The Titanic was great and huge, but not immune to obvious huge hazards.

We’re in uncharted waters as a nation as of early 2025, and uncharted waters don’t care about human-made constructs, past or current. As the icebergs did not care about the Titanic’s greatness, we can indeed face disaster if we sail full steam ahead despite some very obvious massive objects in the waters before us.

I am not claiming to be Paul Krugman here, but I have had several college classes in economics and have followed practical-level economic conditions for decades in journalism and as a State of Colorado staffer. By writing, my main purpose is to call out some of the sizable economic hazards I see floating on our shiny new imaginary Gulf Of America, potentially not even that far in the distance.

Since to me we’re in uncharted waters, I won’t try to be horribly comprehensive about our broad macroeconomic future, but I do believe some of the icebergs out there are more historically familiar than some of us are caring to admit. Hit them directly, and there will be damage to the ship. Steering past one and assuming it’s clear sailing ahead forever is an equally dangerous course of action. I want to hope we’ve got enough lifeboats in case of serious impact, but that’s hope, not confidence.

The Titanic’s staff received at least six reports of hazardous ice before its sinking, so for what it’s worth, here are some of my warnings, viewed from my perch of experience.

Stagflation: Worse Than Mere Inflation

The price of eggs is through the roof in Feb. 2025. While that’s because of the bird flu emergency and not normal economics, general inflation rates aren’t going down yet either.

Much was made of “inflation,” simply defined as sustained increases in the price of goods and services, during the 2024 Presidential campaign. Many pundits say high rates of inflation during parts of former President Joe Biden’s administration gave President Donald Trump a powerful campaign weapon to use against former Vice President Kamala Harris, who served under Biden. Certainly, Americans of low or moderate incomes felt the impact of inflation very tangibly, as the new prices of certain common items ate up more and more of their paychecks or savings, and some of them may have voted Trump partially for that reason.

Unfortunately for the latest round of people who fell for the notion that Trump had actual ways of making things better, he said very shortly after the election that “It’s hard to bring things down once they’re up.”

There are a large number of potential factors that can lead to inflation, and it’s too soon to judge what Trump might be able to do about it, if anything. The national rate increased from 2.9% in Dec. 2024 to 3.0% in Jan. 2025, but Trump didn’t take office until Jan. 20. Who’s to say if this relatively small increase was due to Biden policies, or expectations of Trump actions, or any combination of factors?

More on inflation later, but the more I see about what’s happening in early 2025, the more I’m concerned about a visit from an old friend – stagflation. Here’s a simple definition – “an economy characterized by high inflation, low economic growth and high unemployment.”

I don’t want to get too hung up on whether our future will meet the technical definition of stagflation or not, but I think I see potential factors in the course we’re charting right now. And there is certainly historical precedent for stagflation or something like it in the U.S., as Investopedia plainly points out:

“In the past 50 years, every declared recession in the U.S. has seen a continuous, year-over-year rise in consumer price levels.”

For now, I’m just more than a bit concerned that stagflation is possible, although my paranoid side is trying to yell at me that there could easily be a worse condition waiting for us that we’ve never experienced as a nation. My next few sections will outline a few conditions that might contribute to a slowing of the national economy, or of smaller state or local economies. It doesn’t look likely right now that we’ll contain price inflation, so throw in a few of the conditions I’m about to mention and it would be at the bare minimum a bad double whammy.

Why Yes, Mass Layoffs Count For Unemployment

Layoffs at the NOAA/NIST federal labs in Boulder will probably hurt the local economy, and I for one want to keep its valuable researchers on topics like space weather in town.

Back to the “high unemployment” part of the simple stagflation definition – the so-called Department of Government Efficiency (DOGE) is working toward making extreme cuts in federal employment. Many people these days are joking about the role of President Elon Musk in all of this, but there’s no indication of any serious opposition to DOGE from Trump either.

I’m writing in mid-February, and of course the full impact of DOGE is yet to be fully realized. But the microeconomic impact of being laid off, for whatever reason, is quite easy to understand.

