Prepare for the Looming Recession

“Will we have a recession?” was the question.

My answer was… Yes, count on it.

And to give away the punchline, prepare now for rough seas ahead, so to speak. Take some money off the stock market table, stash cash, lighten up expenses, throttle back generally, and own gold and silver for the long-term.

Here’s the background…

There Are Recessions, and “Recessions”

During the 1980 presidential campaign, Ronald Reagan offered a memorable quip: “A recession is when your neighbor loses his job. A depression is when you lose yours.” Then Reagan added, “A recovery is when Jimmy Carter loses his.”

The delivery and timing were perfect, befitting Reagan’s years on the stage, both in Hollywood and California politics. His line resonated with voters. In 1980 Reagan hit an exposed political nerve during a tough spell for the U.S. economy, at a time of roaring inflation and general industrial decline. If you were around, you may recall the rising prices for everything, plus widespread factory closures and layoffs.

The Gipper’s pithy summation was great political drama. His point remains valid. Voters appreciate politicians who deliver a strong economy with good jobs, economic growth, and prices under control. And voters punish politicians who fail, hence Carter’s one term in office.

Over and above Reagan’s use of the term recession, the word has a more formal definition in the field of economics. Namely, a recession is a period of economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP over two successive quarters.

In this sense, the definition of recession makes it more difficult properly to use the term. That is, a recession isn’t a real “recession” except in retrospect, looking back after long delay.

Sure, times can be tough out there for you or me, or the guy down the street. But more broadly, the economy – comprised of people everywhere – must go through a tough period for six months or more, then await PhD-level economic statisticians to reveal that their data compilations show measurable economic decline.

Which brings us back to that question at the beginning, “Will we have a recession?”

Biden’s Recessionary Bequest to Trump

In mid-December 2024, Paradigm Press held an editorial meeting at the mothership, our home office in Baltimore. At the time, we were six weeks out from the second inauguration of Donald Trump. Biden’s people were still running things; well, his handlers ran things and not Joe himself, of course, for obvious reasons.

At any rate, the Biden regime was still in office and that was key to my point. Trump was inbound and Democrats were about to lose vast political power, namely control over the Executive branch as well as the Senate. This was on top of the already-Republican House, so the political winds were definitely shifting.

Indeed, Democrats were in panic mode towards the end of 2024. Many spoke openly about how to “Trump-proof” the government, meaning to secure the hard-left, uber-woke political and even cultural milieu of the past four years and more.

At our editorial meeting, I noted that massive federal spending under Biden was much of what kept an otherwise played-out U.S. economy looking even slightly good. Think of all the so-called “Green New Deal” scams, and wide-open government hiring across innumerable agencies; those 80,000 or so IRS employees come to mind, and many more.

Biden’s big spending, plus significant number-massaging of official statistics created facile, fake talking points about lowball inflation and rosy job numbers. Except that since 2021-22, inflation has been much higher than reported, while private sector job growth has been generally awful unless you count all the part-time food-delivery gigs and hotel maids being added to payrolls.

My point in December was that if (or when) Trump makes even slight changes to the federal funding firehose, we’ll see dislocations across the economy. It would be no surprise if the economy shifts into recession mode.

And here we are… The slowdown is out there, occurring right now. It will play out until the future statistics roll in. Prepare accordingly.

It’s Worse Than We Suspected…

Obviously, Trump showed up at noon on January 20, 2025. He took office and it’s been quite the news-cycle ride ever since. Or perhaps I should say, “quite the reveal,” because over the past two months we’ve seen just how out of control the federal spendathon was.

With DOGE alone (Department of Government Efficiency), mere citizens out in voter-land have begun to see the broad waste and abuse in all manner of programs. Our worst suspicions are confirmed. I won’t even begin to list the myriad of grift, graft, and outright bizarre things for which U.S. funds have been poured down the rathole.

Then again, and no matter the cosmic merits (or not) of any particular program, every federal dollar goes into someone’s pocket. Thus, cutting out grift, graft and bizarre spending will break many rice bowls.

