Galloway warns Trump’s deficit will be ‘triple’ Harris’s plan — good for investors, bad for young Americans
America has long grappled with a growing deficit problem, as government spending outpaces revenue. Scott Galloway, professor of marketing at New York University, believes the situation is set to deteriorate further now that Donald Trump has secured the presidency.
In an interview with CNN’s Anderson Cooper days following the 2024 U.S. presidential election, Galloway delivered a stark warning about the economic fallout of Trump’s upcoming term.
Accredited investors can become the landlord of Walmart, Whole Foods or Kroger — and benefit from regular distributions without lifting a finger. Here’s how
Car insurance premiums in America are through the roof — and only getting worse. But less than 2 minutes can save you more than $600/year
These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how
“The Harris campaign was unable to expose a basic economic truth, and that is deficits, which have been bad under the Biden administration, but under the Trump administration versus the Harris economic plan, deficits are going to be triple,” Galloway said.
The numbers already paint a troubling picture. In fiscal year 2024 alone, the federal government spent $6.75 trillion while collecting $4.92 trillion in revenue, resulting in a $1.83 trillion deficit. Yet, Galloway suggests the consequences of even higher deficits could be generational.
“It’s great for you and me Anderson, because we own homes and we own stocks, and the stimulus of that deficit spending will take the value of our stocks and our real estate up,” Galloway explained. “But our kids are going to have to pay that back at some point.”
He summed it up with a blunt metaphor: “All deficits do is take the credit card of youth, run it such that we can have champagne and cocaine in the club — deficits are nothing but delayed taxes on the young.”
It’s a grim outlook, and Galloway isn’t alone in raising concerns. A week before the election, the Committee for a Responsible Federal Budget provided a central estimate that Trump’s proposed policies could add $7.75 trillion to the national debt over the next decade — nearly double the $3.95 trillion central estimated increase under Harris’s plan.
If you’re worried about the implications of this growing fiscal burden, here’s a closer look at how you can hedge against the economic impact — drawing from Galloway’s insights.
Galloway pointed out that one reason the projected surge in deficits under Trump is “great” for him and Anderson Cooper is that they “own homes.” He noted that deficit spending can inflate asset values, including real estate, while warning that the younger generation may face inflation and higher mortgage rates.
It seems that excessive government spending can indeed contribute to rising prices. Research out of MIT shows that federal spending played a significant role in the inflation spike Americans experienced in 2022.
Fortunately, real estate has historically been an effective hedge against inflation. When inflation rises, property values often increase as well, reflecting the higher cost of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that can adjust with inflation. This combination makes real estate an attractive option for preserving and growing wealth during periods of escalating price levels.
While Galloway cautioned about the potential for high mortgage rates in the future, the U.S. Federal Reserve has begun cutting interest rates, providing opportunities for potential buyers, while experts recommend shopping around and obtaining quotes from several lenders to secure the best mortgage rate possible.
Of course, these days, you don’t need to buy a house to start investing in real estate. There are plenty of real estate investment trusts (REITs), as well as crowdfunding platforms that offer everyday investors access to institutional-quality property portfolios, allowing them to earn rental income without the responsibilities of being a landlord.
Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
As Galloway noted, older generations tend to hold stocks — another asset class that can benefit from deficit spending. When the government spends more than it earns, additional funds are injected into the economy, potentially boosting corporate profits and investor confidence in the short term.
Stocks can also serve as a hedge against inflation, which deficit spending can exacerbate. As inflation drives up costs, companies capable of passing these expenses onto consumers through higher prices can maintain or even grow their profit margins. This ability to adapt could lead to stronger earnings and potentially higher stock prices.
And you don’t have to be among the wealthy, like Galloway or Cooper, to get a piece of the action. These days, many platforms enable you to buy and sell stocks with minimal initial investment requirements. Some apps can even help you invest automatically using your spare change, making it easier than ever to grow your wealth.
Galloway isn’t alone in warning about the inflationary risks of a second Trump presidency. Former U.S. Treasury Secretary Larry Summers echoed similar concerns to CNN, cautioning that if Trump implements his economic plans, “there will be an inflation shock significantly greater than the one the country suffered in 2021.”
A traditional hedge against inflation is gold. Unlike fiat currencies, the precious metal can’t be printed in unlimited quantities by central banks. And because its value isn’t tied to any one currency or economy, gold could provide protection during periods of economic uncertainty. This unique characteristic has earned it the reputation of being a “safe haven” asset.
In 2024, gold has lived up to its reputation, soaring by over 25% and surpassing $2,600 per ounce.
These days, there are many ways to gain exposure to gold. You can own bullion, buy shares of gold mining companies or ETFs or even tap into potential tax advantages with a gold IRA.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
