Federal Job Cuts and State-Local Fiscal Drag

Chuck Todd breaks down the latest political and global chaos as the government shutdown drags on with no resolution in sight—because, as he puts it, “nothing moves without Trump.” From Trump’s trade threats against China and his transactional diplomacy in the Middle East to Netanyahu’s political freefall in Israel, the episode examines how American and global politics are increasingly driven by short-term leverage over long-term stability. Todd also exposes how Trump’s team has weaponized government institutions—from Russ Vought’s reckless layoffs to Pam Bondi’s politicized DOJ—and how Trump’s online behavior, including an embarrassing Truth Social blunder, raises national security concerns. With the rule of law eroding and America’s moral authority slipping away, Chuck warns that the U.S. may be entering an era where power, not principle, defines governance.

Then, Moody’s chief economist Mark Zandi joins Chuck to assess an economy that looks strong on paper—but feels weak for most Americans. While the top third of earners are doing well, lower-income households are tightening their belts as consumer spending slows and job creation stagnates. Zandi warns of a 30–40% chance of a recession by 2026, citing the drag from federal job cuts, the drying up of COVID relief funds, and the destabilizing effects of rising tariffs and electricity costs.

They also dig into the booming—but risky—AI sector, where soaring valuations and limited job growth may be setting up the next market correction. Gold prices are surging, commercial real estate is slumping, and housing shortages are widening for middle-class renters. With Americans increasingly unable to move for better opportunities and faith in Washington deteriorating, Zandi and Todd explore whether the U.S. economy can remain the world’s “safe haven” — or if 2026 could be the year that confidence finally cracks.

Finally, Chuck goes back to the 1987 market crash in the ToddCast Time Machine to compare the conditions then to current market conditions, answers listeners’ questions in the “Ask Chuck” segment, and gives his college football update.

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Timeline:

(Timestamps may vary based on advertisements)

00:00 Chuck Todd’s introduction - New addition to the Todd household

03:45 Trump/China threaten trade retaliation, just posturing?

04:45 Government remains shutdown, no resolution without Trump

06:00 Trump sensitive to tariff price hikes on pharmaceuticals 

07:00 Trump’s transactional diplomacy works well in the middle east

09:15 Can Netanyahu survive politically without an active war?

10:15 2/3rds of Israeli voters want Netanyahu to resign

11:15 Many of Israel’s threats are gone, but is now very isolated

12:45 Trump’s government has weaponized/politicized everything

14:00 Russ Vought’s mass layoffs were sloppy, overfired at CDC

16:00 Pam Bondi has overtly weaponized the Justice Department

18:15 DOJ indicting Trump enemies he named in social media post

19:45 Trump was DMing Bondi on Truth Social, mistakenly posted publicly

21:30 Trump’s communications far more insecure than Hilary’s emails

24:15 The current Republican congress just rolls over for Trump

25:15 Trump is destroying the rule of law & reputation of the GOP

26:30 If roles were reversed Republicans would be apoplectic

27:45 US has lost moral authority & credibility on the world stage

29:15 Most military leaders would resign quietly if given illegal orders

30:45 Presidents used to respect their predecessors… not Trump

31:45 Trump’s supposed to govern for the entire country, refuses to

34:15 Trump believes two wrongs make a right

35:15 Trump started a trade war with China, and nobody wins a trade war

36:45 United States is far too reliant on China for rare earth metals

40:00 Mark Zandi joins the Chuck ToddCast 

41:00 The economy is only good for the top 1/3rd of earners 

42:00 Lower income earners are struggling 

43:30 Signs of a consumer pullback are starting to show up 

45:00 The economy isn't creating many jobs 

45:30 Chance of a recession is forecast at 30-40% in 2026 

47:15 The economic impact of the cuts to federal workforce 

49:00 Loss of 100k+ federal jobs will be a drag on the economy 

50:00 Covid money is drying up in state and local government budgets 

50:30 AI is starting to have impact on the job force 

53:00 Data center investment creates wealth but not jobs 

54:30 Are the AI stocks creating a bubble? 

55:30 Investors may be a bit over their skis with AI 

56:45 Stock market could be headed for a massive correction 

58:00 Stock price to earnings ratios are at historic high 

59:30 Tariff impacts starting to show up, AI providing a tailwind for economy 

1:01:00 Economy is very vulnerable to unforeseen shocks 

1:01:45 Price of gold at all time high, a warning sign? 

1:03:30 Uncertainty around American economy driving up gold price 

1:04:45 Risk of American economy not being considered a "Safe Haven" 

1:06:00 Loss of safe haven status means higher interest rates 

1:06:30 Impact of rising electricity prices on the economy 

1:08:30 Oil and gas prices have stayed relatively low 

1:09:30 Why haven't investors flocked to real estate as an investment? 

1:10:30 The price of commercial real estate is down substantially 

1:11:45 High interest rates have cooled demand for residential real estate 

1:13:15 The high end rental market is oversupplied 

1:14:00 Workforce/middle income housing is in short supply 

1:15:30 Housing issues vary by city and region, hard to address nationally 

1:16:45 How much would the economy benefit from domestic migration? 

1:18:30 Aging population a big factor in lack of domestic migration 

1:19:00 Most Americans can't afford to move 

1:20:15 Impact of America's broken politics on the economy 

1:22:00 Will issues with China's economy affect the globe? 

1:23:00 Level of risk going into 2026?

1:24:30 ToddCast Time Machine 

1:25:15 October 19th, 1987 - U.S. stock market crash 

1:26:00 Crash resulted in added financial regulation and safeguards 

1:27:45 In week leading up to crash, markets had seen sharp declines 

1:28:15 Computerized trades contributed to crashed 

1:29:45 Crash wasn't rooted in one singular event/issue 

1:30:45 Crash didn't result in wider problems like banking crisis 

1:31:30 Lesson learned was "Don't Panic", market came back 

1:32:45 Current market is dominated by algorithmic trading, creates risks 

1:33:45 Market is highly concentrated in tech 

1:34:45 Why 1987 isn't a corollary for 2025 

1:36:45 Market will always have volatility 

1:37:15 Ask Chuck 

1:37:30 Should more candidates not run under the D or R label? 

1:42:00 What practices would you suggest to reform ballot access? 

1:45:30 Is the risk of China owning Tiktok any worse than Trump allies? 

1:49:45 Were Biden's infrastructure projects halted by Big Beautiful Bill? 

1:52:45 College football update

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