for large corporations to pay lower tax rates for alleged benefits of higher investment rate or employment opportunities. Research indicates, however, that corporations often use tax savings to engage in stock buybacks and compensate shareholders, primarily enriching wealthy investors and forgoing wage increases.
Antitrust policy, or a lack thereof, also contributes to the disparity. Despite its long history in the United States’ law, research indicates that antitrust enforcement has decreased, even as industry concentration has increased across major sectors of the economy. This allows dominant firms to entrench their supremacy, leading to reduced competition. Thus, firms can artifically decrease prices in the short term to effectively subsidize their own goods, forcing out competition. In the longer term, this creates a monopoly, slowing innovation and raising prices. Persistently low and falling interest rates in recent decades have further incentivized acquisition and stock buybacks that propel market concentration and price inflation.
If current conditions persist, the economic divide that got us here will be amplified. As a small handful of enterprises establishes control over market values, workers and consumers will bear the resulting costs.
What Now?
The federal government has made some level of attempts to steer the economy back in the right direction. Just three days ago, the Federal Reserve cut interest rates for the third time this year by an additional 0.25% in a desperate attempt to stimulate consumer spending by reducing the cost of borrowing money. The problem is that this move is too little, and far too late. The cost of borrowing money is irrelevant in this scenario because one core problem at the center of the US’ silent economic crisis is that debt is being taken out with no hope of ever paying it back. Adding more debt to the US economy is at best a slight improvement and at worst only furthering the problem of nonexistent money and higher projected value than delivered—no matter how much the administration receives through their public Venmo.
Ultimately, considering the numbers the US government would have to put up in order to avert the imminent crisis and the unlikelihood of Trump’s administration being able to pull off such a move, the most obvious scenario becomes a market correction.
What Does Market Correction Look Like?
The top ten companies in the US are already more overvalued than they were during the dotcom bubble. Market correction occurs when investors pull their money from the market in order to reflect something closer to the real economy apart from economic hype and overvaluation.
Historically, market correction has caused crises like the Great Depression of the 1930s, the 1997 Asian Financial Crisis, the 1999 dotcom bubble, the 2008 Great Recession, and others. Eventually, the overvaluation of these companies will come due and investors will flee. Throughout the financial crises of the past, the US has been able to rely on other states to bail us out. The dollar’s status as the global reserve currency tied the well-being of the world’s economy to that of the US. However, times aren’t the same as they used to be. The Trump administration’s hostile foreign policy has largely driven the US’ longest-held strategic and economic partnerships into disarray. As a result, states and regional blocs like the EU are pursuing economic decoupling from America. Furthermore, regional blocs are engaging in more and more local intradependence as the world becomes more hostile to US-centric interstate partnerships. This is all to say that because states are becoming less dependent on the US, their economies are less dependent on propping ours up. So, in the event of a new financial crisis, the US might be on its own.
The Future of Our Two Economies
The speculative nature of the US economy is doomed to come crashing down sooner or later. For US consumers, it’s already getting more difficult to make it. However, while things are going well on Wall Street today, the companies that are artificially inflating the US’ GDP with the expectation that when the bubble pops they’ll receive a bailout will experience market correction. As the policies of the Trump administration have been flimsy at best and actively harmful at the worst, the economy is effectively doomed to a correction with no foreign or domestic bailout. The crash could potentially bring the US economy to its knees as the irresponsible nature of speculative investment takes its toll. Now more than ever, it’s critical that the US act to mitigate these risks and protect Americans from impending economic doom.
Leave a Reply