Considering Trump’s psychology, worldview, and negotiating strategy, along with the national interests of the United States — which we have analyzed in previous articles — we aim to forecast the upcoming disruptive initiatives of the second Trump administration and examine their potential consequences both domestically and internationally. We have identified five policies that the new administration could implement or is already implementing.

The first option could be reducing public spending by cutting assistance programs and the federal workforce. This involves reforming or cutting programs such as Social Security, Medicare, Medicaid, and welfare, as they comprise a significant portion of the federal budget. At the same time, it also means cutting defense spending. The Pentagon’s budget is actually the largest by far. Cutting welfare programs and overseas military commitments — including aid to allies — would likely free up funds and help reduce the substantial public deficit.

Many of these measures, however, would be politically difficult to implement due to likely congressional opposition or are so highly unpopular that they were excluded from the campaign platform. Nonetheless, they are probably the path the administration will follow. The cut, already underway, to discretionary spending — which involves reducing funding for non-defense programs, such as education and infrastructure — does not provide enough savings. Even the current efforts, carried out by DOGE to shrink the bureaucracy through aggressive cuts to federal agencies — aimed at lowering salaries and eliminating inefficiencies — have shown that meaningful results cannot be achieved. At least, that is what the figures reported by The New York Times indicate, though not those declared by Elon Musk.

The second strategy might involve increasing revenues while also lowering the tax base and income tax rates. Raising tariffs on imported goods, as is already underway, can partly generate revenue, but it could also raise prices for consumers, reduce their purchasing power, and lead to inflation. It might also trigger trade retaliation, harm economic growth, and, by decreasing domestic consumption, which accounts for over 70% of the U.S. economy, possibly even lead to a recession. Lastly, it could lead to larger deficits because compensating for the lost revenue from proposed tax cuts would require tariffs much higher than those currently announced.

The third approach might be to persuade the Federal Reserve to reduce interest rates. Trump has been very critical of the Fed whenever it raised rates. If he were to pressure the Federal Reserve — or appoint officials who share his views — he could advocate for lower rates. However, low interest rates do not directly decrease the debt; they only reduce the cost of borrowing, and the United States already has a primary budget deficit. Additionally, if rates stay low while debt continues to grow, inflation could increase, the dollar could weaken, and the economy might face a period of stagflation or even recession — an outcome the administration itself does not dismiss.

The fourth initiative could involve urging foreign nations to refinance U.S. debt with longer-term maturities and also freezing principal and interest payments to hostile countries. The aim is to restructure the national debt by pressuring foreign creditors — such as China, Japan, and other major holders of U.S. public debt — to extend the maturity of U.S. Treasury securities, effectively turning short-term debt into long-term debt. It might also include suspending interest payments or defaulting on debt held by countries considered “hostile” to the United States, which could include China.

The first measure would ease immediate repayment pressure, but it wouldn’t solve the issue, as long-term debt has a higher interest rate than short-term debt. The second measure concerns the feasibility and credibility of the entire dollar system. It also raises the risk of severe retaliation and the possibility of a global financial system collapse.

The fifth initiative will likely promote economic growth based on neoliberal theories. Trump believes that deregulation, low interest rates, and a weak dollar could help boost the economy. If he’s right, GDP growth might outpace debt growth. And if the economy grows faster than the national debt, the debt-to-GDP ratio will decrease over time.

The repatriation of production units and capital — which can only be modest — supported by Trump, could generate a short-term revenue boost. Additionally, increased domestic energy production, including oil and gas extraction, may also reduce energy costs. However, whether deregulation, low rates, a weak dollar, reshoring, and the “drill, baby, drill” policy will stimulate growth remains uncertain. The overall outcome of Trump’s economic policy may not be expansion, but rather stagflation or even recession, as we have seen.

Let us therefore analyze what could happen domestically if Trump were to implement the significant cuts to Social Security, Medicare, Medicaid, and welfare programs mentioned earlier, especially combined with the rise of protectionist tariffs, increasing inflation, and an economic recession. The United States may face an unprecedented social crisis characterized by mass protests, institutional clashes, and heightened political instability.

