DOGE Derangement Syndrome

I have seen a lot of crazy things in my lifetime.

I don't know that I have seen anything crazier than the Left's reaction to Elon Musk and DOGE.

We have heard a lot about Trump Derangement Syndrome (TDS) over the last few years that describes the intense hatred, at times based on nothing more than an emotional reaction, of anything to do with Donald Trump. 

Often there is no rational reason for the opposition to Trump. He might doing the exact same thing as a previous President or have the most virtuous objectives. He will still be seen as evil and dangerous by those with TDS.

DOGE Derangement Syndrome is even crazier.

Elon Musk was the darling of the Left just a few years ago as he built Tesla into the dominant electric car company in the world.

We were told by the Left that electric vehicles were absolutely critical if we were to face the existential threat of climate change.

The Democrats passed legislation committing trillions of dollars to a Green New Deal in which electric vehicles and battery technology were the key components of the effort.

Donald Trump ran on a platform that promised the establishment of a Department of Government Efficiency that would be led by Elon Musk.

The mission of DOGE is almost exactly the same as a similar "Campaign To Cut Waste" that was established by President Barack Obama in 2011.

It was intended to "hunt down and and eliminate misspent tax dollars in every agency and department from across the federal government."

Joe Biden was named to lead the "New Board of Fraud and Waste Watchdogs".

Did that effort amount to anything?

Like most things in Washington, D.C. it was all theater.

Elon Musk and Donald Trump are not performing on a political stage.

They are intent on producing real results.

What is crazy about all of this is who should be against finding and stopping waste, fraud and inefficiencies in the use of federal tax dollars?

We might start by looking at those benefiting from the waste and fraud.

The United States is running $2 trillion annual deficits. It has almost $37 trillion in federal debt that is now costing well over $1 trillion in interest payments per year.

Something has to give.

Elon Musk understands physics and he also can do the math.

For almost his entire life Musk was a committed liberal Democrat.

He voted for Obama, Hillary and Biden.

However, he came to the conclusion that the United States was heading to fiscal disaster if something was not done to bring the federal budget closer to balance.

Musk started to fall out of favor with the Left when he bought Twitter in October, 2022 for $44 billion.

Musk stated that he purchased Twitter because he became increasingly concerned about preserving and promoting free speech that he sees as essential to democracy and humanity,

In fact, if you look back at most everything that Musk has done, his primary motivation initially has been what he could do for humanity rather than profits.

Musk got involved with Tesla because of his concern about climate change, as a way to reduce carbon emissions and his broader goal of insuring humanity's long-term survival.

His interest in Mars and the creation of SpaceX was also rooted in his concern for humanity's long-term survival. Musk believes that by colonizing Mars mankind has better odds of surviving should something happen to Earth.

Reed Hoffman who worked with Musk at PayPal and later started LinkedIn is quoted as saying this in Walter Isaacson's biography Elon Musk published in 2023.

“What I didn’t appreciate is that Elon starts with a mission and later finds a way to backfill in order to make it work financially.” Hoffman made this observation after initially questioning how Musk’s plan to send rockets to Mars with SpaceX could be a viable business. He later realized Musk’s approach was driven by a mission—making humanity multi-planetary—rather than immediate financial gain, with the business model evolving to support that goal over time.

Musk did not start SpaceX with a goal of becoming NASA's primary launch platform.

He had no idea that SpaceX would later develop Starlink.

Or that Tesla would become the leader in autonomous driving technology.

Or battery technology.

Or that Tesla's technology would then be leveraged into robotics.

And Twitter's platform would be integral to developing one of the most robust AI systems in the world.

I am sure that Elon Musk also did not believe that simply looking for government fraud, waste and inefficiency would cause people to start defacing Tesla vehicles and torching Tesla dealerships.

Source: https://abcnews.go.com/US/tesla-vehicles-vandalized-us-musk-began-white-house/story?id=119910817

After all, Tesla is the car company that has been most visible in the mission to curb carbon emissions and  climate change.

The majority of Teslas on the road today are also owned by Democrats.

Source: https://www.npr.org/2025/03/13/nx-s1-5325321/elon-musk-tesla-politics-republican-buyers-sales

Therefore, when a Leftist defaces a Tesla they are most likely harming the vehicle of a fellow Democrat voter.

