New York Times essayist Thomas B. Edsall explains “Why the ‘Affordability Hoax’ Is a Trap for Trump,” and writes; “For President Trump, the affordability crisis is a “hoax” perpetuated by Democrats. For the customer checking out at Costco or Walmart, it’s a rising grocery bill threatening already fragile household finances…I originally set out to try to put a dollar figure on how much the median family has lost this year as a result of Trump’s tax and spending policies, his tariffs and immigration restrictions and their effects on growth, inflation, wages, taxes and wealth…This is no easy task, with multiple variables in play, each of which can worsen or lessen the cumulative effects…Nonetheless, when I put it all together for the median household, I came up with an estimated net loss of $2,250 in 2025 spending power…The median household income after taxes was $72,330 in 2024, according to the census. The $2,250 amounts to a 3.1 percent loss in spending power, more than enough to persuade quite a few voters that the economy under Trump has gone sour, an assessment confirmed by poll after poll. This disenchantment has begun to spread to Trump’s own voters…To reach this estimate, I combined the calculations of the costs and benefits of major Trump policies by the Yale Budget Lab; the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution; the Federal Reserve; the American Enterprise Institute; and the Penn Wharton Budget Model. I also contacted economists and public policy experts from these and other institutions.”

Edsall continues, “As I dug into the research, something far more important than the specific dollar estimate of an average family’s loss emerged: Trump’s economic policies have put the nation on a long-term path of decline, in terms of gross domestic product, employment, capital investment and wage growth…Jonathan Haskel, a professor of economics at Imperial College Business School in London, and Matthew J. Slaughter, a professor at Dartmouth’s Tuck School of Business, drew similar conclusions in their Foreign Affairs article “America’s Brexit Phase: Trump’s Tariffs and the Price of Economic Uncertainty,” which appeared in June:

Unless Washington changes course fast, the United States will suffer many of the same consequences that the United Kingdom did in the aftermath of Brexit. If Washington continues to embrace “strategic uncertainty,” the United States, too, will likely face years of stagnating investment, sluggish growth in its economic output, and flat or even falling standards of living.

The biggest lesson of Brexit, Haskel and Slaughter concluded, “is that policy uncertainty can chill business investment, growth in productivity, and incomes — quickly, lastingly, and painfully. The supporters of Trump’s ‘strategic uncertainty’ approach have been forewarned.”

Edsall adds, “The Yale Budget Lab calculated the combined financial costs and benefits of two signature Trump policies, the One Big Beautiful Bill Act on taxes and spending and his substantial tariff increases. It found that the net effect of the tax cuts with the higher costs from tariffs leaves a family in the middle of the income distribution roughly $480 poorer…Those with incomes in the bottom three deciles lose the most — $2,160, $1,320 and $1,060 — according to the Yale Budget Lab’s calculations — while those in the top three deciles are the only winners, at $170, $830 and $9,670…That’s just for starters. The lab’s analysis pointed to adverse impacts on economic growth and employment:

Tariffs slow real gross domestic product growth by 0.5 percentage points in 2025 and 0.4 percentage points 2026. In the long run, the U.S. economy is persistently 0.3 percent smaller, the equivalent of $90 billion annually in 2024 dollars.

The unemployment rate rises 0.3 percentage points by the end of 2025 and by 0.6 percentage points by the end of 2026. Payroll employment is about 460,000 lower by the end of 2025.

On the plus side, the Yale Budget Lab calculated that as a result of the tariffs, “U.S. manufacturing output expands by 2.9 percent,” but it cautioned that “these gains are more than crowded out by other sectors: construction output contracts by 4.1 percent and agriculture declines by 1.4 percent.”

Edsall concludes, “As 2025 comes to a close, the damage the models predict is starting to become reality…Last Thursday, for example, The Wall Street Journal reported in “This Year’s Layoff Tally Nears 1.2 Million, Highest Since Pandemic” that from “January through November, firms have laid out plans to cut 1.17 million posts. That’s the highest year-to-date level since 2020.”…Equally foreboding, Paul Krugman, in “MAGA’s Affordability Crisis Will Soon Get Worse,” which was published last week on his Substack, cited the looming prospect of a sharp rise in fees for health coverage under the Affordable Care Act…Without congressional action, which appears very unlikely at the moment, Krugman presented data showing that premiums for those with coverage in Florida under the Affordable Care Act, to give one example, would more than double, to $2,200 from $899 a month for a married couple 40 years old and earning $130,000 with two children. For a 64-year-old couple making $90,000, monthly premiums would rise to $3,176 from $637, or to $38,112 from $7,644 a year…These developments have prompted growing numbers of elected Republicans, along with White House aides and advisers, to pressure Trump to recognize and acknowledge publicly Americans’ deepening concerns over jobs, inflation and affordability…For Trump to accede to these pressures would, however, require him to admit that his grandiose claims about how his policies would produce a bountiful explosion of prosperity were wrong…He is not going to do that.”