How Trump will actually turn America into the 'garbage can of the world'

Elon Musk will be given power to cut $2 trillion in spending--which would include Social Security and Medicare--while companies are right now planning price hikes, preparing for massive tariffs.

The Wall Street Journal front page story today is quite something: “The Next President Inherits a Remarkable Economy:"

Whoever wins the White House next week will take office with no shortage of challenges, but at least one huge asset: an economy that is putting its peers to shame.

With another solid performance in the third quarter, the U.S. has grown 2.7% over the past year. It is outrunning every other major developed economy, not to mention its own historical growth rate.

More impressive than the rate of growth is its quality. This growth didn’t come solely from using up finite supplies of labor and other resources, which could fuel inflation. Instead, it came from making people and businesses more productive.

This combination, if sustained, will be a wind at the back of the next president.

Meanwhile, higher productivity growth should make the economy a bit less prone to inflation, more capable of sustaining budget deficits, and more likely to deliver strong wages. All would be a boon to President Trump or President Kamala Harris.

First off, this story is an example of the massive failure of the American media in allowing Donald Trump to own “the economy” as the top issue in the presidential campaign.

President Biden and Vice President Harris created this economy over four years, reviving it from the ruins of Trump’s mismanagement of the pandemic. They passed legislation that invested in America, from the American Rescue Plan and the infrastructure Investment and Jobs Act to the Chips and Science Act and the Inflation Reduction Act.

Yes, the public’s feelings about the economy have lagged because of inflation, and many are still experiencing the jolt of high prices even though the inflation rate is just about back to normal.

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But the corporate media has spent a lot of time lecturing Biden and Democrats for talking up the progress that’s been made on growing the economy while people in the “real world” were hurting, while it has spent very little time on educating those people in the “real world,” via intensive reporting, about just how great the economy is and how things will continue to get better.

Every time we have had good economic news over the past two years, it would play in the news as a quick report—before they were back to inflation and how the GOP and Trump were seen as those who would do better on the economy.

But as the WSJ story today reports, that’s all a lie. As the report notes, if Kamala Harris becomes president, she will inherit an economy that she helped bring to this place and will be able to build on it with proposals that help the American people while also being fiscally responsible.

But if Trump wins, this remarkable economy will explode. We learned two things in recent days that should be cause for enormous concern.

Trump is apparently going to give Elon Musk the ability to come in and slash government programs, throwing out the number of $2 trillion. This is absolutely insane, and even Musk acknowledges it will cause hardship and pain for millions of Americans—supposedly before it then allows the country to prosper. From The Washington Post:

Elon Musk appeared to acknowledge Tuesday that his pledge to help former president Donald Trump slash federal spending could unleash severe, short-term economic turmoil, underscoring the fiscal stakes as voters weigh whether to send the Republican back to the White House.

Musk first outlined his highly aggressive target at a raucous campaign rally in New York last weekend, promising to identify “at least $2 trillion in cuts” as part of a formal review of federal agencies that he would conduct if Trump wins next week’s election.

But the audacious pledge, which drew rapt applause, belied a harsh fiscal reality: Slashing the budget that steeply would require decimating an array of government services, including food, health care and housing aid — and it could erode funding for programs that lawmakers in both parties say they want to protect, from defense to Social Security.

Yesterday Musk agreed with others on X that this plan risked “severe overreaction in the economy” and would cause markets to “tumble” but said that it would all get better in the end. Economists responding to Musk’s plans said it would be impossible to do what he wants to do without attempting to take a sledgehammer to Social Security and Medicare:

“The idea that one can cut $2 trillion in wasteful and unnecessary programs is absolutely absurd,” said Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank. “There’s a long history of the fantasy that one smart businessman will just identify trillions in waste, but that’s just not how it works.”

More likely, Musk would need to pursue much broader cuts that include what are known as mandatory programs, such as Social Security, Medicare and Medicaid, which are funded as a requirement of federal law. To achieve his savings, he would need to propose dramatic, structural changes to these and other benefits, from lessening payment amounts to limiting eligibility, perhaps even raising the retirement age.

The other story that emerged in the media yesterday but is not getting enough attention is how companies are now planning a spike in prices, anticipating Trump’s tariffs, which could be as high as 20% on all foreign goods, just in case he’s elected:

Across the United States, companies that rely on foreign suppliers are preparing to raise prices in response to the massive import tariffs that former president Donald Trump promises if he wins the election Tuesday.

Producers of a range of items, including clothing, footwear, baby products, auto parts and hardware, say they will pass along the cost of the tariffs to their American customers.

The planned price increases next year would come as consumers are beginning to enjoy relief from the highest inflation in four decades, and they directly contradict Trump’s repeated assurances that foreigners will pay the tariff tab.

“We’re set to raise prices,” Timothy Boyle, chief executive of Columbia Sportswear, said in an interview. “We’re buying stuff today for delivery next fall. So we’re just going to deal with it and we’ll just raise the prices. … It’s going to be very, very difficult to keep products affordable for Americans.”

Economists have been sounding the alarm that Trump’s 10 to 20 percent tariffs on all foreign goods would be an “inflation bomb,” sending the economy into a tailspin.

Between the tariffs and Musk’s plans on $2 trillion in government spending cuts—while Trump plans on extending and increasing tax cuts for wealthy people like Musk—Trump will rip down an economy Biden built that is the envy of other nations. And that will truly turn the U.S., to quote Trump from last week, into the “garbage can of the world.”