On the one hand these people talk about the existential threat of climate change and the lack of humanity in the world today and then turn around and attack the one man who has done more on these issues than anyone else in the world?

How does that make any sense at all?

They also seem to not care one iota about the billons of waste that DOGE has uncovered and is publishing on a website that is transparent in every respect.

Source: https://doge.gov/savings

One example on the "Wall of Receipts" on the DOGE website is below.

There was actually a multi-year contract in place from the Department of Interior that was going to pay $2.9 billion to an organization named Family Endeavors, Inc. for a care facility for up to 3,000 unaccompanied illegal alien minors.

Over $400 million had already beens spent on the contract until DOGE identified the contract for cancellation.

Source: https://doge.gov/savings

$2.9 billion to care for up to 3,000 children?

That is almost $1 million per child.

Did that include future tuition to Columbia or Harvard?

Is that waste, fraud or just government inefficiency?

I have also been shocked in the DOGE work to see the extent and amount of contracts given to outside consulting firms.

For example, the consulting firm Booz Allen Hamilton derives 98% of its revenue from U.S. government contracts.

Credit: https://x.com/profstonge/status/1895526641369301020/photo/1

It is the same with many of the Non-Governmental Organizations (NGO's) that DOGE found were relying almost exclusively on government revenues.

How is it non-governmental if it could not survive on its own without government revenues?

There is a lot of craziness going on.

However, DOGE Derangement Syndrome may be even crazier than Trump Derangement Syndrome.

That is something that I did not think was possible.

Two years ago Leftist Democrats were telling us the world was going to end if we did not all drive electric vehicles. 

Now is seems that it will end if Elon Musk finds one dollar of waste and fraud in the federal budget.

That is why it is now apparently justified to deface Tesla's and firebomb Tesla dealerships.

Crazy does not begin to describe it.

Kids Are Expensive---Not Having Them Is Even Costlier

 I came across this interesting clip of the Colorado House Speaker speaking in support of a bill (Senate Bill 183)  before the legislature in that state that would provide state funded abortions under Medicaid.

Speaker Julie McCluskie (D) argued that despite the additional cost of using state tax dollars for abortions this would actually save the taxpayers money because abortions cost less than births do.

Link: https://x.com/EndWokeness/status/1905054826465014086

Yes, that is true.

However, don't some issues go beyond mere dollars and cents?

After all, if we are just interested in saving money consider just look how much money could be saved by not having any children.

No food, clothing or health care costs for children.

There would be no need to build schools or pay for teachers.

We could save all sorts of money. 

How would that work out in the long run?

There are many countries in the world today that are on the verge of seeing what happens when births drop and you don't have many children.

A prime example is South Korea that has seen its birth rate falling for years.

Part of this is due to a number of Korean women who have taken a vow to remain single ("bihon" in Korean).

A subset of young South Korean women have taken it a step further and started a women's movement based on four NO's. (Hat tip to Alex Berenson for pointing me to this info).

NO to dating

NO to sex with men

NO to marriage

NO to childbirth

In a country in which cultural norms do not look kindly on out of wedlock births, the effect of what is going on in South Korea on that nation's birth rate is predictable.

Fewer marriages means there are a LOT fewer babies being born in South Korea.

South Korea now has the lowest birth rate in the world.

The total fertility rate (TFR) is .72 and is expected to go even lower. A 2.1 rate is considered necessary to maintain a stable population meaning each woman would, on average, give birth to 2.1 children during her lifetime. 

This is the current population pyramid in the Republic of Korea (South Korea) with a population of almost 52 million.

Source: https://www.populationpyramid.net/republic-of-korea/2024/

 

Looking at the graph you can see that there is already a huge imbalance between the young and old.

There are twice as many people age 70 and older in South Korea today than there are under age 10.

If current birth rate and death trends continue, South Korea's population will drop to 22 million in the year 2100.

Source: https://www.populationpyramid.net/republic-of-korea/2100/

This graph shows the rise and (potential) fall of South Korea's population.

Population of South Korea Projected to 2100
Source: https://www.populationpyramid.net/republic-of-korea/2024/

Italy is another country on the verge of population collapse due to declining births.

This is the population pyramid of Italy in 2024 with 60 million people.

Source: https://www.populationpyramid.net/italy/2024/

This is Italy in 2100 at current birth and death trends.

