Has Trump promised too much on US economy?

Donald Trump, the president-elect of the United States, has made several ambitious promises regarding the economy. He has vowed to put an end to the ongoing inflation crisis, implement tariffs, and significantly reduce taxes, regulations, and the size of the government. Trump believes that this combination of actions will spark an economic boom and restore faith in the American dream. During a recent speech at Mar-a-Lago, he declared, 'We're at the beginning of a great, beautiful golden age of business. ' However, there are growing concerns that many of his proposed policies may actually harm the economy rather than help it. As he prepares to put his plans into action, analysts warn that he will encounter political and economic realities that could hinder his ability to fulfill all of his promises. Romina Boccia, the director of budget and entitlement policy at the Cato Institute, stated, 'There's no clear path forward at this time for how to meet all these goals because they're inherently contradictory. ' This suggests that some of Trump's objectives may conflict with one another, making it difficult to achieve them all. One of Trump's key promises is to address inflation, which refers to the rate at which prices for goods and services rise. He has repeatedly stated, 'Prices will come down,' but this is a risky promise to make, as prices typically do not decrease unless there is a significant economic crisis. While inflation has shown signs of decreasing, it remains a challenging issue to fully resolve. Trump has linked his claim to the expansion of US oil and gas production, believing that this will help lower energy costs and, in turn, reduce inflation. However, many experts caution that the factors influencing inflation and energy prices are largely beyond the control of the president. They warn that some of Trump's proposed measures, such as tax cuts, tariffs, and deportations, could exacerbate the inflation problem. Economist John Cochrane from the Hoover Institution emphasized the challenge Trump faces in balancing the interests of different factions within his coalition, stating, 'Clearly both camps can't get what they want. ' This indicates that it will be difficult for Trump to satisfy everyone with his policies. Another significant promise made by Trump is the imposition of blanket tariffs, which are taxes on imported goods. He has pledged to implement a minimum 10% tariff on all goods entering the US, with rates exceeding 60% for products from China. Trump has also intensified threats against specific countries, including allies like Canada, Mexico, and Denmark. Some of his advisors suggest that these tariffs may serve as negotiation tools for other issues, such as border security, and that he may ultimately adopt a more targeted or gradual approach. However, analysts express concerns about the potential economic risks associated with such tariffs. They argue that tariffs are likely to lead to higher prices for American consumers and could harm companies facing retaliation from foreign nations. Unlike during Trump's first term, any new tariffs would be introduced at a time when the US economy appears to be nearing the end of a long expansion period. Even if the most severe tariffs do not come to fruition, the mere discussion of these policies could create uncertainty that might dampen investment and slow economic growth in the US by as much as 0. 6% by mid-2025, according to Oxford Economics. Michael Cembalest, the chairman of market and investment strategy for JP Morgan Asset Management, warned that the desire for significant changes could 'break something,' although the exact nature of the consequences remains uncertain. Trade lawyer Everett Eissenstat, who served as a White House economic advisor during Trump's first term, expressed his expectation for an across-the-board tariff but acknowledged that this plan would compete with other objectives. He stated, 'There's always tensions. There's never perfection in the policy world. ' Trump has also promised to lower taxes and cut government spending as part of his growth plan. He believes that reducing taxes, regulations, and the size of government will unleash American businesses. However, analysts caution that cutting regulations may take longer than anticipated. Furthermore, Trump is expected to prioritize extending expiring tax cuts over reducing spending. Romina Boccia from the Cato Institute predicted that borrowing would surge under Trump's administration, contributing to inflationary pressures. Concerns about rising US debt have already led to increased interest rates on government debt in recent weeks. Although Trump is likely to face resistance from some members of his party who are worried about the high levels of debt, extending tax cuts, which are projected to add over $4. 5 trillion to US debt over the next decade, seems almost certain. In contrast, Trump has indicated that he would leave major programs like Social Security unchanged during his campaign. The so-called Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, has also publicly scaled back its ambitions. Ben Maurer, a lifelong Republican, expressed his desire for Trump to focus on reducing government bureaucracy, stating, 'Government spending is absolute insanity.