What’s Ahead in 2025

I have no idea, the level of unpredictability and volatility is extremely high.  One positive I failed to mention in my review of 2024 was the job Milei has done in Argentina.  Using traditional conservative and free-market principles, he slashed the size of Argentina’s government and its spending, caused a dramatic reduction in inflation, restarted real growth and gave hope to Argentinians that a better and more stable future was possible.  This was not accomplished without pain in the short run.  The lesson is obvious for all countries with bloated national governments and spending.  Looking at you, Uncle Sam.  So one trend we may see is a reinvigoration of true small-government, free-market approaches in a number of developed countries.

But in the US Republicans love all the spending just as much as Democrats do and Trump is comfortable with debt.  My fear is that in the absence of a really substantial cut in the deficit interest rates and inflation will stay elevated and Trump will lose his current grace period quickly.  So I have a pessimistic outlook on the economy and financial picture for the US in 2025.  The stock markets are overvalued and will struggle to see gains this year.  If I were Trump I would focus on the border and on foreign issues to keep attention off the economic issues.  And there I think he can engineer quick progress.  I think he could at least get a ceasefire in Ukraine.  I believe he will aid Israel in eliminating the current government in Iran.  Watch out for Syria, those currently in charge are bad people.

I am hopeful that Trump, with Rubio taking the lead, could build a coalition of democratic, free market countries including most of Europe, Japan, South Korea, Taiwan, Australia, Canada and others.  Combined, these countries have the skills to rebuild military deterrence and create freer trade among themselves.  Korea and Japan for example do have shipbuilding capabilities that can help offset what China is doing.  Creating such an alliance could deter China’s wilder ambitions.

I think Musk will revitalize the US space program.  I strongly endorse doing everything we can to quickly see if Mars can be a place where large numbers of humans could live.  We need a refuge in case nutcases like those in Iran or North Korea do eventually cause a nuclear or biologic catastrophe on Earth.  2025 will be the year that artificial intelligence both shows some practical productivity benefits and also comes down to Earth as some of the hype evaporates.  Quantum computing will continue to progress and coupled with artificial intelligence may lead to fascinating new scientific discoveries.

In health care, cost increases will be painful, particularly to consumers.  And Congress will be unwilling to take the steps needed to reverse the cost issues.  More new and expensive cell, gene and biologic treatments will come onto market, adding to the cost pressures.  RFK, Jr’s attempts to make Americans more healthy will be largely fruitless.  His emphasis on better food, exercise and other healthy behaviors is entirely correct, but if you aren’t going to put hefty incentives and penalties in place, people won’t change.

What I hope for most, and think may happen, is a wider debunking of the climate hysteria and an end to the insane shift to expensive and unreliable renewable energy, which is also very environmentally unfriendly.  2025 is going to not be a hot year, the factors causing 2023 and 2024 to be warm are dissipating.  The pursuit of this whacko climate ideology has been extremely expensive, has already ruined the German economy and is wrecking the UK one.

None of what I write here is likely to occur.  Other events will be far more prominent.  But it is fun to speculate.