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Trump and His GOP Risk Making Depressions Great Again
Today, every one of the fuse lines that set off past explosions is once again being laid by a Republican president and party that have abandoned any pretense of economic stewardship or patriotism.
Aug 01, 2025
Republicans may be fixing to crash the economy again—Republican presidents oversaw 10 of the last 11 recessions and the Republican Great Depression—and they’re doing it to satisfy the greed of the billionaires they serve.
Today, for example, is the day that some of U.S. President Donald Trump‘s worst tariffs are supposed to go into effect, and many folks on Wall Street are deciding where they want to hide when the ceiling starts falling in. The horrible jobs report just released hours ago highlights not only how bad things were in July, but they had to “revise downward by 285,000 jobs” previous reports; it looks like Trump’s people have been cooking the books.
The Financial Times is on it; they published an article this week titled, “The US Economy Is More Fragile Than It Appears.” It’s author, Tej Parikh, points out that our housing market is in trouble and starting to look like it did around the time of the Bush Housing Crash in 2008, that spending patterns are changing in alarming ways (my phrase, not his), and that both the labor and stock markets are vulnerable. The article is frankly alarming.
And former labor secretary Robert Reich titled his brilliant newsletter yesterday: “Be Warned: The Financial Bubble Will Soon Burst.” The former Clinton cabinet member writes:
The financial economy—stocks, bonds, and their derivatives—is in for a big reality check, and I think it will happen soon.
America has stared into this abyss before; three times, in fact. In the 1770s, a brutal financial crisis driven by colonial overextension, monopolistic control by the British East India Company, and political corruption helped spark the American Revolution. In the 1850s, it was wildcat banking, land speculation, and a collapse in trust that helped produce the Panic of 1857 and push the nation toward civil war. And in 1929, Republican deregulation, tax cuts for the rich, financial speculation, and an all-out assault on labor exploded into the Republican Great Depression.
Today, every one of the fuse lines that set off those explosions is once again being laid by a Republican president and party that have abandoned any pretense of economic stewardship or patriotism.
They are actively destabilizing the pillars of our economy, undermining our democracy, and gutting the social contract that held us together for nearly a century. And unless we act—forcefully, quickly, and collectively—we may soon experience a collapse that makes 2008 look like a speed bump.
The risk of a modern economic depression is not academic or merely theoretical. It’s also not fearmongering. It is real, it is avoidable, and it is being amplified by a political movement that openly disdains regulation, despises democracy, and seeks to roll back every gain the American middle class has made since FDR dragged this country out of the last Republican-created catastrophe.
We are now living under a Republican president whose party has:
- Repeatedly held the full faith and credit of the United States hostage in debt ceiling standoffs designed to force cruel cuts to programs that serve ordinary people;
- Demanded the Fed lower interest rates in a way that could push the nation into an inflationary spiral even as wages stagnate and housing becomes unaffordable for the bottom 90%;
- Pushed for the end of regulations on banks, fossil fuel companies, tech monopolies, and Wall Street speculators, even as their recklessness increases systemic risk;
- Championed massive tax cuts for billionaires and multinational corporations, ballooning the deficit while cutting benefits and raising taxes on working people;
- Enabled trade wars and supply chain disruptions while cutting support for green manufacturing and public investment;
- Promoted and made billions from crypto; and
- Perhaps most grotesquely, embraced open authoritarianism and white nationalism, eroding the rule of law and the very stability on which economic confidence depends.
Every one of these moves destabilizes the foundation of modern prosperity. And every one of them echoes the warning signs of past collapses. The mechanisms of economic catastrophe are not mysterious. We’ve seen them before.
Start with sovereign debt and fiscal dysfunction.
In 2023 and 2024, House Republicans repeatedly brought us to the brink of default just to slash food aid, gut Medicaid, and kill green jobs. Now, in 2025, they’re salivating over a new “Balanced Budget Amendment” that would make countercyclical investment during recessions illegal. That’s economic suicide.