Along these lines, this is why so much of the Trump/DOGE agenda is currently in litigation. Trump is gutting massive spending programs, and the impact is immediate and severe to those affected.

Speaking of touching exposed political nerves, we even see things that truly are uncommon across U.S. history, namely, federal judges blocking layoffs, ordering rehiring, and even commanding the government to continue certain kinds of spending.

We’ll see how it resolves in court. We’re in a historic time in terms of clarifying powers under the U.S. Constitution. But while the lawyers litigate, there’s one aspect of Trump 2.0 and his spending cuts that has worked very well.

That is, Trump has nailed one key issue, and the effects now ripple through the economy with upsides and also downsides, perhaps even contributing to that above-mentioned looming recession. That is, Trump has all but closed off illegal migration into the U.S.

The Migration-Industrial Complex

Just during Biden’s time in office, per numbers from the Department of Homeland Security, something like 10 to 12 million people entered the U.S. in some form of edgy immigration status: outright illegal, asylum-seeker, other legal categories.

Now, let’s do some basic math. Biden’s term lasted 1,461 days. Take just that low number of ten million and divide. That means 6,844 people per day entered the country on average; some days more, some days less to be sure. And only a very small number of them paid their own way.

Keep it basic and logical. Nobody from Africa, or Central/South/East Asia just swims across the ocean to the U.S. southern border. And nobody just walks from South or Latin America, several thousand miles north. Even Mexican migrants don’t walk to the border, they take a bus or train.

Here’s the point: migration is all about logistics, meaning organization, transportation, food, housing, paperwork and related things involved in the movement of large numbers of people. So, again, how did 10 or 12 million people arrive in the U.S. over the past four years? Most of it was enabled by third parties and serious levels of funding.

That is, a global network of so-called “non-government organizations” (NGOs) facilitated mass movement of humanity to the U.S. border, enabled crossing, and helped move these arrivals around the country. Often as not, it was funded by U.S. government cash.

Under Biden policies, numerous federal agencies managed large pots of funds intended for these NGOs. Once funds were allocated, the NGOs had runners to sign up people to migrate. Then they arranged air transport and follow-on itinerary to the U.S. border. At the border, Biden’s doctrine was to facilitate crossings, then transport millions of people into the interior of the country for settlement.

When you add up the costs, it’s not out of bounds to say that U.S. funding amounted to $20,000 and more for each migrant. Let’s multiply that figure times, say, a mere five million people, and the cost to the U.S. government for Biden and his handlers to import people was about a hundred billion dollars over the past four years. (Probably more; I’m lowballing it to be conservative.)

To be sure, these are rough numbers because no one has exact statistics. Open borders will do that, and it’s not hard to suspect that many financial records have by now been burned in NGO incinerators across the world.

Which brings me back to one element of why there’s a looming recession, aside from Biden’s bequest of fake government numbers for inflation and jobs. Namely, over the past two months Trump has financially strangled those NGOs.

The federal spigot is closed, and it’ll be a big hit over time. Right now, migration-focused NGOs have no further funding and can’t pay their employees, either U.S. or overseas. At the border, migrant crossings are down by 96%, per authorities. In fact, many migrant processing centers in the U.S. are idle and have laid off staff. Food and housing purveyors have far less government business. Even bus companies and airlines report that they are hauling fewer passengers.

This is a solid example of how a significant success by the Trump administration will at the same time alter the economy. Hundreds of billions of dollars are not going out the door into other people’s pockets.

Preparing for the Recession Ahead

Will Trump’s border control trigger a recession? Probably not just that alone. Still, the immediate effects are measurable and currently show up in statistics across the nation and economy. Meanwhile, other Trump initiatives such as tariffs will also alter the economy in unpredictable ways. Again, wait and see.

Meanwhile, prudence dictates to plan for a rough patch, if not tough times ahead. In 1980-81, President Carter bequeathed the incoming Reagan with a recession, and I suspect history will show that Biden has left a 2025 recession for Trump.

Again, the best prep is to take some money out of the stock market, stash cash, lighten up expenses, throttle back generally, and own gold and silver for the long-term. Down the road, new opportunities will appear.

That’s all for now. Thank you for subscribing and reading.