The immediate effects on Americans could include poverty, unemployment, and despair. Reducing social programs combined with a recessionary economy would severely impact millions of Americans. The healthcare system might collapse, leading to higher death rates as millions lose access to medical care. Most of these deaths could come from treatable diseases and overdoses, worsened by the ongoing opioid crisis. Remember, 29% of the American population is already considered clinically depressed, and opioids and fentanyl have already claimed tens of thousands of lives.

Cuts to Social Security would also leave millions of seniors without income, leading to increased homelessness and collective despair. The most affected groups would be the white working class, the African American community, and Hispanics. Ultimately, the spread of poverty could lead to an increase in crime. Increases in thefts, robberies, and gang activity might become especially problematic in urban areas. There could also be a resurgence of racial and class tensions, with protests similar to those of 2020.

Another significant factor is the increase in business failures and unemployment. A recession, combined with welfare cuts, would significantly decrease consumer spending, leading to the failure of many companies. The hardest-hit sectors would be retail, restaurants, construction, and healthcare. Massive layoffs in these industries could push unemployment to levels not seen in the United States in decades.

All this could provoke social reactions such as protests, even violent ones, rebellions, and class conflicts. Initially, we would see large-scale demonstrations. Unions and workers might organize nationwide strikes against cuts to social programs. Mass protests could erupt in major cities, with potential for violence, clashes with police, road blockades, occupation of public buildings, and unrest similar to the Occupy Wall Street movement.

The federal government’s response to street unrest could lead to conflicts between Democratic-led states and the federal government. Progressive states like California, New York, and Illinois might openly challenge the policies of the Trump administration, creating divisions between the federal government and local authorities. Autonomous initiatives could develop to safeguard welfare, potentially heightening political polarization between red and blue states. The risk of an unprecedented institutional fracture in modern American history would increase. Additionally, extremist movements could gain strength and further polarize American politics. The progressive left might radicalize, with growing support for socialist or anarchist movements. At the same time, far-right groups and armed militias could respond with attacks on protesters and urban violence. Internal terrorist attacks or insurrections, similar to the Capitol riot on January 6, 2021, cannot be ruled out.

Political instability, extreme polarization, and institutional crises could trigger a government crisis. If the situation worsens with violent protests, some moderate Republicans might distance themselves from Trump. Congress might conduct investigations or attempt impeachment, even though passing such measures would be challenging with a Republican-controlled Senate. This could create space for authoritarian measures and suppression of dissent. Trump might respond with repressive actions, including anti-protest laws, deploying the National Guard, and restricting civil liberties. He could declare a state of emergency, granting him extraordinary powers similar to those under the post-9/11 Patriot Act. He might leverage the FBI and Department of Justice to target political opponents: Democrats, journalists, and activists. If social instability continues into the 2028 elections, we could see new episodes of political violence or even attempts at a “soft coup,” such as manipulating the electoral process or invalidating unfavorable results.

One notable economic effect is capital flight. A combination of recession and high inflation could result in a prolonged period of economic hardship. Investors might lose confidence in the U.S. economy, potentially triggering a stock market crash. The departure of companies and further capital flight could follow. Many multinational corporations might relocate their headquarters outside the United States. Wealthier states, such as California and New York, could explore plans to independently shield themselves from the crisis. Increasing internal separatist tensions might even arise, with states considering economic autonomy or outright secession.

The increase in federal debt would be another serious consequence. Ironically, welfare cuts might not save money, as they could lead to higher costs for aid to struggling sectors, policing, emergency health services, and handling social crises. Distrust might also cause the dollar to plummet, with worldwide effects.

At the international level, this would also accelerate the decline of the already waning U.S. hegemony. If the United States were to experience a prolonged period of chaos, it could lose its status as a global superpower. China and Russia might seize the opportunity to increase their influence, depicting America as a nation in decline. Western allies could reduce their dependence, thereby accelerating the fragmentation of the Western bloc.

In conclusion, if Trump were to cut welfare during a recession with high inflation, the risk of social collapse and a crisis to the world order would become significant. This could be the biggest test of American democracy since the Civil War in the 1800s.

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