Tag: midterm-elections

The content of this blog is a compendium of multiple media reports supplemented by my personal opinion where noted.

In his first year in office President Trump has accomplished a great deal, arguably as much as any president ever. I have described these accomplishments in previous blogs, and in the interest of brevity I see no need to repeat them now. However, various economic issues still need to be addressed. I believe the ramifications of Trump’s economic policies will be extremely positive They are just starting to kick in, but their major impact will not be felt until 2026. More on this below.

A variety of recent polls has disclosed that economic concerns have permeated the public’s opinion of Trump’s presidency and the public’ view of politicians general. According to a survey by Decision Desk HQ (DDHQ) reported by The Hill Trump’s approval rating, which had declined to a second-term low of 41% last month in the midst of the record-breaking government shutdown, has since returned to his second term average of approximately 45%. This not great, but it far exceeds the 24% approval rating for congressional Democrats and the 29% for congressional Republicans.

According to these polls the president’s economic approval ratings are low primarily due to his tariff policy, continued inflation, and the cost of healthcare.  47% of respondents opined that current economic conditions are “poor;” only 31% characterized them as “fair.” Moreover, overall, only 24% of Americans are satisfied with the current state of affairs in the country, whereas 74% are dissatisfied. This suggests that the president has his work cut out for him if he wants to buck the historical trend of the party in power losing congressional seats in the off-year elections. It is critical for Trump to maintain control of both Houses in order to continue with his agenda.

As we know, historically, regardless of any critical foreign issues such as a war when it comes to elections it’s always about the economy. Generally, voters follow what is happening overseas, and some may have some concern, however, everyone’s primary concern is providing for their family. Overseas issues tend to fade into the background, however, the prices of things such as food, rent, gas at the pump, affording a home, and medical insurance are omnipresent.

In my view the principal measurements of economic health are inflation, food prices, energy costs, unemployment and healthcare costs. Let’s review the current status of each.

Inflation – In my opinion it is unfair for the electorate to blame Trump for inflation and high costs of fuel and healthcare since he inherited those conditions from the Biden Administration. Nevertheless, voters are focused on the present, not the recent past. (Many of them have forgotten how bad it really was.) As always, the Dems and the mainstream media are piling on with lies and exaggerations.

Due to the Biden Administration’s excessive spending the rate of Inflation has been very damaging. It peaked at around 8% in 2022. When Trump was sworn in it was around 3%. At the time, many economists were forecasting that we could be headed for a recession and/or that the Trump administration’s high tariffs could reignite runaway inflation. They were wrong. Neither has occurred nor is likely to occur in the near future. Furthermore, under Trump’s watch the financial markets have surged to new highs. I’m sure that the 60% of Americans that own 401ks or IRAs are very happy. As Oxford Economics Chief U.S. economist Michael Pearce told CBS News “this has been another year of resilience for the economy. [It] has grown at a pretty steady pace.”

Trump’s tariff policy has been very controversial. I discussed this in a previous blog. The negative is that in the short term, it has resulted in price increases in some areas. On the plus side it has generated some $17 trillion in promised foreign investments, which will yield substantial benefits to our economy over the long haul, and rectified some huge trade imbalances.

Food prices – Food prices in 2025 can be interpreted two ways. Dems and their allies in the media have been fond of denoting that prices have continued to increase. They cite as examples Trump’s tariff policy and the prices of products like eggs and meat. That may be true, but this is one area in which Trump inherited a real mess. The rate of price increases is now in line with historical averages. Incidentally, do you remember the various supply chain interruptions when consumers could not find certain essentials? Furthermore, if you have been to a grocery store recently you would notice that a myriad of goods is on sale.

Housing – All indications are that the housing market is in dire straits. According to the National Association of Realtors home prices, in general, are at or near all-time highs and mortgage rates are around 6.3%. Erego, many younger Americans and first-time buyers are unable to afford a house. Indeed, in 2025 the median age of first-homebuyers hit a record high of 40. Buying a first home is still an important symbolic achievement for most people, a fulfillment of the “American Dream.”  According to Na Zhao, a principal economist at the National Association of Homebuyers where she is responsible for analyzing the local economic impact of home building and housing and industry data, “this situation that we’re in right now, where [housing] affordability has gotten to be the worst it’s really ever been in recent memory and significantly worse than before the pandemic is really unfortunate for the younger generation.” In addition, according to Brookings, a prominent, nonpartisan think tank, in 160 U.S. cities surveyed at least one-fifth of middle-class residents can’t afford to live in that area, after factoring in local income levels and price differences. Finally, indications are that the Fed will cut interest rates shortly, perhaps more than once. This would make it easier for homebuyers to obtain a mortgage and thus loosen up the housing market.

