The Daily Signal - Victor Davis Hanson: Energy, Tax Cuts, and Deregulation Could Supercharge 2026’s Economy

Episode Date: January 7, 2026

Economic booms are usually defined by  “greater productivity,” increased foreign investment, “reasonable” interest rates, “energy production,” and “plentiful deregulation and tax cuts.” But will any of this happen in 2026? Hanson predicts we’ll “see an economic bonanza” in 2026 as “there's going to be more oil,”  “ new technologies,” and “all sorts of tax cuts” and “more deregulation than we've ever seen” in the Big Beautiful Bill on today’s episode of “Victor Davis Hanson: In a Few Words.”  “ Add it all up: We've had an unexpectedly—unexpectedly, unexpectedly—good third quarter. I imagine the fourth quarter might be just as good if it were not for the government shutdown—the longest in history—that occurred in the fourth quarter, but we'll see.  But more importantly: more foreign investment, more tax cuts, more deregulation, more energy development, lower interest, and I think you're gonna see an economic bonanza.” 00:00 Introduction: What Makes an Economy Boom? 00:34 Unexpected Economic Trends 01:18 Analyzing Trump’s Third Quarter Growth 02:56 Future Economic Predictions for 2026 04:43 Conclusion: Preparing for the Unexpected 👉 The Daily Signal cannot continue to tell stories, like this one, without the support of our viewers: http://dailysignal.com/donate 👉Don’t miss out on Victor’s latest short videos by subscribing to The Daily Signal today. You’ll be notified every time a new piece of content drops: ⁠https://www.youtube.com/dailysignal?sub_confirmation=1⁠  Also on Spotify: https://megaphone.link/THEDAILYSIGNAL9753340027  👉Want more VDH? Watch Victor’s weekly, hour-long podcast, “Victor Davis Hanson: In His Own Words,” now! Subscribe to his YouTube channel, and enable notifications:  https://www.youtube.com/@victordavishanson7273?sub_confirmation=1 👉More exclusive content is available on Victor’s website: https://victorhanson.com Learn more about your ad choices. Visit megaphone.fm/adchoices

What makes an economy boom? The economists will usually say it booms if there is greater productivity, if there's more foreign investment, if interest rates are reasonable and down a little bit, if there is plentiful deregulation, tax cuts, and energy production. Let's ask ourselves if any of that might happen in 2026. Hello, this is Victor Davis Hansen for the Daily Signal. Have you noticed this use of the adverb unexpectedly. It's all over the Wall Street Journal.

It's all over the financial sites. It's all over the popular culture and the media culture. It's never used in association with Democrats. Usually they tell us things are going rosy, and then when they're not rosy, they just leave it blank. But with Trump, we were told, remember repeatedly that the trade war, so-called trade war, would sink the economy, that terrorists would ruin prosperity. We would be in a recession by now.

The stock market was going to collapse, that interest rates would have to go again and again. And now all of a sudden, in the last few days, we see unexpectedly third quarter growth of the economy was 4.2, 4.3. That's a booming economy in the third quarter. That was unexpectedly a new development. We were told inflation would probably be hyperinflation because of the trade. And what do we find out in the third quarter? It was about 2.7. And some months it was three, some months, 2.4, but 2.7, 2.8. That was pretty good, especially given Joe Biden's average over four years of 5.2 every year. And then there was the unemployment. We were told there's a new high jobless rate. But what was funny about it is the unemployment rate for the third quarter was about 4.3. That's pretty good.

The old days, anything below 5 was good. But more importantly, when you look at the job, that were created and the jobs that were lost, the jobs that were lost mostly went to people who here illegally and are part of the two million who left, whether voluntarily or not, and the jobs that were created were, for the most part, U.S. citizens. So what am I getting at? It's a very positive message in the economy, and the Trump administration really has to hammer that home, both in comparison with the Biden years, but also in anticipation of what's going to happen in 2006, because you just

have to ask yourself, what makes an economy boom? And the economy, the economists will usually say it booms if there is greater productivity, if there's more foreign investment, if interest rates are reasonable, down a little bit, if there is plentible deregulation, tax cuts,

and energy production. Let's ask ourselves of any of that might happen in 2006. Foreign investment? Probably $10 trillion. That's half of what Trump thinks is $20 trillion, but that's a lot, a lot. $10 trillion into the U.S. economy expected in 2006? We're pumping almost 14 million barrels a day. Most administrations would say, well, let's slow it down when it's a finite resource,

more pump oil is out of the ground than it. Not this administration. They want to go up to 15, 16 million barrels. So there's going to be more oil next year and cheaper prices than this year. How about the big beautiful bill? It's got all sorts of tax cuts. A lot of tax cuts. And it's got more deregulation than we've ever seen.

More deregulation, more tax cuts next year. I haven't seen that before. How about new technologies? People are talking. Truth Social itself has been merged with a new. nuclear fusion, huge conglomerate. Fusion is not just theoretical. It's on the agenda for next year, along with huge AI plant. So all these new technologies are going to kick in an interest rate. Does anybody believe that interest rates when Jerome Powell's tenure is over are going to increase?

No, they're going to go down. So what am I saying? Add it all up. We've had an unexpectedly, unexpectedly, unexpectedly good third quarter. I imagine the fourth quarter might be just as good if it were not for the government shutdown, the longest in history that occurred in the fourth quarter. But we'll see. But more importantly, more foreign investment, more tax cuts, more deregulation, more energy development, lower interest. And I think you're going to see an economic bonanza with one caveat, be prepared for unexpectedly. Thank you very much. This is Victor Davis-Hansson for The Daily Signal.

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