Of course, the newly unemployed workers at some point lose their paychecks and their benefits. Those who can’t yet retire have to seek new employment, and there is no guarantee of quick success. While some workers will be economically comfortable enough to weather short-term unemployment, others will have to adjust spending or take on debt or sell assets to make ends meet. Cutting personal or family spending could negatively impact business and tax revenues in local economies – for example, if folks stop going out for dinner or entertainment, or spend less on retail items. And the longer a person’s unemployment lasts, the more severe the economic adjustments will probably need to be.

Somewhere between micro and macro, large federal layoffs will impact certain regions. I’m from Boulder, and the federal labs at NOAA and NIST are significant parts of our local economy. According to the Congressional Research Service, Colorado’s 5th Congressional District is about 6% federal workers, with large concentrations of people involved in the military or defense living in or near Colorado Springs. The 3rd Congressional District has vast amounts of public lands, including national parks and monuments that feed the Western Slope economies, and it’s nearly 3% federal employees. Boulder’s 2nd Congressional District is nearly 2% federal employees.

And not surprisingly, Washington DC weighs in at about 18.5% federal employees. If the late Chris Farley could still comment on what massive cuts would mean for DC’s local economy, he might say, “That’s gonna leave a mark.”

Again, there’s no telling yet how big the layoffs will be or where they will happen, but it’s not hard to see the potential for tangible local or regional loss of economic activity, which will impact real people to some extent.

Like In Love, Nobody Wants An Abusive Trade Partner

America’s top four trading partners buy our goods and sell us things that normally benefit our economy.

The U.S. has long had a mighty economy, of course fluctuating though normally bouncing back, but we need international trade for a few basic significant reasons. One, American businesses can sell goods directly to customers in other nations, and two, other nations sell goods to us that contribute to our economic well-being. Like it or not, we get certain finished products more cheaply from other nations than we can make them ourselves, and we don’t always have the raw materials to make what we need in the U.S., so we import.

So why on God’s green Earth is the Trump administration trying to mess with some of our biggest trade partners, like those featured in this chart from Wikipedia at upper right? I have lived not far from the Canadian border plus I love maple syrup, so I was knocked for a loop like getting body-checked into the boards by a goon hockey defenseman when I heard about Trump’s proposal to cross-check certain Canadian products with 25% tariffs. And for the inflation voters, those who follow the news could have easily found warnings during the 2024 election cycle that tariffs like this tend to be inflationary because they – increase prices.

Like any hockey player worth their salt, Canada hit back, issuing tariff threats of its own. As I’m writing, both of our neighbors Canada and Mexico had been threatened with punitive tariffs, though after talks both proposals were at least postponed for 30 days.

There are whiskey snobs, but most drinkers will make do with most types of whiskey. Many Canadians seem willing to drink their own products and stop buying American right now.

But I’d argue some serious psychological damage has been done, and it’s already contributed to economic actions against U.S. businesses. Canadians have reportedly cancelled trips to the U.S. and boycotted American products.

Meanwhile, a Latino group called for boycotts of a fairly wide range of American products in favor of those made in Mexico or Latin America. And let’s face it – even though I like Kentucky Fried Chicken, anyone with chickens and breading and spices and hot frying oil can fry chicken, and it will almost certainly taste just fine. Anyone can find a decent list of KFC’s “secret” herbs and spices online. American soft drinks are simply flavored carbonated sugar water, for the most part completely possible to replicate in nearly any other developed nation on the planet. We can arrogantly proclaim America as the greatest country ever and believe it amongst ourselves, but when it comes to simple economic decisions, international consumers will investigate options if there are options.

And with lessons from WWI and WWII apparently forgotten, the new administration is screwing up relations with the European Union. Like them or not, the EU is a gigantic trading partner, plus most Euro nations have been our allies on the global stage for decades or even centuries. They generally want to trade with us, but again on the sort-of-micro level – if they want to buy electric vehicles, they don’t have to be Teslas. In fact, Tesla sales were down about 60 percent in both France and Germany for January 2025, compared to January 2024.

If the new administration’s belligerence to non-right-wingers in the EU and its looming abandonment of Ukraine are intended in order to have better economic relations with Russia, let’s be clear. Russia ranked 23rd on the Wikipedia U.S. trading partner list, while I’ve shown the top four in the graphic above. Do most American consumers suddenly want to do less business with Canada or the EU, and more with Russia? I for one don’t, and it’s pretty easy for me to assume most of us would rather have good economic relationships with our closest neighbors and allies than a long-time adversary.

