Top economists and various financial experts have been warning that Donald Trump’s plans for the second presidential administration will increase the federal deficit by trillions of dollars, fuel inflation, and, ultimately, send the US economy into recession (if not depression). Ironically, Trump’s campaign chief, Elon Musk, seems to agree that the candidate’s policies could hurt the economy.
For the second time in a week, Musk is saying outlandishly that Trump will bring economic “difficulty” to America, a claim that would be laughable if it didn’t seem likely. The first incident came during a “Telephone Town Hall” held on the website of tech billionaire X, where Musk cryptically said: “We have to cut back on spending to live within our means.” And that involves short-term difficulties, but it will ensure long-term prosperity.” Musk, who was talking about reducing the country’s debt during his comments, did not specify what he was talking about.
If that might scare some voters, Musk did nothing to assuage their fears when, on Monday, the tech billionaire once again appeared to confirm the idea of impending doom for the American people. Musk did this by responding to a rightwing account on X, the same one who wrote a screed about the coming “collapse” of the economy:
If Trump succeeds in forcing mass deportations, combined with Elon robbing the government, As crazy as it sounds, deporting people and reducing the deficit – there will be an initial overreaction in the economy – this economy is financed by debt (productive). commodity bubbles) and illegally depressed wages (due to illegal immigration). Markets will crash. But when the storm passes and everyone realizes that we are on the right track, there will be a quick recovery to a healthy, sustainable economy. History can be made in the next two years.
Musk replied: “Sounds right.”
Many economists have warned that Trump’s plans could cause a disaster for the American economy. His plans to deport millions of illegal immigrants, cut big taxes on the wealthiest Americans, weaken the US dollar, and institute a global tax have all been called bad ideas that could increase government deficits, fuel inflation, and create chaos. . Trump’s advisers have backed plans — such as making deep cuts in government spending and laying off tens of thousands of government workers — that would cause chaos. That said, it’s surprising to see Musk — a key Trump ally — admit this, while in the middle of one of the tightest presidential races in modern history.
Why would Musk do this? It seems noteworthy that one of Musk’s heroes is the current president of Argentina, Javier Milei, who is credited with taking the “saw” from the nation’s government. Milei, the most famous “free market”, “anti-resurrection”, took power in December 2023, and has instituted what he calls a “budget” characterized by “mismanagement” of the economy. This strategy has involved deep cuts in government spending on social programs, devaluing the peso, and cutting thousands of government jobs, all in the hope of a mysterious libertarian glowup in the near future.
The parallels between Miley’s government and the programs sponsored by Trump supporters should be noted. While the US and Argentina are two very different countries, the ideology fueling Miley’s reform of her government, and the ideology fueling many of Trump’s advisers, is the same. ProPublica recently revealed the intentions of Trump’s powerful adviser, and libertarian, Russell Vought, who is said to be key to Project 2025, an anti-government effort announced by the Heritage Foundation. Vought also said he wants to reorganize the federal government and put civil servants “in harm’s way”. Musk, himself, has advocated for a “Government Efficiency” task force, similar to one that would “audit” public institutions for inefficiencies. Like Milei’s strategy, Trump’s advisers see a lean, stripped-down leadership as the key to the country’s long-term wealth.
That said, Argentina under Milei doesn’t seem to be seeing much wealth. In the first six months of his presidency, the poverty rate increased by 10 percent and last year the inflation rate rose to 211 percent, the highest rate in 32 years. The rates of homelessness and job loss have been seen to increase. Many Argentines have been “scavenging” to survive, Reuters reported in March. Inflation in the country is now falling, but only after rising to the highest level in the world. When Milei took office last December, his comment, like Musk’s, was: “We know that in the short term the situation will be worse.” I think mission accomplished.
For whatever reason, Trump’s supporters consider him a capable and successful businessman and have fond memories of the economy under his leadership. Despite these widespread beliefs, most reliable economic data suggests that Trump actually inherited a strong economy (like the one that had been in a period of strong recovery since the 2008 financial crisis) from the outgoing Obama administration and that Trump’s policies actually worked. destroying that strong economy, not helping it.
Ironically, Trump’s economic plans seem designed to hurt his voters—a situation his voters clearly do not understand. For example, Trump has said he wants to eliminate taxes on Social Security. Voters at the convention recently cheered the proposal, because they don’t like the tax. However, Social Security only goes so far they exist thanks to taxes. Trump’s proposal is like a bank telling a small business it will cut its credit; the business would falter and die. Ending taxes on SS would starve and eventually end the system in a matter of years, leading to tens of millions of Americans being thrown into poverty. In contrast, Harris announced plans to save the system by raising taxes on the top 1 percent of Americans.
What stands out from all of this is that if Trump were to win the presidency and if he were to try to narrow down many of his party’s economic proposals, he would obviously need the approval of Congress to pass them. It is impossible for him to get such permission. That said, the very fact that such dangerous policies are being floated is alarming enough.
Source link
