President Donald Trump was elected in large part due to his promises to bring economic prosperity to every corner of the country. But one conservative economist says that as of right now, Trump's second term is only bringing more economic pain.
In a recent essay for Politico, Jessica Riedl — who is a senior fellow at the arch-conservative Manhattan Institute — pointed out six ways Trump's policies are self-contradictory and doomed to fail. And she warned that both American households and businesses will suffer under his management of the economy unless he makes fundamental changes.
First, Riedl argued that Trump can't simultaneously argue tariffs are a temporary negotiating tool while also a way to create permanent jobs. She observed that businesses won't decide to make significant capital investments if there's an air of uncertainty in the economy, adding Trump has contributed to that uncertainty with his sudden imposition and sudden withdrawal of sweeping new import taxes.
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Riedl's second point was that tariffs can't both create trillions of dollars in new revenue while also protecting American industries. She noted that as tariff revenue goes up, import demand goes down, thus also slowing down economic growth as a whole. She said that more likely, tariff revenue would be minimal and would not make up for the economic chaos they create.
Thirdly, the Manhattan Institute researcher warned that Trump would not be able to follow through on his promise of both reducing the federal deficit while also protecting safety net programs like Medicaid, Medicare, veterans' benefits and Social Security — which Tesla and SpaceX CEO Elon Musk and his Department of Government Efficiency (DOGE) has openly sought to cut. She pointed out that roughly 75% of the budget pie is made up of mandatory spending programs, and that if he aims to shrink the federal budget by 27% (the figure necessary to eliminate the approximate $1.87 trillion federal deficit) he would have to make cuts to some of those politically popular programs.
The fourth complaint on Riedl's list was that Trump cannot simultaneously eliminate the budget deficit while also extending his tax cut package from 2017. She called his promise to cut taxes "mathematically nonsensical" when put side by side with his pledge to eliminate the deficit, given the steep drop in tax revenue that would result from a tax cut extension.
Her fifth and sixth points also pertained to the deficit and the debt, respectively. Riedl argued that DOGE's work is likely to increase the federal deficit rather than shrink it due to its layoffs of IRS employees who help the government collect tax revenue. And she concluded by saying Trump can't claim that the national debt matters while also championing policies that increase the national debt. She also referred to a Republican "gimmick" to disregard the cost of extending Trump's tax cuts (which would cost roughly $4.6 trillion over 10 years) as "fiscal nonsense."
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Click here to read Riedl's essay in full.