Publications: Notes at the Margin

The Long-Term Outlook: An Ugly Scenario (May 19, 2025)

 

Few readers will recognize the names Chuck Jones or Michael Maltese. Jones, a Warner Bros. cartoonist, and writer Maltese created the Roadrunner and Wile E. Coyote characters in 1948. Almost everyone has seen at least one episode where Wile E. pursues the Roadrunner off a cliff, runs out into open space, and then, prompted by his prey, makes the mistake of looking down, which plummets him disastrously to the canyon floor far below. The US economy—led by Wall Street investors encouraged by senior Trump administration officials—is the financial version of Wile E. Coyote chasing the Roadrunner (economic growth), heedless of the fact that changes to political institutions, the rule of law’s breakdown, the cancelation of federal programs, disastrous trade policies, and massive federal employee layoffs have taken the United States well beyond the precipice. Eventually, it will look down and see the deep fiscal catastrophe it is about to plunge into.

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