Trump Will be the First Degrowth President

Just not on purpose.

In 2025 these undocumented migrants were working on a wall because they were the cheapest labor who would work for low pay in harsh conditions. They were rounded up by ICE and shipped away. They would later cross back into America very easily because there was no one to finish the wall and no legislation to keep them out. They will then be paid to dismantle the wall in 2029 because they will be the cheapest labor willing to work for low pay in harsh conditions. Republicans will still claim to be the party of capitalism, while not understanding how it works.

 Photo by Josue Isai Ramos Figueroa

The paper, Mass Deportation – Devastating Cost to America, Its Budget and Economy, from the American Immigration Council (AIC) was published in October and details the economic fallout from the mass deportation plan favored by President-elect, Donald Trump.

Using data from the American Community Survey (ACS) along with publicly available data about the current costs of immigration enforcement, the report tries to estimate what the fiscal and economic cost to the United States would be should the government deport a population of roughly 11 million people who as of 2022 lacked permanent legal status and faced the possibility of removal. The paper also considers the impact of deporting an additional 2.3 million people who have crossed the U.S. southern border without legal immigration status and were released by the Department of Homeland Security (DHS) from January 2023 through April 2024.

In total, the AIC arrives at a conservative estimate of about $315 billion for the cost of such an undertaking. That conservative estimate does not account for the long-term costs of a sustained mass deportation operation, or the cost to acquire the institutional capacity to remove over 13 million people in a short period. To understand the gravity of the undertaking, the entire U.S. prison and jail population in 2022 was 1.9 million people. Now multiply that by over 6, to catch, imprison, and eventually deport 11 million people, all in just a few years. It would have to be a few years, because there is little chance of a Republican House and Senate being popular enough to still be around after January 2027 when the mass deportation plan causes a massive recession. Those numbers are below.  

Less conservative numbers mentioned by the AIC in their report estimate the costs for mass deportations to reach nearly $1 trillion over ten years, shrinking America’s gross domestic product by at least 4.2 percent due to the loss of workers in industries already finding it hard to find workers.

The Penn Wharton Budget Center (PWBM) at the University of Pennsylvania ran the numbers and came to a similar conclusion. According to their findings:

“The costs of the former president's plan to deport the more than 14 million unauthorized immigrants in the U.S. today could easily reach more than $1 trillion over 10 years, before taking into account the labor costs necessary for such a project or the unforeseen consequences of reducing the labor supply by such drastic amounts over a short period.”

According to PWBM estimates, the removal of just one million immigrants would cost the federal government between $40 billion and $50 billion over 10 years, and up to $100 billion if those immigrants were higher-paid workers.

These undocumented workers pay taxes, which would not be collected, and use very few government services, so the net effect is a negative for the federal government even before you get to businesses not having enough workers, which would lead to – inflation.

Industries such as agriculture and construction, which highly depend on undocumented workers, would have to offer higher wages to find workers, which would be passed on to the consumer. About fourteen percent of workers in the construction industry are estimated to be undocumented migrants. Roughly Half of Hired Crop Farmworkers Lack Legal Immigration Status. The share of hired crop farmworkers who were not legally authorized to work in the United States grew from roughly 14 percent in 1989–91 to almost 55 percent in 1999–2001; in recent years it has declined to about 40 percent.

If you think the cost of eggs is high now, you haven’t seen anything yet.

Terrible Trump Tariffs

But wait, there’s more. Trump has proposed up to 100% tariffs on Chinese goods, and a tax of between 10% and 20% on every product imported from all U.S. trading partners.

Tariffs would end up raising prices for the average US consumer, since importers pay the tariff and then pass along the increased cost to the consumer.

If there is a tariff on a Chinese good or industry, no Chinese company pays the price. The American firm importing the goods pays the price, which is then passed along to the consumer. This may cause the importer to not trade with China, but they would still likely have to go somewhere else overseas to get what they need. They were importing from China in the first place because it was a good or service they could not get at home.

And tariffs are not a one-way street. If the US starts putting a tariff on everything, other countries will do the same thing in retaliation to level the playing field.

Trade is supposed to be a win-win deal, where one country supplies another with goods or services because they can either provide cheaper or higher quality goods or services.

Tariffs on everything make trade a zero-sum game in the short term and a global recession in the long term.

Trumpism as a bridge to degrowth? What?!

As I always do, I introduced the topic I was going to be writing about today with a little Environmental Apocalypse Stock Photo Theater, in which a snail engaged in a conversation with an orange with a toupée about how Trump's policies would lead to degrowth. I know, it does sound like high art, doesn’t it?

One of our readers rightly pointed out that what I was describing was a recession, not degrowth, and they were right. If the Trumponomics of tariffs and mass deportations lead to a GDP contraction of 4.2%, that would be a recession.

Doing so by design over the long term, or just focusing on building a well-being-based economy not worried about what GDP does, would be more in line with taking a degrowth path.

I want to revisit a table I put in a blog from back in April (Your Money or Your Life). Thanks again to Peter Victor, author of Escape From Overshoot, for providing the basis for the table, below. The table shows that for every 1% reduction in the rate of economic growth, there is about a 0.9% reduction in the rate of reduction in emissions intensity needed to address climate change. For example, a typical example of 2.0% GDP growth necessitates a 9.7% rate of reduction in emissions intensity each year from 2022 onward, to meet net zero by 2050 goals. Now that it is 2024, that rate is higher.

I asked Peter if GDP contracted, what numbers that would give us? I’ve filled in the table with what he told me (the top three rows are not in his book).

By that logic, a reduction in GDP by about 4.0% from Trump's policies would lead to only about a 4.0% rate of reduction needed in emissions.

Not only may Trump stumble into degrowth by causing a recession, but he may also trip into environmental stewardship through tariffs.

After four years of Trump, maybe America will be ready for a real conversation on degrowth. Or maybe even before that.

In reality, Trump's immigration and tariff talk may amount to mostly bluster, meant to appeal to voters who are promised easy solutions to complex problems. After all, is that beautiful wall at the Southern border completed yet?

Nope.

Raise your hand if you are surprised.

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I don’t see any hands.

But let me know what you think. To what extent do you think the deportations, or tariffs on everything will happen? I think it is all BS just to throw red meat to his base, and nothing much will happen on either front, but let me know what you think.