Is The US Headed Towards A Recession?

Is Trump Trying To Push The US Into A Recession?

TYLER DURDEN

One month ago, when we first realized just how much fat Elon Musk's DOGE was slashing from the government money-laundering apparatus, we made a controversial (at the time) observation: so much (deep state laundered) money was about to come out of the economy, the US would enter a recession, first in Washington DC (something which Michael Hartnett and others have since confirmed) and then across the US.

We were surprised at how much pushback we got, especially from supporters of Trump. But this wasn't meant to be a judgment call against the new administration which had only been in power for a few weeks. If anything, we had explained long ago that the only reason the US economy hadn't collapsed into a recession long ago is because of Biden's unprecedented debt issuance spree which we first described in the summer of 2003 (see "Here Is The $1 Trillion "Stealth Stimulus" Behind Bidenomics"), and which had sent US debt soaring by $1 trillion every 100 days.

But now that particular debt party appears to be ending.

Understandably, defusing this debt time-bomb is precisely what Elon Musk has undertaken, and the process of undoing all the catastrophic trends that culminated under the Biden administration would inevitably result in a recession (just as allowing the debt pile up to continue its record meltup was the only thing that delayed the inevitable economic slowdown).

Still, our observation came at a time when the "US exceptionalism" trade was still all the rage if only for a few more days, and thus few were willing to accept it. 

Then little by little sentiment turned, and just a few weeks later, Wall Street was full of reports such as this one from Mizuho's Dominik Konstam (available to pro subs)"discovering" what we had said weeks earlier, namely that the efforts of DOGE would spark a new recession, first in the government and then everywhere else.

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