$29 trillion problem nobody is talking about in Trump’s America
America likes to think it’s the greatest nation on Earth, but its problems are mounting. There’s one thing Trump can do to save it.
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It couldn’t have been a more hectic start of the year for the US — a nation that appears to have a longer list of problems than Jay Z as it prepares for four more years of Donald Trump.
Apocalyptic images of Los Angeles on fire follow on from a crazy December which saw one of the nation’s worst-ever suspected terrorist attacks, a Cybertruck exploding outside of a Trump hotel, a healthcare CEO allegedly executed in public and the president-elect being sentenced for paying off a porn star.
You really couldn’t make this stuff up and it paints a picture of utter chaos as the US hurtles into 2025.
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All this is added to a long list of insidious problems facing the country of 335 million people — which often loudly proclaims itself the greatest nation on earth.
They include, but are not limited to, an economic crisis that is crippling everyday Americans, extreme political polarisation, massive healthcare issues, a gun violence and substance abuse epidemic, immigration and racial issues, climate change and foreign policy issues.
It’s safe to say that Mr Trump has his work cut out for him as he steps into the biggest job in the world for the second time.
But one expert claims he only has to do one thing to pull the US out of many of its major crises.
Let’s take a closer look at what Mr Trump and everyday Americans have to grapple with.
Americans suffering
Any Aussie who has visited the US will have seen first-hand how big the inequality problems facing Americans are.
While the US stock market is at an all-time high and the nation is home to the world’s most powerful corporations, cities — particularly across the west coast of the nation — are plagued by thousands of homeless people roaming the streets and living in tents.
Meanwhile even fairly well paid working Americans are struggling to pay for groceries as they face high inflation and interest rates.
Mr Trump swept into office off the back of the anger those Americans have felt over the past four years of the Biden administration and its inability to deal with these issues.
He posed a simple question at every one of his rallies, asking: “Are you better off now than you were two years ago?”
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Judging by the election results and the exit poll, Americans are not feeling that flush at all.
Richard Holden, a professor of economics at UNSW, told news.com.au he believes this was the biggest issue in the minds of Americans when they rejected four more years of Democrats.
He said the US is “in a bad place” when it comes to social cohesion and poverty — but that the economy is actually looking pretty good at the moment.
“Economic growth is quite high, productivity is quite high, unemployment is very low, wages growth is high, and it’s the best performing economy in the world by a wide margin,” he said. “There are things to be hopeful about.”
Many Americans won’t feel this way at the moment as they continue to cop high prices for everyday goods.
Prof Holden said that prices increased 20 per cent over Joe Biden’s term, but that they have now stabilised.
“Inflation is now very much under control, thanks to what the Federal Reserve (the central bank of the US) have done with interest rates,” he said.
“The smoothing out of supply chains and nobody spending $1.9 trillion on this and that as Biden did when he took office, also helps.
“So I think in terms of that, a new administration kind of gets a reset which is, prices are under control as of now.”
He said that while Mr Biden got punished for rising prices, he doesn’t think Mr Trump really has to do anything about the issue at all.
“You know, prices are not going to go down, right? They’re not going to go back down to where they were,” Prof Holden said. “Whatever a carton of eggs costs now, it’s not going to get 20 per cent cheaper or 30 per cent cheaper, but it’s stabilised. So I think on that cost of living stuff, you know, he doesn’t really need to do anything.”
‘The problem is poverty’
Despite some respite in the cost of living and rising wages, the problem of poverty and rampant homelessness will not go away, Prof Holden believes.
“People are working for a minimum wage of $11 an hour,” he said. “That’s the problem. It’s not inequality, it’s poverty.
“And I don’t think Trump has any desire or any intention to do anything about that. He certainly didn’t do anything really in his first term.
“What defenders of him would say is that he created a very hot labour market that led to very low unemployment and rising wages. And he’ll probably try and do the same again, run the economy very hot, although that’s kind of what’s going on at the moment.
“You’ve got 4.1 per cent unemployment, wages are going up. That’s what happened for a real chunk of the Biden presidency.
“So I think Trump will just sort of keep doing what he did in his first term, and to be honest, what’s continued to a large degree during the Biden administration, and that helps, you know, wages going up helps.
“There has actually been a more of an increase in real wages at the bottom of the wages at the bottom of the income distribution over the last few years, and that’ll probably continue on.”
As for the tent cities springing up in US cities, Prof Holden is a little more cynical.
“When it comes to some of the extreme poverty stuff — and the homelessness in San Francisco is a good example — I’m pretty sure what Trump will do is blame the Democratic mayor of San Francisco and Governor of California.”
$29 trillion problem nobody’s talking about
One of the biggest problems facing the US right now is its fiscal position — meaning the debt and spending of the government, according to Prof Holden.
“Trump is quite committed to extending the large scale company tax cuts and potentially even doing some more income tax cuts,” he said. “America’s fiscal position is already bad and running very, very large budget deficits as a per centage of GDP and government debt that’s running about 100 per cent of GDP.”
In layman’s terms this means that the total amount of money the government owes is equal to the value of all goods and services the country produces in a year (its GDP).