The population will almost be cut in half.

Source: https://www.populationpyramid.net/italy/2100/

Italy is looking at a potential population in 2100 that will be only 75% of what it was in 1950!

Population of Italy Projected to 2100
Source: https://www.populationpyramid.net/italy/2024/

China also faces significant challenges from population declines in the future.

China has found that once birth rates decline (China enforced a one-child policy from 1980-2015) it is hard to reverse the trend. Fertility rates are even lower today than during the one-child policy years.

Source: https://phys.org/news/2024-01-china-population-halve.html

At current levels, China's population in 2100 will be less than half of what it is today. (1.4 billion today vs. 633 million in 2100).

Population of China Projected to 2100
Source: https://www.populationpyramid.net/china/2024/

Population trends in the United States are better than almost everywhere else in the developed world but it still faces challenges in the coming years.

There are more people between 30 and 60 in the United States today than there are under age 30.

Source: https://www.populationpyramid.net/united-states-of-america/2024/

How is that aging population going to be supported by the younger generation?

Social Security and Medicare are going to face enormous challenges in the future.

There will be fewer workers, less productivity and, more importantly, fewer consumers to keep the economy going forward.  Consumer spending is generally the engine that drives the economy.

Automation and robots may help solve the labor and productivity problem.

However, robots do not consume. What will drive consumer spending in a future with fewer young people?

In addition, societies usually advance because of the energy and vibe of the young.

What happens when there is a lot less youthful energy and a lot more senile seniors?

These are questions that few societies in history have had to face.

Those that did usually were not able to survive.

In coming years I expect we will see more and more countries adopting policies to encourage the births of more children. 

For example, Hungary is now providing lifetime personal income tax exemptions for mothers with two or more children.

I recently saw an idea from someone in the United States that incomes from families should be divided between all family members pushing those with larger families into lower tax brackets.

Abortions might be less costly than births in the short run.

However, in the long run, low birth rates are very costly to society.

It might seem unthinkable right now but I do not think it is out of the question that we will see abortions totally banned in some countries in the future as a policy response to low birth rates.

The policy will be an economic imperative for the society to continue to thrive.

Morality does not always win. However, money almost always does.

Getting Them To Do What They Didn't Want To Do

President Trump has one quality that I believe is very much unrecognized and under appreciated.

I am referring to his ability to get people to do what they don't want to do.

We saw it in his first term when he successfully pressured the NATO alliance to substantially increase their defense spending in keeping with the 2% of GDP spending guideline.

Most NATO countries had for decades ignored spending on defense and spent increasing amounts on social spending.

As an example, look at Germany's history of allocating more and more money to social expenditures while ignoring defense spending even in the face of increasing geopolitical risks.

They knew they should be spending more on defense especially with the threat of a reinvigorated Russia under Putin

It was just much easier for many of these countries to just rely on the United States to defend them.

When Trump took office in his first term only three NATO countries were spending the targeted 2% of GDP on defense. One of those countries was the United States.

When Trump left office in 2021 the number of NATO countries spending at least 2% of GDP on defense had increased to 10.

The wisdom of Trump was fully revealed when Putin's Russia invaded Ukraine under Biden that made the potential Russian threat to Europe much more real.

Trump's genius was getting the NATO countries to do what they should have been doing anyway.

We are seeing Trump operate similarly in his second term.

For years, most of the rest of the world has taken advantage of the United States in trade.

Tariffs and trade barriers are erected against United States products while the U.S. market has largely been open to everyone.

Compare the tariffs and trade barriers that have been in place with our "trading partners" compared to what the United States has had in place in this chart from B of A Global Research

President Trump has called out this injustice and is arguing for trade reciprocity.

The end game here is geting our trading partners to do what they don't want to do.

Let's move toward trade that is both FREE and FAIR.

This is particularly true with regard to Canada.

When President Trump first met with Prime Minister Trudeau shortly before being sworn in as President he stated he needed Canada to tighten up its border and to also significantly crack down on drug trafficking.

If Canada was not willing to do that Trump threatened tariffs.

Trudeau told Trump that if the United States levied a large tariff on goods it exports to the United States that Canada would cease to exist as a country.

To this point, Trump had never given a thought to Canada becoming a state.

However, his response to Trudeau was very logical.

