Copy of AFF Sentinel V21 #56-What Will 2025 Bring?
- Steve Dittmer
- Jul 22
- 4 min read
This Year Poses Old & New Questions
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 12/26/24
So, what will our customers have to spend on beef in the coming year? What will the general economy look like? How soon will the President-elect and a new Congress be able to improve things?
Some economists have been urging that Congress get working on the potential tax cuts right away, to get more actual spending money in people’s pockets as soon as possible. That seems like good advice because, despite the decent GDP numbers indicating the economy keeps moving forward, that could slow up pretty quickly if the federal government stops pumping money it has to borrow into the economy. And what could be a simple beginning, well could be made endlessly complicated by Congress’ inability to get things done and susceptibility to interests other than those of the taxpayers.
Instant steps to reduce costs for people are likely to be one of Trump’s major campaign promises and doable by executive order. We’re sure some of his first steps will be reversing Biden’s war on fossil fuels. Codifying those reversals into law can come later.
But fixing permit and lease problems will only fix psychology at first. Wells can’t be drilled overnight and oil found instantaneously. There are wells drilled but not finished that have been mothballed for lack of potential return under Biden. Oil and gas development will accelerate.
The U.S. drilling rig count has been dropping all through Biden’s term but now it should increase. The higher numbers for daily production that has happened in the last few years has happened in spite of Biden’s administration, not because of it. That production was a result of permitting and drilling under the Trump Administration. Now that process can begin again.
With fossil fuel supply and price baked into almost everything we produce and consume throughout the economy, that will be the biggest influence on the cost of living the most quickly. The question is, will gas and oil developers see higher volume as profitable as higher prices.
Other issues ripe for instant executive orders are the myriad illegal immigration issues that can be reversed by executive orders. That needs to dealt with permanently with legislation but that can be done a little later.
It needs to be done by most people’s reckoning but predicting how that will affect the economy is more complicated and more unpredictable because it hasn’t occurred before. Everyone expects the first moves will be deporting those who have committed crimes other than illegal entry first. There will be costs from locating and deporting them. Unknown is how we’ll handle those whose home country doesn’t want them back.
We vote for dumping them all on some deserted island in the Pacific. Look how well Australia turned out.
Sanctuary cities and states will soon find their policing activity from crime reduced, communities will incur fewer costs from damages, incarceration costs, etc. Some communities should lose federal funds over time that they have been receiving for housing, educating and providing medical care for illegals.
More problematic is the labor implications. We don’t know how many illegals have committed additional crimes who have also been in the workforce and will disappear with deportation. It is unlikely that that number is large enough to be a major economic problem.
More important are those illegals without work permission who have been in the labor force, most likely at smaller firms with fewer resources to detect them or who have looked the other way. No numbers are likely reliable but the government has been tracking “foreign-born workers” and the number has increased over a million in recent months. They increased to about 18 percent of the workforce in 2023 but they aren’t separately surveyed as how many are legally eligible to work, how many are temporary workers or students.
And that doesn’t count the people who are here illegally who will be spooked by the deportation activity and may self-deport to avoid trouble at unexpected times.
All of these implications are real but the cost to the economy and to the country’s security is more serious than the cost of accomplishing a realignment of the country’s situation, regardless of short-term disruption and costs.
Many thousands of military-age young men have entered our country with unknown intent. Thousand of criminals have entered, with definite criminal intent and criminal deeds on their subsequent record. The non-criminals, who have been taking the jobs of American citizens, are not entitled to protection from deportation like American citizens. That will have some labor implications but would likely have more impact in certain individual cases. Whether that will have significant impact for the country as a whole is questionable.
But again, we’ve never been through this situation on this scale before, hard numbers are illusive and we will have to look at the long-term effects and benefits vs. short-term problems.
In a future column, we will discuss the debt problems looming but the answer for a whole list of problems we face is economic growth -- growth is the only answer for the most pressing problems, like federal debt and individual debt.
Let’s hope Congress agrees and gets on the stick pronto.
By the way, speaking of beef demand, let’s see a show of hands of all of you who predicted the Choice-Select spread would top $30 multiple days in 2024…both of you…
Next time: more outside demand factors.
Our address: Agribusiness Freedom Foundation, P.O. Box 88179, Colorado Springs, CO. 80908.
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