- Gathering economic omens…
- Will the 2026 midterm elections be like the 1982 midterm elections?…
- The New York Times says “It can’t happen” — but can it?…
Dear Reader,
Mr. Michael Snyder — he of the eternally sunny Economic Collapse site — has issued his economic forecast.
And he sees heavy weather forming on the horizon. He fears the American consumer is in for a good soaking.
He cites 12 sources of low pressure. Here I cite the most ominous of them… in my telling at least:
- #1 According to the University of Michigan, consumer sentiment in the United States has fallen to the second-lowest reading ever recorded…
- #2 According to a new CNBC/SurveyMonkey poll, a whopping 73 percent of U.S. consumers admit that they are “financially stressed”…
- #3 Approximately two-thirds of U.S. adults feel like they are “behind on their savings goals”, and half of U.S. adults believe that they will never reach their savings goals at all…
- #4 More than 60 percent of U.S. adults that currently have savings accounts have taken money out of them since the start of this year…
- #5 The percentage of U.S. credit card accounts that are at least 90 days past due has reached the highest level in 12 years…
- #6 5 million student loan borrowers in the United States have not made a single payment in the last year, and 4 million other student loan borrowers will soon reach that status…
- #8 The average credit score in the United States just dropped at the fastest pace since the Great Recession…
- #9 U.S. consumers are eating out less, and as a result restaurant chains all over the country are in financial distress…
- #12 According to the Fed, U.S. consumers are becoming more concerned about inflation and unemployment…
Is Recession Already Here?
And so the billowing gray clouds gather.
Or are they already overhead? Is the United States economy already sunk in recession?
In a recent issue, Evening Vanguard contributor Jim Rickards argued the answer may indeed be yes.
And if the answer is no… Mr. Rickards believes the answer will likely rotate to yes before long.
He does not believe it is because of the president and the trade rumpus he has caused.
He believes rather that the president has inherited recessionary conditions from his predecessor.
The media will of course finger the sitting president. I hazard vast swathes of the voting public will likewise fault him.
I hazard further that the same voting public will express its displeasure in the 2026 midterm elections.
Here I recall the 1982 midterm congressional elections.
1982 and 2026: Is Past Prologue?
From 1981-82 the United States economy plummeted into severe recession — the severest since the Great Depression.
In the 1982 elections the Democratic Party seized 26 seats in the House of Representatives.
Thus Wikipedia informs us that:
- Democrats won the nationwide popular vote for the House of Representatives by a margin of 11.8 points and gained 26 seats, cementing their majority in that chamber…
- The Democratic election gains have been linked to President Ronald Reagan’s unpopularity as a result of the deepening 1982 recession, which many voters blamed on his economic policies.
- Prior to the elections, some observers predicted a poor performance for Republicans due to the difficult economic conditions. The Democrats’ gains put a check on Reagan’s policies, as the incoming Congress (particularly the House) was significantly less open to Reagan’s conservative policies.
Substitute Donald Trump for Ronald Reagan. Substitute 2026 for 1982.
You will likely read the identical article following 2026 — should the United States wallow in recession ahead of the election.
Will the United States wallow in recession ahead of the election?
As always, I do not know.
Yet recall the falling barometric pressure readings listed above.
I am tempted to ready my rain gear.
Yet what is this — do I observe silver edging enveloping gray storm clouds?
It’s the Economy, Stupid
I refer you once again to the mighty recession of 1981-82. The squalls were drenching.
Yet by 1983 the weather cleared… the sunlight came in… and the United States economy was up and going once again.
Before long it was up and away.
And Ronnie Reagan — the devil of the 1982 midterm elections — was the angel of the 1984 election.
Voters awarded him the greatest electoral rout in presidential history.
History cannot repeat of course. President Trump is ineligible to pursue a third term in 2028.
Or is he?
I referred to silver edgings. Yet it appears now that I was foxed and deceived by lighting conditions.
The silver edgings were very likely phantom. It is all gray.
That is because the United States debt-to-GDP ratio in 1982 ran to 29%.
The United States debt-to-GDP ratio in 2025 runs to 124%.
That is, the nation is loaded down with far more debt — relative to its economy — in 2025 than in 1982.
Thus its economy is far less capable of rapid expansion in 2025… or in 2028… than in 1982.
The heavy recessionary weather, should we be in for any, may break.
Yet rather than clearing skies accompanied by brisk, invigorating winds… the United States economy is likely in for extended overcast and periodic showers.
Extended overcast and periodic showers is not squalling rain, it is true.
The conditions are endurable.
Yet nor is extended overcast and periodic showers azure sky and sunshine.
Conditions are not ideal.
For the United States — as for all nations — its debt determines its weather.
Brian Maher
for Freedom Financial News