When demand collapses, the government must spend to stabilize the system. That’s Econ 101. But the GOP wants a permanent austerity straitjacket. Why? Because billionaires don’t suffer in recessions: They buy everything at a discount and radically increase their own wealth when things rebound. For the morbidly rich, Republican recessions and depressions are “buying opportunities”: It’s class war, plain and simple.
Then there’s financial speculation and asset bubbles.
We’re once again living in an era of rampant unregulated financial engineering:- Crypto Ponzi schemes.
- AI stock frenzies.
- Private equity gutting essential companies and loading them with debt.
- Trillions of dollars sloshing around the system chasing yield, while regulators like the Securities and Exchange Commission and Federal Trade Commission are neutered by courts stacked with right-wing ideologues.
Remember what happened in 1929? The same “let the market police itself” ideology brought the whole thing crashing down. The difference now is that the contagion would be global and could even be instantaneous.
Trade shocks and de-dollarization are looming risks, too.
Trump’s tariffs hurt American farmers and manufacturers. His talk of a new 10% universal tariff could ignite a global trade war and could push countries like China, Brazil, or Saudi Arabia to finally abandon the dollar as the reserve currency.
If that happens—if Treasury bonds stop being the world’s safe haven—we’re looking at a collapse in our ability to finance debt, a surge in interest rates, a crash in the housing market, and mass layoffs. And the Republicans? They cheer it on. They think chaos is good politics.
And then there are tariffs.
There’s a reason the Founders of this country and Framers of the Constitution gave the power to enact tariffs exclusively to Congress. They knew that nobody would build a factory here unless they knew that a tariff defending their manufacturing would be in place for the decades it would take to recover their investment costs.
When tariffs are simply slapped here and there willy-nilly by a single man and can be easily repealed by the next president, no competent business manager would take them seriously: The only thing tariffs do, under these circumstances, is damage the economy. Meanwhile, Trump’s tariffs so far are going to cost the average American family $2,400 this year.
And, from Donald Trump’s point of view, they force foreign leaders to come grovel in front of him, which absolutely delights him. He brags about it, once noting that, “They are kissing my ass.” This is not trade policy; he’s just doing this for his ego.
And what about public confidence and how the loss of it could cause a depression?
You can’t have a functioning economy without trust in government, in institutions, in money itself. But the GOP has made destroying trust its central project.
They lie about elections. They undermine the courts. They spread conspiracy theories. They smear career civil servants. They openly praise authoritarianism.
When half the population no longer believes in the legitimacy of its own government, and when the other half sees that government captured by billionaires and zealots, economic confidence evaporates.
People stop spending. They stop investing. They retreat into cash and hoarding. That’s how depressions spiral out of control.
Now layer on climate instability and its ability to wreck an economy and you have a real mess.
The GOP’s climate denialism is not just immoral, it’s economically suicidal. Hurricanes, wildfires, floods, and heatwaves are destroying billions in assets every year.
Insurance markets are collapsing in California, Florida, and Louisiana. Agricultural yields are falling. Water shortages are hitting the Southwest. Floods are wiping out the Midwest and the South while wildfires torch the West. But Republicans keep slashing climate research, killing green energy subsidies, and banning environmental and social governance investment strategies. They are literally outlawing the future.
It’s a five-alarm fire, and the Republican arsonists are demanding more gasoline.
There is, however, a way out. We’ve done it before.
They’ve created the conditions for collapse, and they’ll blame immigrants, Democrats, or queer kids when it happens.
After the last Republican-created depression, then-President Franklin D. Roosevelt rejected the dogma of austerity and implemented the most ambitious suite of Keynesian policies in world history. He put people to work. He regulated the banks. He taxed the rich. He unionized the workforce. He broke up monopolies. He guaranteed Social Security, unemployment insurance, and the right to organize.
That system—Keynesian demand-side economics—created the greatest middle class the world has ever seen. It lifted millions out of poverty, stabilized capitalism, and gave rise to the postwar economic boom. It literally created the modern American middle class.