"If Canada cannot exist without being reliant on the United States market perhaps it would make sense for Canada to become a state. There would then be no tariffs going either way."

About 20% of Canada's GDP is tied to exports to the United States. 

On the other hand, U.S. exports to Canada represent less than 2% of the U.S. economy.

 

These exports also represent about three-fourths of all the exports shipped from Canada.

Source: https://x.com/Martyupnorth_2/status/1886060620203843608

In fact, more goods are exported from Canada to the United States each year than any goods that are transferred among the provinces of Canada.

It will be difficult for Canada to win any trade war with the United States considering those numbers.

Predictably, we have seen Canadians rally around their country. They are talking about being less reliant on the United States. Increasing defense spending and looking to expand exports to other countries. 

All of this is actually to Canada's benefit in the long term.

Why didn't they do it before?

It was too easy to just rely on the United States for its defense and as a market for its goods.

Trump is getting Canada to do what they didn't want to do.

The same is true with regard to Trump's statement that he wanted the United States to take over and rebuild Gaza after the Israel/Hamas war.

I doubt that Trump was really serious about this plan.

However, I think he understood that saying he wanted to do this would force the hand of other Middle Eastern countries to step up and take over.

It is another example of Trump getting them to do what they didn't want to do in the first place.

Finally, let's look at how Trump played the recent potential government shutdown that was threatened over the budget and debt situation

It has long been the Democrat strategy to not participate in any legislative effort to avoid a government shutdown while a Republican was President.

It was just too attractive an opportunity to blame the Republicans for the shutdown and rely on the mainstream media to amplify the message. Government shutdowns always seemed to benefit the Democrats as Republicans took the blame.

Many expected the same scenario this year.

However, Senate Minority Leader Chuck Schumer and a number of other Senate Democrats did not want to trust Trump with the power to dictate what the budget priorities would be this time.

When Democrats controlled the White House they were sure to only cut those things that inconvenienced the American people the most---access to national parks, longer TSA lines at the airport, etc. They also furloughed "non-essential" federal workers but always assured them full back pay. In effect, it became a free vacation for federal workers.

With Trump in power and a lot of information from the DOGE effort, there was no assurance that Democrat priorities would be protected this time.

Federal workers (most of which are Democrat voters) would likely have been laid off and would receive no back pay when (if) they returned to work.

Schumer blinked.

Trump got the Democrats to do what they did not want to do.

Getting people to do what they don't want to do is a unique talent of Donald J. Trump.

How does he do it?

He is not afraid to confront uncomfortable issues.

He is not afraid to make others uncomfortable with their positions on those issues.

He is comfortable in his own skin and confident in his own instincts.

As a result, he gets uncommon results that many think are impossible.

Red and Blue Names

I have written in these pages before about the interesting background on the names that parents give their children.

You can find earlier content on names here , here and here that I wrote about in BeeLine.

I became particularly interested in this subject when I read the book Freakanomics by Steven Levitt and Stephen Dubner about 20 years ago.

Freakanomics has an entire chapter on names.

One major conclusion of the authors is that a name by itself never reveals much about the person that holds it.

After all, they were not involved in the naming process.

However, it does reveal a lot about the parents, particularly the mother.

You often can discern a lot about the parents just by the name---their socioeconomic class, race, ethnicity, education level, etc.

Based on some recent data I have seen, you might also be able to discern their political affiliation.

For example, these are the ten baby boy names that have the highest prevalence of being found in Democrat leaning (Blue) states as compiled by the baby name website Nameberry.

Here is a list of the ten baby boy names that are more likely to be found in Republican leaning (Red) states.

Those names do seem to tell us a lot about the parents naming these boys.

Here are the "Blue" baby names for girls.

And the "Red"baby names for girls.

There is also recent data that shows the most prevalent names for registered Democrats and Republicans based on age groups.

These are the names in which you are most likely to find a Democrat voter based on voter registration rolls.

One big fact that the authors of Freakanomics found in their research was how little overlap there was between white and black names.

I would hazard a guess that it is unlikely that there are very many white voters in the list above.

Conversely, there was a great deal of overlap between white and Asian American names.

This is the list for Republican leaning names.

I would doubt that there are very many minorities in those names.

One thing I did learn in looking at the list above is that I seem to have been ahead of my time by about 20 years.

