A dozen ways that the Trump administration is destroying America’s economy (Part II)

The Trump administration’s attack on the U.S. economy stretches well beyond tariffs

Since returning to office barely three months ago, President Trump has waged a seemingly unrelenting “blitzkrieg” on America. My greatest concerns center on his administration’s erosion of rights, freedoms, and the rule of law—but its attacks on the economy seem to have drawn greater concern.

The first post in this series explored how Trump administration policies on trade, immigration, and labor have all started to wreak havoc on the U.S. economy. That post focused on costs associated with international tariffs, collapsing foreign tourism, increasing domestic labor shortages challenging vulnerable industries including construction and agriculture, and a generational tide of displaced government workers.

Since publishing that initial post in this series, I’ve noticed several reports confirming my concerns about the cascading effects of economic contraction, particularly in rural states.

The post continues the analysis by observing four more ways in which federal policies are undermining economic stability. This series will continue with at least one more post.

An economic sword of Damocles

The sword of Damocles references a myth about a man allowed to rule as king, on the condition that a sword hang above his throne suspended by a single hair of a horse’s tail. While enthralled by the power and prestige of his position, the circumstance also forced him to grapple with its precarity.

While the American economy is the world’s strongest, it remains subject to outside forces. That has been the eventual implication of the corporate globalization that, in a previous era, hollowed out domestic manufacturing industries.

I have long wondered, for instance, when China might take advantage of the chance to impose pressure on Washington by selling part of its substantial U.S. treasury holdings. That reportedly started last month and forced Trump to delay the onset of some signature tariffs that he had previously boasted about.

This post explores another handful of ways that Trump administration policies are damaging America’s economy, in ways that (my next post will explore) might ironically help humanity writ large.

5. Undermining consumer confidence, threatening housing markets and real estate values

The combined impact of Trump’s economic policies—including tariffs, tourism, domestic labor shortages, and displaced government workers—has imposed massive costs on American economic growth and decimated consumer confidence.

According to CBS News, 44% of Americans approved of Mr. Trump's handling of the economy in April, a drop of 7% from the 51% approval rating previously reported on March 2. Just yesterday, the University of Michigan updated its consumer sentiment index, which declined 2.7% from the month before to 50.8, the lowest level reported since July 2022. Consumer sentiment has tumbled nearly 30% since the beginning of 2025.

One of the biggest ways that consumer confidence impacts the economy is by either inhibiting or instead encouraging people to make substantial investments, for instance, in homes. Noting the impact of President Trump’s policies on consumer confidence, J.P. Morgan recently advised its clients that housing “demand—often understood through existing home sales—remains exceptionally low,” and that “housing inventory…remains below historical averages.”

Were housing markets more exposed to shocks in the broader economy, I’d anticipate that real estate prices around the country should suffer dramatically. But, for better or worse, I have yet to see evidence of that effect beyond the nation’s capital.

The bizarre continuity and stability in housing prices across the country might reflect structural barriers to financial accountability in the housing market. For instance, banks play a crucial role in keeping the racket running, but that’s the subject for another post.

6. Degrading economic infrastructure: the USPS

The right wing’s attacks on the U.S. Postal Service (USPS) date back to Trump’s first term, when he appointed Postmaster Louis DeJoy to run the agency into the ground.

Long a source of upward class mobility for Black Americans, the USPS historically played as crucial a role in racial integration as the military service branches. The Postal Service has also served as a bedrock of the American economy, delivering goods, and allowing businesses to reach their customers at relatively low cost.

The administration has announced that at least 10,000 postal workers will lose their jobs, while indicating that more will soon join them. To whatever extent the USPS struggled to satisfy consumer expectations before, it will grow only more challenged as its workforce shrinks.

I’ve had a chance to experience the erosion of the USPS first hand.

Since 2022, I’ve worked primarily as a snowboard instructor during the winter. That role frequently puts me in a position to accept cash tips. Since my bank doesn’t have a location near where I live, and didn’t allow cash deposits via ATM, I’ve made a practice of visiting the local post office to obtain money orders which I then deposit in my bank account via snail mail.

Earlier this year, I sent a money order to my bank for deposit in my account. I paid extra at the Post Office counter for certified mail, since I knew I might need to track the deposit.