But starting in 1981, Reagan and the GOP declared war on that system. They gutted antitrust enforcement. They slashed top tax rates. They crushed unions. They deregulated finance. They privatized public goods. They shifted the burden of funding government from the rich to the working class. And then they blamed the victims of their policies for the resulting inequality and instability.
Now they’re going for the kill shot.
Trump and his Republican Party are not just misguided; they are dangerous. Their policies are not just bad; they are existential threats to economic stability. They’ve created the conditions for collapse, and they’ll blame immigrants, Democrats, or queer kids when it happens.
We can’t let them. We have to take our country back, economically, politically, morally.
That means rejecting trickle-down nonsense and restoring Keynesian demand-side policies. It means breaking up monopolies and rebuilding a regulatory state that works. It means bringing back progressive taxation and closing loopholes for billionaires. It means massive investment in clean energy, public health, education, and infrastructure. It means rebuilding trust in democracy by reversing Citizens United, defending voting rights, rooting out corruption, and calling out fascism where we see it.
This must be at the core of the platform Democrats run on this fall and during next year’s midterms.
The risk of a depression is real. But the solution is in our hands. We just have to stop letting the Republican Party light the matches.
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Global Financial Reform: Breaking Free from the Money Scam
Markets distorted by concentrated wealth do not serve the common good. They serve the already rich.
Jul 05, 2025
The $34 trillion U.S. federal debt cannot be eliminated so long as private bankers control money production and profit from interest on money they create from nothing. This column puts this issue in a global perspective.
Most of the U.S. federal debt arises when the U.S. government borrows from private bankers by selling them Treasury bonds and other financial instruments. A banker opens an account in the government’s name and enters the amount of the bond. With a few keystrokes, the banker creates expendable currency for the government’s use. The government is expected to repay the bank for the principal when due, plus interest.
When the bond principal is repaid, that money disappears, but no money has been created to pay the interest. Thus, the accumulating interest creates a perpetually growing government debt spiral.
Private bankers collect interest in perpetuity on money that could just as easily have been created by national governments interest-free with no need for repayment.
The Privatized Financial Commons
In modern society, nearly everyone depends on money to meet their basic needs through transactions in the productive economy. In this sense, the money supply that serves the productive economy functions as a global commons—a shared resource essential to life in the modern world. Like any commons, it should be subject to democratic governance and managed for the common good.
This is more than economic injustice. It is a recipe for global breakdown.
The world’s productive economy relies on a limited pool of liquid money—what economists call the M2 money supply. This includes physical currency, checking accounts, savings deposits, and other readily spendable bank holdings. As of 2025, global M2 is estimated at approximately $93 trillion. It represents the total stock of money available at any moment for real economy activity—paying wages, buying groceries, building homes, funding schools and hospitals, and much more.
Over 90% of the global M2 is created not by governments, but by private banks issuing loans. Most of the money the world’s people depend on for their living is interest-bearing debt owed to private banks that created it from nothing.
Beyond this limited pool of money circulating in the productive economy lies a vastly larger financial universe—over $500 trillion in non-cash financial assets: stocks, bonds, derivatives, and cryptocurrencies. These cannot be used directly to buy goods and services. To be used in the productive economy, they must be sold and thus converted into spendable money—into M2 cash.
Most of these assets are fictitious, created not to support productive activity, but rather to extract speculative profit from the productive economy. This vast pool of fictitious assets actively directs attention of investors away from supporting the work of the real economy.
Fictitious Wealth, Real Harm
The non-cash financial assets—especially derivatives, leveraged buyouts, and cryptocurrencies—serve only the already wealthy seeking to extract unearned wealth from the productive economy without doing or producing anything in return that might benefit society.
This parasitic financial system generates massive profits for the few while inflicting widespread harm on the many. Its consequences include:
- Eroding democracy, as financial elites gain disproportionate influence over governments and public institutions.
- Driving inequality, enriching those who already own assets while leaving the rest to borrow at usurious interest rates just to survive.
- Starving the real economy—where people grow food, care for children and elders, build infrastructure, and heal the sick—of stable, affordable financing.
- Fueling financial instability, as speculative bubbles repeatedly inflate and burst.