I also had no idea that the Jolene that Dolly Parton sang about, in addition to having beauty beyond compare with flaming lock of auburn hair, was most likely a Republican!

Here is an  AI generated images (by Grok) of what a young Jolene might look like in a MAGA hat.

Dolly, we better understand why you were imploring Jolene to not take your man!

Outside the Mainstream

In this blog over the last few years I have observed several times about the curious fact that there is such a heavy representation of young, single, college-educated white women in the Black Lives Matter, Antifa and other far left movements.

It defies logic.

How is defunding the police or emptying prisons going to make single women feel more secure?

How is allowing a biological male to use a women's restroom going to make her feel safer?

How does allowing biological males to compete with females in athletics advance the opportunities for women?

Is there any group today that feels more lonely, is more misunderstood and wants to belong than young, single, college-educated white women? 

Many have no man in their life. There are no children or likely prospects that marriage or children will occur soon due to the imbalance between male and female college graduates. They live in rental apartments in large cities leading hectic, anonymous lives with little sense of community and huge sums of student loan debt.

The picture below is one that I referenced in these pages in 2021 when I was discussing this issue.

How many young, white women do you see in this picture supporting BLM's calls to defund the police?

How many Blacks do you see in the picture?

How do you make sense of it?

You can't. It is not logical.

I thought of my earlier observations on this subject when I saw this recent poll on the opinions of white voters on Trump and other political figures and issues broken down by gender and education.

Source: NBC News Poll March 19, 2025

It used to be said that men are from Mars and women are from Venus.

This polling would indicate that college-educated white women are living in completely different universe than other white men and women in the United States.

What explains this?

It seems to be a combination of both education and gender.

On Trump's approval, there is a 52 point difference between women with no degree compared to those with a degree.

There is 37 point difference between women with a degree compared to men with a degree.

Those are astounding numbers.

I could not find cross tabs breaking down the women's numbers between those who are married and those who are not married,

However, the white college-educated numbers are undoubtedly driven by single females who largely live in urban areas.

For example, in the 2024 general election, married women supported Trump 52%-47%.

White women college graduate supported Harris 58%-41%.

Unmarried women voted for Harris 61%-38%.

In previous blog posts I hypothesized that young, single women in the United States have become more liberal politically than their male counterparts due to two factors.

1) an innate need for security that pushes them to support large government safety net programs.

2) a need to belong that is provided by the large number of "causes" that make up the progressive agenda.

It can be argued that both of these are the result of the fact that there are now more young, unmarried women than we have ever had in history.

In fact, the most recent Census Bureau data indicates that 29% of all mid-life adults today(age 30-49) have never been married.

That is almost twice what it was in the year 2000 and over four times what it was in 1970.

Source: https://www.bgsu.edu/ncfmr/resources/data/family-profiles/marino-geographic-variation-percentage-mid-life-never-marrried-adults-2021-fp-23-13.html

The numbers are even higher for those under age 35.

And higher still for college educated, young women who vastly outnumber college educated, young men making it even more challenging to find a marriage partner.

Look again at the net approval numbers among white college-educated women above.

Donald Trump           -38

J.D. Vance                 -38

Elon Musk                 -40

Volodmyr Zelensky   +53

DEI                            +30  

How does one explain this?

I recently saw this answer to that question that is more sophisticated than what I have proposed in the past.

His thesis suggest that gender-based biological traits that are immutable that are "hijacked" by the education system and turned into leftist political ideology in the absence of a husband, children and family.

It is an interesting explanation.

What should most concern the Democrat party is that despite the negative opinions these women have of Donald Trump and the Republican Party they also have a net overall negative opinion of the Democrats.

How bad have things become when Ukraine President Zelensky is viewed more favorably by white women at many times the level in which the Democrat Party is viewed?

They don't like Trump but they also apparently don't see the Democrat Party as it exists today as being an effective countervailing political force.

What is most interesting in all of this is we have been told for the last decade that Trump and his supporters do not represent the mainstream of American voters.

Look at the survey data again and tell me who is outside of the mainstream here?

It Starts At The Top

"It starts at the top". 

It does not matter whether it is business, education, sports, the military or government.

The leadership and actions of those who are in authority at the top of the chain of command, and are establishing the tone, tenor and priorities, have the greatest influence on the results and outcome of the group or organization.

