April 21, 2025

Hi everyone, my name is Taylor St. Germain with ITR Economics. Welcome to this edition of TrendsTalk. We at ITR are your apolitical and unbiased source of economic intelligence and today I wanted to talk a little bit about the 2030s.

Now, as many of you know, in 2030 ITR Economics is forecasting the next depression to be taking place and that depression is likely to last from 2030 to 2036 from our perspective, a general six year period of decline. Now I get a lot of questions about this depression and we have so many resources for you on our website on the 2030s. But one of the primary questions that I get is, “Is there anything we can do to prevent the 2030 Depression?”There’s always something we can do, folks. So the question is, how likely is it that we take those steps as a government, as politicians? And that’s where things can get a little bit more challenging.

So let me remind you that there are five primary drivers of the 2030 depression. There are demographics, health care costs, entitlements, inflation and national debt. And so, especially with the Department of Government Efficiency coming in and looking at making the government more efficient and talking about cutting spending, I get the question a lot, “Is that enough to change our thoughts on 2030?” And the answer is no, that is not. Now, I think making the government more efficient and reining in a little bit of our what I’d call out of control spending of the last few decades, I think that it’s positive that we’re talking about these things. But in terms of the actual impact on our thoughts around 2030, it’s not making much of an impact on our thought process at all.

Let me remind you that one of the primary factors on the 2030s is that we have a challenging demographic trend, not just here in the US, but around the world. When you look at populations, we’re expecting population decline. I should say the UN, who forecasts populations, is expecting to see China’s population decline. Many countries in Western Europe experiencing population decline, Japan as well. With these large baby boomer generations around the world exiting the workforce and moving into those later years of their life. That creates a situation where most countries will be dealing with much higher healthcare costs and social security costs or entitlement costs, depending on how it’s referred to in their associated country.

And folks, it’s very hard to change demographics. That’s one of the reasons, personally as an economist, I’m confident in the ITR’s 2030 expectation. And I think many of my colleagues would agree there is it’s very difficult to change demographics. You know, if all of a sudden we all started having more babies now, it still doesn’t impact 2030. So that’s a reason we see 2030 being unchanged.

Now, getting back to the initial comment that I shared or the question that I received, can we do anything about this? Well, we sure could cut spending, but at the same time you cut spending, you’d likely need to raise taxes as well. And envision yourself as somebody running for president of the United States and saying, I am running on raising taxes and cutting spending. My hunch is that’s not likely to get you elected in this country. And I think there’s a lot of precedents throughout recent years that would suggest that’s likely the case. And that’s the reality of what we deal with as we think about 2030 is what might be best to avoid 2030 isn’t always what’s going to get you elected in this country.

And so as a result, ITR continues to remain confident in 2030. Now, if the Department of Governmentman Efficiency and Elon Musk are able to save $1 trillion or $2 trillion, that’s great, but it doesn’t change our thought process on 2030. Because again, you really need to think about both sides of the equation. It’s very likely we’d have to cut spending and raise taxes. And even if we do that, because of demographics, unlikely that 2030 is really going to be impacted from our perspective.

All the while, ITR projects five years, at least, of persistent inflation, which will drive up interest rates, which will drive higher interest payments on our national debt, all of which point to an increasing national debt, despite the Department of Government efficiency’s best efforts. Folks, this is just what the data tells us. It doesn’t matter to me. It doesn’t matter to ITR who you voted for. And the data will show that regardless of its Democrats or Republicans, these trends have been moving in a concerning direction for a number of decades. So we don’t have to make this a political thing. The data tells us we need to be concerned about that 2030 period of time. And even with what we’ve seen so far in 2025, our thoughts have not changed there.

Again, we have so many resources, presentations, and ways to interact with ITR. If you want help preparing your business in the second half of this decade and throughout the 2030s, please feel free to reach out to us or head over to our website.

I want to leave you all on a positive note, which is if we take the next five years to prepare, even major downturns like the 2030s can be some of the best times to be in business. But there’s a big difference between a prepared downturn, a prepared recession versus an unprepared one. And so that’s why we need to take the time now to really prepare for what’s coming our way.

Thanks so much for listening to this episode of TrendsTalk. Please like and subscribe to TrendsTalk wherever you listen to your podcasts. And I look forward to seeing you all in the next one.