- Accelerating ecological collapse by prioritizing short-term gain over planetary survival.
Governments that could issue their own currency—interest-free and debt-free—instead borrow from private banks, thus redirecting public funds to pay interest on private loans. The result is a transfer of power and wealth from the many to the few, underwritten by public debt and justified by economic myths.
A System Justified by Myth
The defenders of the current financial system insist it promotes efficiency and innovation by letting “free markets” allocate capital. But markets distorted by concentrated wealth do not serve the common good. They serve the already rich.
Private banks lend primarily to those who already have substantial assets—speculators, real estate developers, and large corporations. They dismiss community-serving or ecologically restorative projects as “too risky” or “insufficiently profitable.”
A just and sustainable future begins with liberating ourselves from the tyranny of private money creation.
The result? A system in which the wealthy borrow cheaply to amass more wealth, while the poor pay high interest—if they can borrow at all. Local communities and vital ecosystems are left underfunded and vulnerable.
This is more than economic injustice. It is a recipe for global breakdown:
- Billionaires launch themselves into space while the poor go hungry.
- A debt-driven growth imperative accelerates extraction from Earth just to service unpayable loans.
- Financial imperialism traps nations in dependency and fuels geopolitical conflict.
- Governments that borrow their own currency become debt slaves—not sovereign democracies.
Begin with Public Education and Democratic Dialogue
Transforming this deeply entrenched system cannot be left to backroom negotiations, technical fixes, or elite commissions. Real change must begin with a broad, inclusive public conversation grounded in honest education and democratic engagement.
Most people have no idea where money comes from nor how the financial system works. This ignorance is not accidental. Mainstream economics education often obscures or distorts the process through abstract models and technical jargon that serve the interests of financial elites.
Reform begins with demystification. Citizens must understand how money is currently created and who benefits. They must also understand how we can change the way money is created so it serves public—not private—purpose. This awakening will require the leadership of independent media, educators, grassroots movements, public servants, and faith leaders committed to truth and justice. It must reach across generations, communities, and ideologies to ignite the public imagination.
A new conversation about money is foundational. Without it, movements for economic justice, environmental regeneration, or democratic renewal will remain trapped within the constraints of a system rigged against them.
Then, Reclaim the Public Power to Create and Govern Money
Once the broad public understands how money is created—and who benefits—we must take the next step: reclaim the power to create and govern money as a public function, accountable to democratic institutions.
This means:
- Transferring the power to create money from private banks to public institutions designed to serve the common good.
- Establishing an independent, transparent, democratically accountable body to regulate money creation—ensuring enough is created to meet real needs, but not so much as to fuel inflation.
- Creating public banks, credit unions, and community-rooted financial institutions that circulate money locally to support the meeting of real needs, while resisting speculative extraction.
- Curtail financial speculation by strictly regulating—or abolishing—predatory financial instruments like derivatives, leveraged buyouts, and crypto schemes.
- Using public money creation to fund health care, education, affordable housing, infrastructure, and ecological regeneration—rather than speculative profits.
In a healthy economy, money serves life. It facilitates the exchange of real goods and services. It connects people in mutual caring relationships. In such an economy, billionaires would not exist, because the mechanisms that currently create extreme wealth would be replaced with mechanisms that secure the well-being of all.
We should expect fierce resistance from those who profit from the current system. But there will be no refuge on a dying Earth—and there is no planet B. In the end, all but the most self-delusional will come to understand that their own survival depends on a living planet and a just society.
We should expect fierce resistance from those who profit from the current system. But there will be no refuge on a dying Earth—and there is no planet B.
From Illusion to Liberation
To reclaim our future, we must reassert the public’s right to create and govern money as a democratic instrument of shared well-being—not private wealth accumulation.
We will not end war while private financiers profit from war. We will not end poverty while public wealth is siphoned into private interest payments. We will not stop environmental collapse while debt-fueled growth drives relentless extraction. And we will not build an Ecological Civilization until we dismantle the financial system that feeds on life rather than serving it.
