Like many Americans, I woke up after election day to see the outcome of one of the loudest campaign seasons I’ve experienced in years, if not decades.

The 2024 election was a high-stakes event. Yeah, yeah, I know…we seem to hear that every election lately.

“This is the most important election in our lifetime.”

It gets tiring. But in this case, I believe it was true because of our country's economic state and the underlying fundamentals that will steer its future direction. With soaring inflation, stagnant wages, and consumer confidence near all-time lows, most Americans today are struggling financially and desperately looking for solutions.

Reversing course and improving our economy is viable but it will require aggressive fiscal policies. Fortunately, many now understand these changes are necessary to put our fiscal house back in order, so our elected officials have more public support to do what needs to be done. Unfortunately, these changes will take time to implement and even longer to produce the desired results. We need to be ready for the long and hard path ahead of us.

The first step is to reduce government spending, which President Trump said he intends to do. But if we want to succeed at turning the country around, we have to be objective and admit that he said that before yet still created the most significant increase in our national debt in history.

So if we’re serious about this, we need to be vocal and hold him accountable to ensure he follows through on actually reducing government spending instead of just talking about it. Now that the Republicans hold the House and Senate, this is all very achievable as long as it’s clear that’s what citizens are demanding.

On that note—it’s worth pointing out that debt has become a hot topic lately, especially in light of the Harris campaign’s finances, highlighting how irresponsible government officials are when it comes to spending. To put this in perspective, her campaign raised over 1 billion dollars and ended up with over 20 million dollars in debt by the end of the election. That is not from tax dollars, but it is a very recent example we all can relate to.

Unfortunately, as absurd as that number is, it’s just a drop in the bucket compared to the debt our government has racked up. Right now, it is rising by roughly $1 trillion every 100 days and stands at nearly $35.94 trillion. The only way to save our economy is to reduce this significantly. 

Over time, in addition to freeing up currently wasted tax dollars, that will also help to reduce inflation, which is currently eating away at the budgets of most Americans today. The bad news is that inflation, which politicians and most of the media first claimed didn’t exist, then claimed was transitory, is actually here to stay for the foreseeable future.

Some things can be done to reduce inflation more quickly, but frankly, we don’t have the will to follow through because it means raising interest rates dramatically. That, unfortunately puts a clamp on growth because all but the largest companies and wealthiest individuals have to cut back dramatically.

Instead, the Trump administration will focus on stimulating real economic growth through deregulation and tax incentives. This allows our economy to continue growing while taking active measures to reduce inflation.

I’ve covered inflation a lot lately because it has such a significant impact on our economy. It’s at a level we haven’t seen in decades, which is troubling. Reversing this problem will take years, if not decades.

But this is dependent on growth.

Fortunately, it looks like we will have that, because since the election, EU chief Ursula von der Leyen, said she proposed that the United States could supply more liquefied natural gas to replace Russian energy, which would generate a tremendous amount of revenue.

I see this as just the first of many economic boosts we’ll see to our economy because I believe other countries will follow suit, and there will probably be a snowball effect. Once this starts happening, I expect to see rapid growth and prosperity for many as that money works through the economy.

But wage increases must follow because Americans are already stretched too thin. Without them, consumers will be forced to continue cutting back, which, unsurprisingly, kills growth.

The tariffs he’s proposing could also have a detrimental impact on growth. They increase the cost of products because the seller will just increase prices to offset the tariff. This causes the price of everything to go up, aka inflation. On the other hand, it could also help bring manufacturing back to the U.S., which stimulates domestic growth, assuming we have cheap energy and can meet the workforce recruiting challenges. Anyone familiar with the business community knows how severe the latter is.

The solution here is to talk to business leaders and implement the policies they need in order to drive the economy forward. Rather than implementing new laws though, this will be achieved more by eliminating costly and burdensome regulations, which he has already expressed a commitment to.

The thing we all have to keep in mind is that there’s a lag effect, and often, it’s pretty significant. That’s important to remember in two years when we get to the midterm elections. We have to realize that turning an economy around is a lot like turning a battleship around. It takes a lot of planning and time if you don't want to tip it over.

We’re already starting to see signs of positive changes, though. The stock market soared by over 1,200 points the morning after the election and continued climbing over the next several days. The value of the U.S. dollar grew by 2%, and the EU is discussing purchasing more fuel from the U.S. So I think we will see continued optimism and growth, but my concern is that people may get too comfortable. What I mean by that is—to look at the behavior of people leading up to an economic downturn. What are they typically doing?

Well, usually, our economy is really strong right before a big crash. Unfortunately, people often get to a point where they think things will just keep getting better and better, so they get a little too loose with their spending. They’ll probably start racking up debt too, because, “Hey, why not? I’ll just make more money later.”

Then, the bottom falls out, and the economy slows down. Maybe you even lose your job. But imagine if you found a job that paid a little more just a few weeks later…how would you feel?

Probably elated. And you’d probably feel pretty proud of yourself too, after all—you landed a new job, making more money, and did it before your next bill was due. Most people would treat themselves. Maybe a nice dinner or a day at the spa, and if you’re anything like most Americans, you may even decide to splurge a bit, and before you know it, your expenses now match your new income again. Now, you’re in the same position as before, but with a larger financial commitment.

That’s where we are right now. The economy has already started to turn around, and people are understandably excited about it, but I’m urging everyone to slow down. Don’t start spending more—instead, start paying down debt and saving money. It’s going to take time to truly turn things around, and our economy may even take a few dips before it starts to develop a solid upward trajectory, so we all need to be cautiously optimistic.

All in all, I feel optimistic about the direction of our economy under the Trump administration.

Like any politician or any human, really, he has his flaws. If he can successfully execute on his campaign promises and not say things that cause people, companies, and nations to panic, I think we will see strong financial growth like we did through much of his first term. But we also have to make sound financial decisions. It’s a group effort that we all play a role in.

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Dr. David Phelps created Freedom Founders to help its members achieve the freedom they wanted in their lives by building the necessary financial foundation. He is a noted financial expert who is regularly cited by the media, and recently helped the FL Dept. of Education develop its new financial literacy curriculum.