Health and Safety Influences Economic Decisions

There are measles outbreaks in the U.S. right now, not to mention tuberculosis and concerns over bird flu. Do we want a national reputation for being anti-vaccine right now?

Try to sell me a bottle of raw milk that came from an area where dairy cows are contracting bird flu, and I will not-necessarily-politely decline. The last sentence was simply an example of how I might make a business decision, and I’ve got to believe a lot of people would operate the same way, given the proper information about purchases that might be really dangerous.

So, what is going to happen to the American airline industry as consumers ponder recent reports of plane crashes or collisions, shortages of air traffic controllers, mass layoffs at the Federal Aviation Administration (FAA), or Musk’s pressuring leading to the resignation of our last FAA administrator? Which potential foreign tourists are going to want to visit the U.S. if we have another pandemic or epidemic, and you can’t get reliable information about it from an official government website, or if we’ve developed a reputation for de-emphasizing vaccinations? With a horrible pandemic fresh in memory, which potential economic partners won’t be at least a little apprehensive that the administration has engaged in mass firings at National Institutes of Health, Food and Drug Administration, or Centers for Disease Control?

I’m not completely risk-averse, but I’m glad I’ve lived through decades in a nation with pretty good health and safety protections. It’s allowed me and hopefully most of us to have decent confidence in American products and services, and even if there are occasional problems, good oversight has kept them rarer. I read Upton Sinclair’s “The Jungle” about hazards in the meatpacking industry, and though shocking and distasteful it helped foster legislation and practices that led to better health and safety conditions, which benefited workers and consumers alike. Even if some of us don’t like regulations, they very frequently come about after someone notices a real problem that is possibly avoidable if we just alter practices.

But I’m trying to mostly stick to economics here. It just looks to me like we’re risking some giant steps backward when it comes to oversight and regulation right now, and I can’t imagine this will go unnoticed by consumers, foreign and domestic.

Yes Indeed, You’ve Got To Serve Somebody

Unemployment is not just a statistic – it’s got real human and economic consequences. This includes probable overwork and burnout for the employees left to do the work.

A long time ago, I watched an episode of “The Apprentice,” in which Trump berated a contestant for not having sufficient staff to run the front counter at a TV show sandwich shop. And you know what? Trump, or whoever wrote the script, was right. Any business or organization needs enough people and/or machinery in the right places if they want to handle high volumes of demand, whether it’s for hard goods or services or research or administration.

So what the heck are Musk and Trump trying to accomplish now with mass federal firings and layoffs? I have worked in little old Colorado’s state government, and cannot begin to describe what it’s like just dealing with a Senate district of 140,000 people, and to a lesser extent a state that’s approaching 6 million. When I started back in 2009, we were still reeling from the so-called Great Recession, and I spent many hours at work trying to help people get through to the Division of Unemployment or otherwise access various types of assistance. I was personally way too busy, but I helped people, and meanwhile Unemployment had to deal with about a doubling in caseloads.

In this way, I got a hands-on lesson about the government’s role in countercyclical economics. In down economic cycles, private sector layoffs are normally quite common, and the government might be called upon to make sure its residents don’t face serious problems like homelessness or hunger or no access to health care. To make a difference, the governments should have adequate staffing and financial reserves, which will cost taxpayers during strong economic cycles but can also protect against deeper economic collapse and societal problems when conditions turn sour. Even Republicans have supported countercyclical measures like stimulus checks to get money flowing during recessions, although these one-time checks don’t replace a lost job or services like unemployment benefits or regular food assistance.

Now, imagine a federal government serving about 340-350 million people. The needs of Americans are just not going to disappear because Musk had a whim to slash employment first, and maybe ask questions later. If the federal employees who are left after the mass layoffs care about what they’re doing, they’re going to be overworked, stressed out, and potentially ineffective because of overload. And this might be by design, but American taxpayers who really need help from their government won’t be as likely to get it in a timely manner if at all, in some cases impacting their economic conditions and their ability to spend money in local economies.