A just and sustainable future begins with liberating ourselves from the tyranny of private money creation. To build a just and sustainable future, we must make financial education and reform a priority of every social movement advocating for peace, justice, and a healthy living Earth.
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'Start Over From Scratch': Nobel Laureate Economists Denounce GOP Budget Bill
"The House bill addresses none of the nation's key economic challenges usefully and exacerbates many of them."
Jun 02, 2025
Half a dozen Nobel Prize-winning economists on Monday expressed their "grave concerns" about the sprawling budget reconciliation package passed last month by the Republican-controlled U.S. House of Representatives, warning that slashing an already frayed social safety net and exploding the record deficit in service of massive tax cuts for the wealthiest households will worsen the nation's economic woes.
"The most acute and immediate damage stemming from this bill would be felt by the millions of American families losing key safety net protections like Medicaid and Supplemental Nutrition Assistance Program (SNAP) benefits," Daron Acemoglu, Peter Diamond, Oliver Hart, Simon Johnson, Paul Krugman, and Joseph Stiglitz wrote in an open letter published by the Economic Policy Institute (EPI), a progressive think tank in Washington, D.C.
"The Medicaid cuts constitute a sad step backward in the nation's commitment to providing access to healthcare for all," the economists continued. "Proponents of the House bill often claim that these Medicaid cuts can be achieved simply by imposing work reporting requirements on healthy, working-age adults. But healthy, working-age adults are by definition not heavy consumers of health spending, so achieving the budgeted Medicaid cuts will obviously harm others as well."
🚨NEW: 6 Nobel laureate economists signed an open letter opposing the House budget bill 🚨 The bill adds significantly to the national debt while reducing incomes for the bottom 40%, they say. The most acute & immediate damage? Millions losing Medicaid & SNAP benefits: www.epi.org/publication/...
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— Economic Policy Institute (@epi.org) June 2, 2025 at 10:16 AM
Addressing the bill's staggering impact on public debt, the letter asserts that "U.S. structural deficits are already too high, with real debt service payments approaching their historic highs in the past year."
"The House bill layers $3.8 trillion in additional tax cuts ($5.3 trillion if all provisions are made permanent) on top of these existing fiscal gaps—and these tax cuts are overwhelmingly tilted toward the highest-income households," the Nobel laureates noted. "Even with the safety net cuts, the House bill leads to public debt rising by over $3 trillion in coming years (and over $5 trillion over the next decade if provisions are made permanent rather than phasing out). The higher debt and deficits will put noticeable upward pressure on both inflation and interest rates in coming years."
"The combination of cuts to key safety net programs like Medicaid and SNAP and tax cuts disproportionately benefiting higher-income households means that the House budget constitutes an extremely large upward redistribution of income," the economists warned. "Given how much this bill adds to the U.S. debt, it is shocking that it still imposes absolute losses on the bottom 40% of U.S households."
"The United States has a number of pressing economic challenges to address, many of which require a greater level of state capacity to navigate—capacity that will be eroded by large tax cuts," the letter concludes. "The House bill addresses none of the nation's key economic challenges usefully and exacerbates many of them. The Senate should refuse to pass this bill and start over from scratch on the budget."
The so-called Big Beautiful Bill is now in the Senate, where Minority Leader Chuck Schumer (D-N.Y.) has vowed on behalf of Democrats to "fight it with everything we've got."
"The Republican plan is simple: Sell out working and middle-class families to pay off the rich and well-connected," Schumer said in a "dear colleague" letter on Sunday. "The bill would raise costs and taxes by an average of more than $800 for 40% of American families. Twenty million Americans would see their healthcare costs skyrocket, while almost 14 million would lose their health insurance all together, including millions of children and seniors."
Furthermore, Schumer noted that "11 million people, including 4 million children, could lose access to safe and affordable food, while every one of the 40 million Americans receiving federal food assistance would get less support every month. All the while, their radical plan would see double-digit energy cost increases for American households and businesses, and threaten close to 800,000 good-paying jobs in the clean-energy economy."
"Their entire agenda," Schumer said of Republicans, "can be boiled down to this: Billionaires win and families lose."
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