with Taylor St. Germain

2030S DEPRESSION FORECAST FOLLOWING THE ELECTION

This week on TrendsTalk, ITR Economist Taylor St. Germain highlights our forecast for the 2030s depression despite the results of the recent US presidential election. How can business leaders make the most of these next few years of economic growth before the 2030s downturn? Tune in to find out!

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Taylor St. Germain

MEET YOUR HOST

Taylor St. Germain

As an experienced economist, Taylor St. Germain provides consulting services for small businesses, trade associations, and Fortune 500 companies across a spectrum of industries. His dynamic personality and extensive knowledge of economic trends and their business relevance are highly valued by clients and colleagues alike.

“Join me on the TrendsTalk podcast to explore the world of economics. Episodes offer insightful discussion and expert interviews. We cover relevant economic concepts in an accessible way. Whether you are a curious layperson or an industry professional, TrendsTalk is your go-to source for thought-provoking analysis and a deeper understanding of the economic forces shaping our world.”

Key Episode Takeaways

  • 0:09 – Our 2030s outlook following the 2024 election results
  • 1:21 – Latest figures on government spending and debt
  • 3:03 – Key factors supporting our 2030s depression forecast
  • 4:00 – Positive outlook for younger generations
  • 4:40 – Preparing for the expected growth over the next few years
  • 5:21 – Financial Resilience program will help your business prepare for the 2030s
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The below transcript is a literal translation of the podcast audio that has been machine generated by Notta.

Hi everyone, thanks so much for joining me on this episode of TrendsTalk. We at ITR are your unbiased and apolitical source of economic intelligence. I’m Taylor St. Germain joining you today from my home here in Colorado and I wanted to talk with you about the 2030s.

We update you frequently on our 2030 expectation and despite the recent election results, we still see 2030 as quite a problematic time for the U.S. economy and the global economy as we experience the next major economic downturn. I wanted to provide you with an update on this picture given the election. We get a lot of questions “has the election results changed 2030?” and the answer to that is no. We’re well on that path. We need to see some, I think, pretty drastic changes to a lot of different factors to change our mind there and that just seems very unlikely. So the 2030s and that next major downturn really still are on track from our perspective and I wanted to share with you a little bit why that that’s the case.

Now the first thing I wanted to start off with is an updated version of some of the spending that we’ve seen as of late. If we look at current transfer payments here in the United States, we are spending about $4.3 trillion on transfer payments, Medicare, Medicaid, stimulus checks, Social Security all looped into that bucket and we’re at about $4.2 trillion in terms of spending. We’re also spending on consumption expenditures. That’s another $1.4 trillion and finally are interest payments on the national debt have now also crossed above $1 trillion. So if you’re adding these metrics to one another, we’re talking about 2.5 trillion in spending about between interest payments and consumption expenditures and another 4.3 trillion in just transfer payments. That’s a lot of money in terms of spending. And we’re only bringing in as of the latest data point about 3 trillion in tax receipts.

So what does this mean? This means our government debt is likely going to continue to balloon as we progress throughout the next five years, leading up to 2030. And while there’s whispers of seeing some fundamental changes in spending with this administration, it would have to be so dramatic in terms of changing that level of spending that it just seems very unlikely that even any incremental spending cuts we would see are really going to have an impact on how we think about 2030.

Not to mention one of the key drivers of 2030 is demographics. And while it’s pretty hard to change demographic trends with this baby boomer generation continuing to retire out of the workforce. Our debt to GDP ratio is currently 120% here in the US. And we would expect that to continue to climb over the course of the next five years. So from an overall perspective, demographics still support our 2030 expectation. So do health care costs, social security costs, inflation and national debt concerns. Those are five key variables to 2030 and nothing’s changed in our perspective as it relates to those five key variables. So we still see that yet despite 2025 through 2029 being characterized by economic growth, we have this challenge coming our way at the end of this decade.

Now I do want to highlight a positive, especially for the younger generations. The baby boomers currently hold about 23 trillion dollars in corporate equities and mutual funds. That’s compared to the 9 trillion that the Gen Xers have and the 3.18 trillion that the millennials have. So if you’re a millennial and Gen Xer, despite the 2030 sounding like a challenging time, there’s going to be a lot of money that becomes available. And that should be something that really excites you in terms of preparing the right way for the next five years for what’s coming in 2030.

Now, when I say preparing the right way, it is so. important that we don’t lose sight of the growth in the second half of this decade. We have significant growth. Five years of consecutive GDP growth is our expectation as we look at 25 through 29. So let’s not lose sight of what’s coming at the end of the decade, but let’s really make sure we’re investing in our businesses and in our personal lives now so we can enjoy the benefits of this growth over the next five years and put ourselves in a strong position to be prepared to be proactive rather than reactive as that 2030 time comes our way.

If you’d like to know more about what the second half of the decade looks like for your business, and what the 2030s might look like for your business, we are forecasting businesses and the business environment, specific industry environments for 2030. So you can have a sense of what that might look like. We do that through our financial resiliency program here at ITR. And if you’d like more information about that, please reach out to us.

So again, overall, nothing’s changed in terms of our 2030 expectation and don’t lose sight of the next five years, take advantage of them, grow and put yourself in a strong position to really take on this downturn that we have coming at the end of this decade.

I’m Taylor St. Germain with ITR Economics. Thanks for joining me on this episode of TrendsTalk. Please remember to like and subscribe to TrendsTalk wherever you listen to your podcasts. And I’m looking forward to seeing you all in the next one. Take care for now.