There is not better example of this principle than what we have witnessed in Washington, D.C. over the last two months.

A recent NBC poll found that 44% of Americans believe the country is heading in the right direction now compared to just 27% in November, 2024.

The net score (right direction minus wrong direction) has improved from -39 to -10 within the space of several months.

More significantly, a higher percentage believe the country is heading in right direction than at any time in the last 21 years!

Link: https://x.com/ResisttheMS/status/1901284066495709317

This is solely due to a change in leadership at the top in the United States.

Specific actions we are seeing in Washington, D.C. since the Trump administration took over puts a finer point on all of this.

For example, consider the issue of encounters of illegal immigrants at the southwest border by U.S. Customs and Border Protection agents for February, 2025 compared to the previous three years .

Source: https://x.com/EricLDaugh/status/1896568489072349212

You may recall that Joe Biden and the Democrats stated that new laws were necessary to stop this illegal migration.

All it took was a change in leadership.

In fact, border apprehensions in February were the lowest in 25 years.

A year ago almost 80,000 illegals were released into the country after being apprehended at the border.

In February, 2025 that number was ONE!

Link: https://x.com/PURE_BL00D2/status/1902013754599969028

There is no difference in the CBP personnel on the ground.

It starts at the top.

Another example involves the number of apprehensions that the FBI has made off of its famous "10 Most Wanted List".

In 2024, the FBI did not apprehend one criminal fugitive from its Top 10 List.

In 2023 the FBI nabbed one.

However, since January 20 of this year, the FBI has caught three who were on the Top 10 Most Wanted List.

Could it be that when the FBI is tasked with using its resources to go after the worst of the worst instead of trying to track down grandmothers who walked through The Capitol on January 6 or parents who protested at school board meetings during Covid that you get a different result?

Yes, once again it starts at the top.

I was also interested in seeing exactly who made up the FBI Most Wanted List that President Trump and FBI Director Patel inherited from the Biden administration.

We seem to have come a long way since we saw names like Al Capone, John Dillinger and Baby Face Nelson on the list.

Don't you have to wonder if where these criminals came from was the reason that the Biden administration showed so little interest in apprehending them?

Credit: https://x.com/RealJarTaylor/status/1892283466101780713

Also consider the fact that the United States has attracted $1.7 trillion of new investments into the country since Trump took office. 

To put that in perspective, four years of the Biden administration saw only $1 trillion of business investment commitments.

A lot of this is due to Trump's "America First" agenda combined with his tariff threats designed to level the economic playing field with foreign competitors.

Link: https://x.com/amuse/status/1896820941382103130

 

Source: https://x.com/ExxAlerts/status/1896746972792627401

It starts at the top.

Finally, does anyone remember when President Barack Obama appointed Vice President Joe Biden to lead the "Campaign To Cut Waste" in 2011?

The mission of DOGE is almost exactly the same as a similar "Campaign To Cut Waste" that was established by President Barack Obama in 2011.

It was intended to "hunt down and and eliminate misspent tax dollars in every agency and department from across the federal government."

Joe Biden was named to lead the "New Board of Fraud and Waste Watchdogs".

Did that effort amount to anything?

Like most things in Washington, D.C. it was all theater.

Elon Musk and Donald Trump are not performing on a political stage.

They are intent on producing real results.There was no real intention to do anything.

President Trump is doing it to fulfill a campaign promise he made in the 2024 campaign. 

He is serious about getting real results for the American people.

It starts at the top.

That is also why Elon Musk is heading the effort rather than someone like Joe Biden.

Musk has a long track record of success and getting more from less.

PayPal. Tesla. SpaceX. Twitter. 

Musk did not become the world's richest man by not being on top of things.

Did Joe Biden produce even $1 in savings from cutting waste and making government more accountable?

Either as head of the "Campaign to Cut Waste" or in four years as President?

It really does start at the top, doesn't it?

Recession Ahead?

Are we heading into a recession in the United States?

There are many who are predicting a recession is on the horizon.

The Atlanta Fed's GDP Now forecast is estimating first quarter GDP at -2.1%.

Source: https://x.com/NorthmanTrader/status/1901673454497137109/photo/1

However, the New York Fed is projecting GDP at +2.7% for the same period.

 

Source: https://x.com/NorthmanTrader/status/1901673454497137109/photo/2

That is quite a divergence of opinion from economists who are paid to track economic activity very closely.

