President Donald Trump is the consummate salesman, and his State of the Union address will seek to convince Americans our republic is in a better place. Despite some improvements, the American people at their core know things aren’t so rosy.
Elijah Henry
Consumer confidence has collapsed to the lowest level in more than a decade. Despite promises to immediately reduce prices, the American people are still paying through the nose for food and energy. The cheapest ground beef at my local grocery store is at least 50% more expensive than just a few years ago.
Far from shrinking the government and reducing its role in the lives of the American people, Trump’s second term has entrenched it further, with trillion-dollar deficits, wildly perpetrated tariffs, government interference in financial markets, expensive housing regulations and immigration policies that substitute one form of coercion for another.
Nobel Prize-winning economist Milton Friedman astutely noted that inflation “is made in Washington,” a product of excessive government spending, regulation and particularly money creation. Yet nowhere on Trump’s agenda is a serious effort to radically reduce government spending.
Remember how spending exploded during COVID-19? The pandemic ended, but government spending never does.
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The Joint Economic Committee this month found that in January the government ran a deficit of nearly $95 billion. For every dollar it takes from your paycheck and mine, Trump and Congress spend $1.39. Our nation's government debt now approaches 125% of gross domestic product.
Trump’s tax cuts, however welcome in isolation, were never paired with commensurate spending restraint. As much as I hate taxes, we need spending cuts more than we need tax cuts. Frighteningly, entitlements have ballooned, military budgets have swelled and “border security” has become another trillion-dollar sinkhole.
As a result, the deficit has exploded.
Tariffs imposed helter-skelter on allies and adversaries accentuated our economic pain. They function as a hidden tax on every American consumer and producer, regardless of how much of the cost might be borne by foreign manufacturers. Estimates peg the 2025 burden at $1,000 per American household. By next year, it is expected to reach $1,300.
When the government imposes these taxes, it means that Washington, not individuals, decides which goods Americans may buy and at what price. And the American people are certainly paying the price as the cost of everyday goods keeps rising.
Government interference with human movement has exacerbated the situation. Trump boasts of negative net migration, millions of deportations and a “secure” border achieved through Immigration and Customs Enforcement (ICE) raids, self-deportations and expanded enforcement. But a study by the Cato Institute found that immigration has generated as much as $14 trillion in savings for federal budgets over 30 years.
Without immigrants, our debt could balloon, potentially causing economic collapse. It would be great to save the republic without destroying it. With multitudes of immigrants being shown the door and policies generally orchestrated to hurt American wallets, the long-term economic consequences could be dire.
Unable to boost incomes, the president has embraced policy gimmicks, as politicians tend to do.
For example, he has urged Congress to cap interest rates at 10% while decrying “abusive” lenders.
Yet a study by Trump’s former senior economic adviser shows a 10% ceiling will shrink credit availability for underprivileged borrowers, young families and small businesses.
Equally destructive is Trump’s recent ban on private investors in the single-family housing industry. It sounds great -- except that these investors are responsible for increasing the supply of affordable housing.
On most issues, Trump has not turned America around.
