Addressing Concern For the 2030s Economy

by Eugenio Alemán of Raymond James, 12/9/25

We have received several e-mails regarding a report written by a consultancy explaining the “causes of the 2030s great depression.” Since the number of e-mails regarding the same topic has been atypical outside of concerns about the “imminent collapse of the US dollar,” which we have addressed many times over the last several years, we thought it was important that we address this issue.

First of all, this consultancy is trying to sell their services, and the headline is “eye catching.” However, it does not mean that they have any insight or ability to forecast anything better than anybody else. Of course, they are using the 2030s to relate people to the Depression of the 1930s, but this does not mean that there is any similarity between these two periods.

Second, recessions are recurrent events but do not have an occurrence pattern. So no, there is nothing that points to a depression in the 2030s just because there was a depression in the 1930s. Could the world end during the 2030s? Sure. Can anybody predict its occurrence? No.

Recessions are less common today than they were before the 1980s. Some argue that the reason is that we have become better at conducting fiscal and monetary policy to reduce the ebbs and flows of economic cycles. Recessions are a necessary adjustment mechanism when sectors of the economy get out of whack, and recessions bring those sectors back into equilibrium. It is true, recessions have serious economic, social, and psychological consequences on individuals, and governments typically try to do what they can to try to reduce those consequences. With this out of the way, let’s take each one of this consultancy’s arguments and see what they may mean for the US economy going forward.

Demographics: Population growth continues to slow down, but AI is coming to the rescue by increasing productivity, so yes, population (i.e., labor force growth) is an issue, but why would that take us into an economic depression? By the way, they started on the wrong foot. Back in the 1930s, population growth was very high due to natural births as well as strong immigration flows. However, there was a depression in the 1930s, so it occurred even as population growth was strong.

Healthcare costs: Yes, healthcare costs are very high compared to income and are increasing above the rate of inflation. Yes, taxes will have to increase and/or we will have to collect more taxes, fix the healthcare system, reduce expenditures, etc. But why is this going to contribute to an economic depression? See our Debt white paper following this link. We guess that healthcare costs back in the 1930s were also very high compared to income, while government subsidies were nonexistent. Furthermore, fewer people were covered by health insurance.

Entitlements: Yes, entitlements are an issue, but we will probably have to fix those issues. It is the responsibility of our politicians to solve these problems and of voters to vote them out if they don’t. We understand that nobody trusts politicians, but, as Winston Churchill said, “You can always count on Americans to do the right thing – after they have tried everything else.”

Inflation: Inflation has been high since the end of the COVID pandemic. Yes, we spent too much, which created a fertile ground for higher inflation. However, as long as the Federal Reserve remains independent from the political process, inflation will continue to go down. If there is a depression, inflation will not be a problem.