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President Donald Trump is boasting about the economy one year into his term. He claims that inflation has been defeated, growth is unprecedented, incomes are rising, and his tariffs are generating hundreds of billions for the U.S. economy. This is all hogwash, according to progressive economist Gerald Epstein, a leading global authority on macroeconomic policy and finance.

In the exclusive interview for Truthout that follows, Epstein explains how, in reality, Trump’s policies have created an affordability crisis, and the growing deficit and humongous public debt are now bringing the country close to a tipping point.

C. J. Polychroniou: The state of the U.S. economy in Donald Trump’s first year of his second presidency has evolved in various ways. Trump, of course, has boasted on multiple occasions that the economy is “booming” and that the U.S. is the “hottest country anywhere in the world,” but there is plenty of data to suggest that the reality is quite different. There is apparently an affordability crisis and consumer confidence has dropped to its lowest point in 12 years. Help us make sense of what’s going on with the economy under Trump 2.0. What exactly is the affordability crisis all about and how has it evolved since Trump’s return to the White House?

Gerald Epstein: Typical of Trump, he is boasting about the performance of the U.S. economy in the most hyperbolic terms. He even declared that his economy is “the greatest ever in history” in a recent interview on Fox Business Network. He points to the stock market and allegedly low inflation to back his claim. Is that the true state of the U.S. economy?

Donald Trump routinely barks that he inherited a terrible economy from Joe Biden and that he has turned it around: Now we have fast economic growth, low inflation, low consumer goods prices, high stock prices, and his great economy is going to get so good that it will be the best the world has ever seen. But basic economic data demonstrate that Trump’s boasts are simply wrong.

Trump Uses State of the Union Address to Falsely Declare Economy Is “Roaring”

The best way to characterize the Trump economy compared to the economy the Biden administration left him, is this: Trump’s economy is mostly a continuation of Biden’s, but with a big tilt to the top, and with a big chance that it will soon run off the rails.

“Trump’s tariffs are not helping with the affordability crisis.”

“Trump’s tariffs are not helping with the affordability crisis.”

The overall inflation rate is about the same now (2.7 percent at the end of 2025) as it was when Biden left office (2.9 percent); the unemployment rate (4.3 percent in January 2026) is slightly higher than it was when Biden left office (4.1 percent). The rate of growth is similar, as well as the rate of growth of average real wages (wages minus inflation).

Some things are much worse, and these are directly connected to Trump administration policies and, ironically, run directly counter to Trump’s self-stated objectives. Trump’s tariffs have raised the cost of many U.S. goods, as well as the cost of food, and lowered the profits of medium-sized and small businesses, which, unlike big firms, have much less flexibility and fewer resources to adjust. Trump’s immigration dragnet has harmed economic activity in key sectors such as housing construction and services. Tax changes have greatly increased health care costs and pharmaceutical companies have raised prices on hundreds of medicines, all of which affect millions of people as these increased costs reduce their standards of living. And the trade deficit in goods has reached a new height.

Though first dissing “affordability” as a sham issue, Trump has now embraced it and tried to dominate it, claiming that he will get prices down across the board. But as numerous polls have shown, most people are not buying what Trump is selling. For example, a Wall Street Journal poll from September 2025 finds that the share of people who say they have a good........

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