The US’ GDP is $29 trillion, so with a government debt of 100 per cent of GDP, this means the government owes $29 trillion.
“Trump is likely going to make the fiscal position worse, and that’s just going to create a very, very large problem to fix,” Prof Holden said.
The biggest threats to the US
There is a long list of problems facing the US right now that could boil over again at any point over the next fours years.
Immigration has been a huge issue, with debates over border security, asylum policies, and pathways to citizenship for undocumented immigrants taking centre stage again during the campaign trail.
Since President Biden took office in January 2021, there have been over 7.2 million migrant encounters at the US-Mexico border and 1.5 million “gotaways”— individuals detected but not apprehended by authorities.
This has led to tensions in communities that have been inundated with migrants and Mr Trump has vowed to tackle the issue head-on.
He plans to launch a mass deportation operation targeting millions of immigrants living in the US illegally and with temporary protections.
There were roughly 11 million immigrants in the US illegally or with a temporary status at the start of 2022, a figure that some analysts say has increased to 13-14 million.
The incoming administration is planning a large-scale immigration raid in Chicago on Tuesday, a day after Trump is inaugurated.
Sources told the Wall St Journal the raid will last a full week — and that US Immigration and Customs Enforcement will send between 100 and 200 officers to carry out the operation.
Healthcare
Another issue that has soared into public consciousness in recent weeks is healthcare, following the alleged murder of United Healthcare chief executive Brian Thompson — and the ugly debate that followed.
Many Americans still lack access to affordable healthcare despite reforms like the Affordable Care Act (ACA), while insurance companies rake in billions of dollars in profit.
Mr Trump has outlined a number of healthcare initiatives for his second term, focusing on deregulation, increased flexibility, and consumer choice.
He has also promised to roll back the ACA, commonly known as “Obamacare,” and introduce alternative ideas aimed at reducing costs and expanding access — although he has been, as yet, unclear on the specifics of his plan.
Gun violence
The number of mass shootings in America is an issue that often baffles those living outside of the US, but there are finally signs of the problem being brought under control.
In 2024, the United States experienced a notable decline in mass shootings compared to previous years. According to the Gun Violence Archive, there were 491 mass shootings as of December 18, 2024, marking the fewest in five years.
That’s still a high figure though and the total number of gun deaths, excluding suicides, was 18,854 in 2023 — roughly the population of Broken Hill, NSW.
That figure is also on the downward trend, marking the lowest total since 2019.
Stronger firearm regulations, crackdowns on untraceable “ghost guns,” and increased federal funding for violence prevention are thought to be a key driver in the reduction.
Drug overdose epidemic
Another heartbreaking problem that has plagued the US for several years is the number of drug overdoses.
In 2022, the United States reported 81,806 opioid-involved overdose deaths, marking a significant increase from previous years.
However, this figure appears to be starting to drop. It appears increased access to treatment, increased public awareness, wider distribution of naloxone — a drug that can temporarily reverse an opioid overdose — and a crackdown on the distribution of synthetic opioids like fentanyl are starting to take effect.
Racism and climate change
The issue of racism in the US has never really gone away, but it has not been at the front and centre of the news cycle since 2020 when the nation erupted over the death of George Floyd.
Despite accusations of being a polarising figure, Mr Trump made huge inroads among non-white voters. In the November election he saw a massive increase in the number of Black, Latino and Asian supporters compared to the 2020 election.
Another polarising issue in the US is climate change — particularly in the wake of the Los Angeles wildfires, which hit in the middle of winter.
Even on this issue though, much of the commentary has shifted to what could have been done at a state and local level to prevent the fires rather than the effects of climate change.
Mr Trump doesn’t seem fazed by the problem. He has vowed to “drill, baby, drill” and “frack, frack, frack” to increase fossil fuel production, in a message that appears to have resonated with voters.
The biggest threat to the US
All these major problems aside, Prof Holden believes the biggest threat facing America right now actually lies beyond its borders.
The world seemed to erupt with conflict in 2024 and the US faces challenges maintaining its influence amid shifting global power dynamics, including tensions with China and Russia.
Prof Holden said the issue of Russia in particular is “very dangerous for America”.
“Trump could, could empower Putin by throwing the Ukraine basically to the walls, turning off the weapons and forcing them to take a bad deal, which would validate and empower Vladimir Putin for a war that he started,” he warned.
“I think there’s every chance that Trump abandons NATO, which would be a disaster for Western Europe and the world and there’s every chance that he ends up empowering China to make a move on Taiwan.”
The second issue that worries Prof Holden most is climate change.
“There’s the abandoning of any semblance of action on climate change,” he said. “Exiting the Paris Agreement is a kind of symbolically bad thing, but it’s just symbolic.
“But reversing a bunch of the green energy initiatives and then at the same time empowering fossil fuel companies would be a very, very bad thing. And I think that’s really on the cards. So I think it’s those sorts of things that I really worry about for America.”
However, there is a common theme running through many of the major issues facing the US today — that they are slowly getting better and probably don’t need any major additional action to remedy.
Maybe the best advice for Mr Trump is that he should probably, in the words of an Aussie, do heaps less, hey.
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