In the past, such deposits were normally received my bank and credited to my account within days. This time, however, it took several times longer than that. When I noticed that it did not seem to have been received after a week, I checked the USPS website to track the package, learning only that delivery was still in process. I did so again on half a dozen other occasions, and ultimately waited three weeks for that check to be delivered.

That’s just a single anecdotal example, but it indicates the challenges facing even the delivery of certified mail.

One might imagine that private services could conceivably replace the Postal Service, but none wield the scale necessary to perform all of its functions. If anything, shocks to the broader economy are cascading by limiting the ability of private corporations to deliver mail. For instance, the United Parcel Service (UPS) has announced plans to cut tens of thousands of jobs this year, citing not only abstract “changes in the global trade policy,” but also specifically “new or increased tariffs”.

7. Degrading economic infrastructure: the FAA

The Federal Aviation Administration performs several functions, including regulating air traffic control and setting minimum safety standards.

Accidents involving airplanes have grown alarmingly frequent, driven to a large extent by staffing crises and government cuts made in the banner of suppressed efficiency that have instead sent travelers to early graves.

Even after a fatal midair collision at Reagan National Airport that killed 67 people in January, the Trump administration fired hundreds of FAA staff, including personnel hired for maintaining radar, landing and navigational aids.

The airport in Newark, NJ serving the New York metropolitan area has offered a particular reflection of the predictable impacts. Jonathan Stewart, a veteran air traffic controller, was quoted by CNN just last week to voice alarms with staffing and technology gaps. According to CNN, Stewart’s concerns included “working multiple positions per shift to give other air traffic controllers breaks and having to write callsigns in a notebook out of fear of losing radar and radios.” In his words, “Pushing people beyond their limits is not good business….I don’t want to be responsible for killing 400 people.”

Technology issues have also impacted other airports, including Denver’s, where air traffic controllers lost communications with airplanes in flight for over a minute last Monday, May 12. The Denver Air Route Traffic Control Center covers a massive expanse of airspace, encompassing 285,000 square miles across nearly ten states.

2025 has already emerged as the most deadly year in U.S. aviation in decades. Degrading public infrastructure that used to safeguard airplane safety effectively invites more blackouts, collisions, and even deaths. Beyond the direct impacts of those preventable events, a resulting chilling effect inhibiting other potential travelers has already carried further economic impacts that, to my knowledge, no one has yet quantified.

8. Undermining Social Security could put legions of seniors on the streets

Enacted during the Great Depression to provide an economic lifetime lifeline to struggling workers as they face replacement by younger workers, Social Security has played a vital function in allowing the poorest Americans to enjoy stability in their older years. The system has been operational for nearly 90 years and currently administers annual benefits totaling roughly $1.6 trillion in benefits to around 70 million Americans.

All of them would struggle to survive should the solvency of the Social Security system become compromised.

The solvency of the system over the long-term has been called into question for decades, but never has it faced threats as dire as those that confront it today. A Gallup poll released this spring found that 52% of U.S. adults are expressing “a great deal” of worry about the program's future, a 15-year high.

Those concerns appear to be well-founded. According to workers at the Social Security Administration (SSA), staffing cuts and office closures have prompted “complete, utter chaos” and threaten to send the agency into a “death spiral.”

The agency’s website has crashed several times this year, while public-facing phone services have been cut. Meanwhile, the Acting Commissioner has confirmed that DOGE staff are effectively running the SSA.

One long-time agency worker and military veteran specifically criticized cuts recommended by the so-called Department of Government Efficiency (DOGE) once led by right wing industrialist Elon Musk, explaining that “No one knows what’s going on. They’re just coming up with ideas at the top of their head….Common sense is something they lack. They don’t know what they’re doing.”

According to a spokesperson for the American Federation of Government Employees’ Social Security Administration general committee, the union representing over 40,000 social security workers, the current administration’s cuts at the SSA represent “a concerted attack on the legitimacy of social security itself. The promise that this country has made to the public with respect to income security is being broken.”

Previous administrators of the system have warned that its solvency is in rapid decline, and warned the public in a recent Senate hearing about impending cuts in benefits that could be made inevitable by staffing cuts and the closure of offices.

Any suspension of benefits—however brief—could put millions of seniors on the streets.

Paid subscribers can access a draft chapter of a book I’m writing about metaphors and lessons for life that I’ve discovered while snowboarding. It’s the first one that I’ve fleshed out since sharing my initial outline earlier this year.