Election Day

Today is election day, and while it always feels like time stops during these monumental moments, we know that regardless of the outcome, we'll continue to live our lives and make the best of the situation. With that being said, we'd be incredibly naive to suggest that this election can't have a huge impact on our economy and wealth over the next four years and beyond. Therefore, we want to share our thoughts.

However, rather than going through each topic one-by-one and comparing and contrasting the candidates' views, we want to talk about the one we think is most important. We're talking about the size and scope of the U.S. government's growth, which is being being funded by American taxpayer dollars and inflation thanks to our lack of sound money.

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We'll start off by saying that while voters may still cling to their preferred party, this election has absolutely nothing to do with Democrats vs. Republicans. Those are effectively just meaningless words that change every four years, evidenced by former Democrat supporters (RFK Jr., Tulsi Gabbard, and Elon Musk) who are now aligned with Trump and former Republicans (Dick Cheney & 200+ Bush, McCain, and Romney staffers) who are now aligned with Harris.

Given the lack of context around policy objectives, we can assume that Kamala wishes to conserve high taxes, big business, open immigration policy, burdensome regulation, limited energy production, heavy government spending growth, and funding both sides of foreign wars. This is not only consistent with Biden and Harris' current term, but it's mostly a continuation of the same elitist uniparty objectives from George W. Bush's and Barack Obama's terms. We'd be open to reasons why things may be different, but aside from the abortion topic (which was already ruled on by the Supreme Court), we're just left with some cackling and empty statements like "I'm not J'Biden."

On the other hand we have Trump. He's more of a bull in a china shop, and while he failed to "drain the swamp" in his first term, the status quo began to change with lower taxes, increased energy production, regulation cuts, and no new wars. Unfortunately, he walked into Washington for the first time as a politician without many allies, and as a result, he (regrettably) appointed many people who wished to preserve the status quo. We're going to give you a background of where we are today and let you know why rhetoric around the income tax, the Federal Reserve, and government efficiency actually gives us hope that things may change drastically this time if Trump is elected.

Background

Government apologists love to cite the current state of affairs or recent history to justify America's so called brilliance or dominance. For instance, you might hear stats about new military equipment (where parts are still sourced from China) to justify our global dominance. You might hear how great our economy is because of the total market value of our stock market. You might hear how the world "needs" U.S. dollars to survive simply because some third world countries still use them as a transactional currency. However, you won't hear anything about this 50+ year trend, in which the government has effectively become a failed empire filled with a rotating group of corporate lobbyists who act in the best interest of the top 1%.

You won't hear about the misaligned incentives in the healthcare industry, leading us to become sicker despite spending more on healthcare than any other country. You won't hear even the man who killed Osama Bid Laden himself claim that we're bogged down in pointless wars. You won't hear that while savers get no yields on their cash, yet pay much more for loans, the largest banks raked in $1T from higher interest rate policies, effectively paid for by the taxpayer. Even one of the harshest critics of Donald Trump admits that his movement is one designed to upend the status quo.

The difference this time is that Trump has surrounded himself with people who agree in many ways. J.D. Vance, RFK Jr., Elon Musk, Vivek Ramaswamy, Tucker Carlson, and Tulsi Gabbard are examples of people who have been outspoken in their shared beliefs centered around destroying the size and scope of the government or the government's influence in the private sector.

Tariffs & Income Tax

When it comes to tariffs, we'll start off by saying that tariffs alone don't really help the country. However, perhaps Trump's biggest strength is his understanding of the negative consequences from America's increasing reliance on foreign manufacturing. While it's easy to blame China, they simply took advantage of the situation, gladly producing goods for us in exchange for printed dollars that they could use to invest in developing countries across the world to increase their influence. There's nothing inherently evil about it. However, Trump knows we cannot continue outsourcing jobs while turning around to print money to spend overseas. His tariff policy is meant to serve as a consumption tax.

This initially may drive costs higher, but it's going to make U.S. manufacturing much more competitive. However, one difference this go-around is Trump's changing rhetoric on the income tax, which may help offset any negative effects of increased tariffs. Trump first floated the idea of lower taxes for everyone (again). He then suggested that there should be no tax on tips. Later he proposed no taxes on social security benefits. And last week on Joe Rogan's podcast, Trump admitted he was open to the idea of abolishing the income tax altogether. This would be highly beneficial to ALL Americans.

The Federal Reserve

When it comes to the Federal Reserve, Trump has also stated that he wants lower interest rates and he ought to have a say on rate decisions. While Wall Street hates this idea, claiming the Fed is entirely "independent" for a reason, they're effectively just a privately owned (by the banks) cartel, responsible for the largest wealth transfer in the history of the country. Therefore, we don't think it's completely unreasonable that a publicly elected official has a say on interest rates that impact everyone.

However, what's even more interesting is J.D. Vance's recent admission that he's open to "Ron Paul's Argument on the Fed." For those of you who don't know, Ron Paul is a former congressman and presidential candidate and the author of many books, including "End the Fed," in which his position is self explanatory. However, even Trump has historically favored a gold standard or a return to sound money.

Government Efficiency

One thing people fail to realize is that government spending isn't free. It's always paid for by taxes or inflation. Therefore, abolishing the income tax (government revenue), and abolishing the Fed (helps fund the government by debasing dollar debt), would effectively mean that government spending couldn't exist - at least anywhere near the level it's at today. This is where Elon Musk comes in, presumed to be in charge of some "government efficiency" program. Similar to how Musk cut costs significantly after buying Twitter, Trump believes Musk could do something similar with the government. Vivek Ramaswamy, who may be set to join Trump's cabinet in some role, has also expressed cutting the federal workforce by 75%.

Government Spending

While all of this sounds promising, the government's largest expenditures are entitlements (Social Security & Medicare), national defense, and the interest on our debt. We believe it's unlikely that Trump pushes through heavy cuts to entitlements or defense spending. Rather, we think that cutting taxes and any action to limit the Fed will force Congress to curtail reckless government spending. The growth from lower regulations, higher energy production, and fewer unnecessary wars may put a halt to government spending growth.

Conclusion

These are all big "ifs," and while inflation may persist in the short-term, we think Trump's administration could be our best shot at reversing this structural inflationary trend in which people and small businesses are taxed to death to pay off special interests and elites. If these actions are taken, we believe it could be the strongest real growth the economy has seen in over a century.

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