Adequate staffing for functional public service is really no more complex than making sure there are a couple extra people working the front counter at The Apprentice’s sandwich shop, just on a larger scale. And lousy service inevitably leads to dissatisfaction.

Groundhog Day: The Con Job of Supply-Side vs. Debt Resurfaces

Former President Ronald Reagan sold voters on the magic of tax cuts and cutting federal spending. Reality forced him to change course and our national debt still tripled.

When it comes to political messaging, good spokespeople might make it sound like the DOGE approach is largely about attacking federal debts and deficits that are spiraling out of control. But I’ve seen this movie before, and its plot has never reduced debts or deficits in recent history.

Ronald Reagan took office in 1981, and my grandfather warned me that Reaganomics were going to explode the federal debt. He was right, and it wasn’t tough to predict. Reagan initially cut taxes with the expectations that cutting federal employment and the “magic” of free market stimulation would make up for the loss of federal tax revenue. He was wrong, and it wasn’t tough to predict. The federal debt basically tripled under Reagan, and he had to increase taxes 11 times to make up for the loss of revenue.

Near the beginning of Trump’s first term, he and Congress passed the “Tax Cuts and Jobs Act” of 2017, probably better known as the Trump tax cuts. Leftie pundits at the time criticized it for the likelihoods that the tax cuts would mostly benefit the already-wealthy, while national debts and deficits would probably explode. They were right, and it wasn’t tough to predict. The 2017 bill itself added about $2 trillion to the debt, and the first Trump term as a whole added about $8 trillion. In fairness, a large chunk of the final number was due to COVID.

I do not want to deny the role of Democratic administrations in the national debt, but I’m writing here about the familiar fiscal approach the Trump administration seems to be taking in 2025. For two other quick examples from supply-side history, former President George W. Bush oversaw about a $5 trillion increase to the federal debt (sure, with 9/11 and the War on Terror and the financial system emergency), while the State of Kansas ran a short-lived supply-side experiment starting in 2012 that was abandoned after revenues plunged, services including education were slashed, and economic performance did not improve as initially advertised.

So, of course, the Trump administration is trying it again today, although maybe with a couple differences. A pre-election analysis from the nonpartisan Committee for a Responsible Federal Budget said “former President Trump’s ideas could heap another $7.5 trillion onto the debt and possibly as much as $15.2 trillion. That’s even though he suggests growth would be so strong under his watch that no one would need to worry about deficits.”

Again, I’ve seen this movie before, and it’s not hard to guess the basic ending.

There are a couple twists to today’s plot that might matter over the next few years. First, DOGE seems to me far more aggressive in cutting public employment up front than past supply-side attempts, which should have some effect on debts or deficits, even if it’s just to keep them smaller than if the government’s at full employment. But second, as I’ve already written, these layoffs and firings are likely to cause negative family or local or regional economic disruptions. It’s hard for me to imagine that increased unemployment at the type of scale they seem to be pointing toward won’t be economically contractionary.

Conclusion: Caution, Captains and Citizens

Obviously, I see problems ahead. This administration’s actions have already included consequences, like pissing off our greatest partners, accidentally laying off nuclear safety and bird flu workers, brain-draining away brilliant scientists and researchers, destroying our reputation on parts of the international stage, risking economic harm to families and local economies – and on top of it all, they’re still likely to expand the federal debt.

Boulder folks have already seen some of the consequences of the Musk approach. After he took over Twitter, there still was a Twitter office in Boulder. Like with what he did after starting DOGE, he intended to drastically slash employment, and sent buyout notices out to Twitter employees. By 2023, more than 100 Boulder employees either quit or were laid off, plus Twitter stopped paying rent and was evicted from the property. And here’s how the Denver Post ended its story on the eviction:

“Twitter’s press email auto-replied to a request for comment with a poop emoji.”

Whether Musk is figuratively sending a poop emoji to half of America right now perhaps remains to be seen. Maybe I shouldn’t be looking at our situation right now through a lens of normalcy anyway, but I can’t help seeing some really basic and large economic icebergs we seem to be sailing straight toward, despite zero shortage of historical warnings we could choose to heed. And we’re sailing fast, way too fast, even though we know what happened to the Titanic.