For context, it is important to take into account that the Federal Reserve employs over 500 economists with more than 400 holding PhD's.

Keep in mind that this is the same group who were telling us that inflation would be transitory a few years ago.

You can make your own determination about how much confidence you might want to place in a GDP forecast by any Federal Reserve economists.

A survey of consumers from the University of Michigan recently showed a consumer sentiment score of 57.9 which is down significantly from a year ago.

This is also the lowest consumer sentiment score in the survey since inflation was raging in the summer of 2022.

Source: http://www.sca.isr.umich.edu/

However, that consumer sentiment score seems to be heavily influenced by the political identification of the consumers surveyed.

The consumer sentiment score for Democrats was 41.4.  It was 83.9 for Republicans.

Below is a separate survey question on consumer expectations that shows the same political divide.

When consumer confidence wanes it usually follows that consumer spending trends down.

Consumer spending also accounts for about 70% of what comprises GDP.

If consumer spending drops it almost certainly will result in a recession.

The other factor in all of this is that 50% of all consumer spending today is the result of spending of those in the top 10% of income earners ($250,000+ of annual income).

We also cannot ignore the role that government spending has in all of this.

There is little question that the last four years would have seen much worse GDP numbers but for the significant amount of government spending and jobs. 

34% of U.S. GDP came from government spending in 2024. That is the highest it has ever been with the exception of times of war or crisis.

In addition, 2 million government jobs were added in the last four years.

There are a lot of factors at play here but my view is that President Trump and Treasury Secretary Bessent are not adverse to bringing the economy down a notch or two right now.

Link: https://x.com/unusual_whales/status/1901393286868472266

First, they understand that the concentration of wealth and income at the top in not a healthy situation for the United States long-term. Trump also understands that a good deal of his support did not come from Wall Street and that top 10%. 

Second, the large amount of government spending and money printing has fueled large increases in housing prices and stock prices in recent years that has disproportionately benefited the top 10% but has disadvantaged large groups of people (particularly the young).

Third, the federal government desperately needs interest rates to come down in order to finance the $36 trillion of federal debt. 

In 2020, the average interest rate on federal debt was 1.772%. It is now 3.282%.

At the same time, total federal debt outstanding has gone from $23 trillion in 2020 to over $36 trillion today.

Source: https://fred.stlouisfed.org/series/GFDEBTN/

As a result, the United States is now spending well over $1 trillion per year just on interest on the federal debt.

It was spending only $400 billion per year in 2020.

Source: https://fred.stlouisfed.org/series/A091RC1Q027SBEA

For context, personal income tax collections for the current year are projected to be $2.6 trillion meaning that it is taking almost half of our income taxes just to pay the interest on the federal debt.

The total Defense Department budget is only $850 billion.

It is simply unsustainable.

That is why the DOGE effort is so important.

The United States simply cannot afford to keep adding $2 trillion of debt every year from deficit spending.

It also cannot continue to pay interest at the rates in effect right now.

And it is going to take an economic slowdown and/or loss in asset values to bring interest rates down.

Trump and Bessent also know that it is preferable to take air out of the ballon in a controlled manner than to let it suddenly and dramatically burst which is inevitable if natural forces are left alone.

You simply cannot have the excesses we have seen in government spending, debt and money printing in recent years without a brutal correction at some point.

Fourth, there are only two ways out of the gigantic deficit and debt hole that Trump has inherited. The most obvious path is for government to inflate the debt away. The federal debt becomes manageable by destroying the currency. Of course, this also destroys the wealth of much of the population. The second option is to constrain spending going forward (DOGE), seek new revenue sources (tariffs) and grow the economy at a faster rate than government spending. Trump is totally focused on the second option.

Fifth, Trump and Bessent also understand if there has to be some pain it is far better from a political standpoint to take it early in this term. To fully implement the Trump agenda is going to require stronger Republican majorities in the 2026 mid-term elections. Better to clear the decks now so that any pain is in the real view mirror than front and center in 2026.

Is a recession ahead in 2025?

The excesses of the last four years make it hard to avoid in the best of circumstances.

If you add to this the fact that Trump and Bessent have clearly signaled that they are willing to take some pain now for longer term gains makes me believe that we will see a visible slow down before the end of the year.

Plan accordingly.