The End of Trump's Presidency and the Future of the US Dollar: Debunking Common Myths

The end of Donald Trump's presidency in 2021 is a significant milestone in American political history. However, the perception that the US dollar would lose its value following his departure from the White House is a common myth. This article will explore whether this belief has any basis in reality, drawing on economic research and government data to provide a comprehensive analysis.

Economic Myths vs. Reality: The Trump Presidency and the Dollar

The notion that the US dollar's value would collapse due to Trump's presidency overlooks crucial economic realities. Profligate government spending and inflated inflation are often linked, but the data does not support a direct cause-and-effect relationship. In fact, the Federal Deficit data from 2017 to 2023 shows a mixed picture:

YearFederal Deficit (billion USD) 2017665 2018779 2019984 20203132 20212775 20221376 20231694 20241847

While the federal deficit did spike in 2020 due to the economic stimulus measures, the subsequent years saw a significant reduction. This data does not align with the idea that the dollar's value would plummet due to increased government spending under Trump.

The Dollar's Performance Post-Trump

Contrary to popular belief, the dollar did not lose value after Trump's presidency ended. In fact, the dollar appreciated in value, particularly after his departure. This appreciation is attributed to a variety of factors, including:

Reduced geopolitical uncertainties associated with the change in administration. Improved business confidence due to a shift in economic policies. Raising interest rates by the Federal Reserve (Fed), which strengthens a currency's value.

Myth: Trump's Economic Policies Will Lead to the Dollar Losing Reserves

The idea that Trump's policies, such as tariffs and economic ignorance, would make the dollar a less desirable reserve currency is also a misconception. In fact, these policies would likely exacerbate inflation and disrupt supply chains, leading to a decline in the dollar's value. However, it's important to note that:

There is no single credible economist who believes Trump's policies would destroy the dollar's value. The Fed's decision to raise interest rates plays a crucial role in maintaining the dollar's strength. The US dollar's position as a reserve currency is primarily influenced by the Fed's interest rate policies and global economic conditions.

Conclusion: The Strong Dollar After Trump

The end of Donald Trump's presidency did not lead to a collapse in the US dollar's value. Instead, it marked the beginning of a period of relative stability and strength for the dollar. The factors contributing to this stability include:

The Fed's decision to raise interest rates, making the dollar more attractive to investors. The improved economic confidence following the transition in leadership. The reduction in geopolitical uncertainties associated with a new administration.

In conclusion, while there are always uncertainties and risks in the global economy, the myth of the US dollar losing its value after Trump's presidency largely remains just that—a myth. The evidence and data suggest that the dollar has and will continue to perform well under the current economic conditions.