Energy – Energy prices, particularly for electricity, have continued to rise in 2025 compared to 2024 due to increased demand (especially from data centers), grid upgrades, and natural gas costs. Average rates for residences have increased around 6-7% nationally. Conversely, the national average price of gas at the pump was lower in 2025 than 2024 and trending downward, with prices in several locales currently at less than $3.00 per gallon.

Unemployment – Unemployment remains unacceptably high. According to the Bureau of Labor Statistics in 2025 due to a reduction in hiring the unemployment rate has increased from 4.1% to 4.6%, which is the highest level in four years.

Healthcare – The final and most problematic piece is healthcare. We can all agree that costs for insurance and prescription medicines are out of control. The question is what do we do about it? Trump has been working with the major pharmaceutical companies to reduce the cost of prescription medicines. Regarding health insurance the Dems’ solution is to extend the Obamacare subsidies indefinitely. The GOP is opposed to this because to do so would provide illegal aliens access to free healthcare at the taxpayers’ expense. This thorny issue was the primary cause of the last government shutdown, and it may cause another one in a couple of months. Each side is hurling accusations at the other. Congress will have to resolve this issue, which does not augur well.

The Good News

1. GDP grew at a robust 4.3% annualized rate in the third quarter of 2025 compared to 3.8% in the previous quarter. The increase was fueled by consumer spending (which contradicted concerns regarding “affordability” that have been promoted by Dems and the media), exports, and government spending. This growth rate surprised many economists who had forecast a slower growth rate and a higher rate of inflation.
2. Business investment grew 5.4% primarily due to investments in equipment and AI.
3. Average wages grew 3.5% in the third quarter exceeding the 2.7% increase in inflation.
4. The trade deficitis at a five-year low.
5. Despite the relatively high unemployment rate of 4.6%, which was primarily attributable to DOGE reductions in the public sector, employment in the private sector has risen. In fact, for the quarter the private sector economy grew five times faster than the public sector.
6. Trump’s tariff policy has not resulted in the widespread increase in inflation that many had predicted. In the short term some products such as coffee and meat have risen, but others such as airline tickets, eggs and cell phones have actually declined. In addition, there will be long-term benefits as I explain below.
7. As I mentioned above, Trump’s “drill, baby, drill” policy has driven down the price of gas at the pump substantially, and signs are that those decreases will continue. Our fossil fuels output is at an all-time high.
8. The financial markets have continued to soar. As I write this, the Dow is at 48,406, and the S&P is at 6,891. This is a positive portent for 2026, as the financial markets have always been “leading indicators.”
9. As I mentioned above, as a direct result of Trump’s tariff policy it is predicted that trillions of dollars will be pouring in from foreign sources. That will translate into more high-paying jobs for Americans.
10. All of the foregoing does not take into account the positive effect of the so-called “Big Beautiful Bill,” which was passed last July 4th. Although many of the key provisions became effective on January 1, 2025 their impact will not be felt until 2026, hopefully prior to election day. The BBB will benefit virtually all taxpayers to varying extents. Below please find a brief summary of its main features:

a. Permanently increase the standard deduction for seniors, commencing with the 2025 tax year, to $6,000 for single filers and $12,000 for married couples.

b. Increase the SALT deduction from $10,000 to $40,000 (with a phase-out for taxpayers whose income exceeds $500,000.

c. Eliminate taxes on tips up to $25,000 for individuals in traditionally and customarily tipped industries, with an income limit. Expires December 31, 2028.

d. Eliminate taxes on overtime up to a $12,500 deduction for individuals with an income limit. Expires December 31, 2028.

e. Up to a $10,000 deduction for auto loan interest for vehicles with final assembly in the United States, with an income limit. Expires December 31, 2028.

f. Increases the additional senior standard deduction from $2,000 to $6,000 for seniors whose gross income does not exceed $75,000, or $150,000 in the case of a joint return. Expires December 31, 2028.

g. A one-time $1,000 contribution from the federal government to fund a so-called “Trump account” for children born from January 1, 2025, to December 31, 2028 whose parents are citizens.

h. A new Social Security tax deduction for seniors of up to $6,000 for single filers and $12,000 for married couples with a phase-out.

i. An Increase of the child tax credit to from $2,000 to $2,200.

Conclusion

The Dems and their allies in the mainstream media claim that Trump’s policies have not improved the economy. Rather, they claim he has exacerbated the situation, particularly the rate of inflation. Yet they do not offer any specific remedies, just wandering, meaningless generalities. Let us not forget that the far-left Biden Administration was the one which created the current mess in the first place with their wild, inflationary spending. Why would we trust them to fix the problem that they created?

It is not reasonable to expect Trump to fix in one year what it took the Dems four years to create. I maintain that the changes offered in the BBB will kick in throughout 2026 and give a substantial boost to the economy (hopefully, before the midterm elections). Every tax cut implemented in my lifetime has done just that. In my opinion, voters should give Trump’s policies time to work before passing judgment.