Editor’s note: This is a lightly edited transcript of today’s video from Daily Signal Senior Contributor Victor Davis Hanson. Subscribe to our YouTube channel to see more of his videos.
Hello, this is Victor Davis Hanson for The Daily Signal. In this first six months of the Trump administration, we’ve entered unknown territory. I guess the best way to term it is there are a lot of known unknowns. We’re doing things we’ve never done before. And our experts think they can predict it, but they’ve been wrong.
Let’s take some examples. Usually, tariffs are not a source of revenue because traditional economic orthodoxy says that whatever revenue they generate, they decrease gross domestic product by inflicting attacks on goods. But yet, we don’t know what the profit margin is in these countries. And perhaps the tariffs are not resulting in rising prices. At least they haven’t in May and June.
Which suggests, again, that the Germans or the South Koreans or the Chinese were making so much money by exporting to the United States, while protecting their own industry and piling up surpluses, that they could pay tariffs and still remain in our market at a cost-competitive profit.
The result is that we’re getting $26 billion a month and higher. No one anticipated that. Scott Bessent, the treasury secretary, said, “In theory, the year could end with a third of a trillion dollars—$330 billion.” That’s almost 5% of our revenue is coming from tariffs, which we’d thought would be impossible.
Another impossibility is usually we’re running a $2 trillion debt. That’s what we were usually told by people. But in the month of May, there were more federal revenues than there were debits. And that was a result of the Department of Government Efficiency cuts and the tariffs and the seasonal increase in federal revenues that come through taxation and other charges against the private sector.
Everybody said, “Well, May’s always a good month. It’s the one good month of the year.” But we haven’t had a surplus since 2017 in any month, which is kind of strange if we’re going to run this huge $2 trillion budget deficit. And while we’re discussing it, more money is coming in than going out. And we have this known unknown about tariffs. Then something’s up. And that something’s up is amplified.
When we look at the foreign investment, we were told, $4 trillion, $6 trillion, $8 trillion. That’s a phenomenal number. Nobody has ever had $8 trillion of foreign investment in the United States in one year. The secretary of interior, Doug Burgum, says to us now that the actual income or amount or capital investment from foreign sources of various statuses could be $15 trillion. Economists have ratios for each billion dollars in foreign investment, depending on the nature of the foreign investment, the jobs created. If this were true, it’s a phenomenal number.
He also said something that was quite striking. That the value of U.S. assets that have been untapped—natural gas, coal, oil, timber, rare earth minerals—is somewhere between $100 trillion and $200 trillion.
Now, we don’t want to exploit and plunder our countryside, but it’s something to think about, that if we were not buying rare earth minerals from China—and we probably may not be—or we had a mechanism to tap our coal and use it cleanly to help generate the electricity for artificial intelligence.
This is unusual. This is crazy: $15 trillion of foreign investment, $200 trillion of unrealized assets. And remember that the $15 trillion is coming from people who were not willing to do that prior to President Donald Trump. They’re doing it in fear of tariffs.
There’s a couple of other things, and that is the military was short anywhere—depending on who you talked to—45,000 to 65,000 recruits. They could only get 50% of their benchmarks. A year ago, at this time, about 50%, only about half of the people were enlisting. But when they changed the ad campaigns, and they said they were no longer going to prejudice recruits for tenure promotion, enlistment, advancement, etc. by their race or gender, and they were going to stress battle efficacy, all of a sudden, recruitment soared.
Nobody thought you could do it in six months. But in less than six months, the military went from, “We’re short 50%. We don’t know what to do. Maybe it’s gangs. Maybe it’s tattoos. Maybe it’s drug use. Maybe it’s obesity. Maybe we’re competing—” to, “I don’t know what happened but all these people have enlisted.” And we all know what happened. They stress what the military is for in their ads and communications. And they got what they wanted.
And there’s one other final thing that’s inexplicable. We were letting in up to 10,000 illegal immigrants a day for over a four-year period. It’s controversial how many in total came. But it could be from 8 million to 12 million.
So when Donald Trump said he was going to offer a self-deportation, you get a thousand dollars, you get your way paid for, and you can apply for legal immigration at some future date—if you don’t do this, you’re disqualified for 10 years. And then the “Big, Beautiful Bill” will continue the wall. He put pressure on Mexico to enforce its own borders, to stop this trek northward.
We could go through all the things he has done. But we all thought that maybe he could reduce it from 10,000 to 2,000, maybe to 1,000. I thought maybe, “Wow. If he does all this, if he actually forces people and he creates a new deterrence, he might get only 500.” Some months, there’s nobody; 126 people I think it was in May. This is phenomenal.
There is no illegal immigration right now, as we speak. That frees the Border Patrol and the new agents that’ll come online and the new Big, Beautiful Bill to round up the 10 million, starting with the 500,000 criminals that former President Joe Biden let in.
Add it all up and the orthodoxy, the conventional wisdom about tariffs, about foreign investment, about our assets that are unrealized, about military recruitment, about illegal immigration, they’ve all gone with the wind. We’re in new territory. All the perceived wisdom is ignorance. And nobody knows what is what, except we’re in a very exciting period.
If $9 trillion represents the market capitalization of all of Silicon Valley, you can imagine what $10 trillion to $15 trillion would do to this country. It’s like bringing a new Silicon Valley—in total, one and a half of them—and plopping them down. And when you add in robotics and AI and the efficiency in government regulation, through these cuts and fast-tracking permits, we don’t know where we are, but we might be on the verge of an economic boom.
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