Inside President Trump’s Economy
Bottom Line: Last week, to the surprise of many (including the entire “expert” class) - for the second month out of three, the U.S. Treasury ran a budget surplus. A combination of tariffs and strong economic activity has delivered results far exceeding economists' expectations. The outperformance also lends credibility to the Trump team and GOP’s argument that strong economic growth will lead to lower overall budget deficits going forward than what’s been projected by the Congressional Budget Office and many economists. Here’s a look at what was reported for the second quarter by the Treasury Department – the first full quarter of the current Trump administration, and all after the implementation of the Liberation Day tariffs – which kicked in on April 2nd.
Year-over-year changes:
- Total Treasury Department receipts (revenue): +12%
- Total Deficit: $208 billion for the 2nd quarter in 2024 vs. $31 billion for 2025 – or $177 billion less year-over-year
It’s hard to overstate the significance of the 2nd quarter Treasury report. As large as the U.S. economy is, it’s almost unheard and implausible to see double-digit growth in revenues year-over-year – especially without a historic catalyst a la pandemic lockdowns of five years ago, yet that’s what we saw. This will almost certainly result in second quarter economic growth coming in much higher than economists' expectations when reported on July 30th. This data also suggests the CBO estimate for the impact of the One Big Beautiful Act on debt, and deficits, may have been overestimated as well.
The early returns on President Trump’s economic policies in his second term are evidenced to have had a far more positive impact on the federal government’s bottom line than previously anticipated. This likely means that the average American will fare better than had been anticipated by economists as well.