Peter St Onge gives his usual sharp summary of Trump’s economic plan for his second term:

• “In short, Trump plans more of what he did first time round: Lower taxes — he’s floating 15% rates. Slashing red tape, drill baby drill, and new tariffs, especially on China — which Trump again floated as a replacement for the income tax, which would be glorious if it came to pass.
• “He plans to end the foreign wars, including Ukraine and a theoretical war over Taiwan. And, of course, he plans to restore the border and deport 10 million plus illegals Joe Biden imported for us.
• “Oh, and no taxes on tips.
• “On the Fed, Trump plans to keep Jerome Powell until his term ends in early 26 — note it’s nearly impossible to remove a sitting Fed Chair before his term ends. He thinks the Fed should hold off rate cuts since inflation isn’t tamed yet, which is correct.”

His caveats:

• “If voters deliver Trump a workable Congress, then he could quickly pass tax cuts and deregulation that would start taking the edge off inflation, granting that to actually wipe out inflation would take getting Javier Milei level spending cuts through Congress.
• “The other elephant in the room is the recession. Taxes and deregulation make us rich in the long run, but it takes times for new businesses to start, existing businesses to expand, or new factories to be built.
• “A few weeks ago I argued we may already be in recession, hidden by rising asset values by the Fed. With potentially more to come as the federal debt train runs off a cliff.
• “So it may be too late to skip the downturn, but we have the chance to start digging out of this hole while building a strong foundation for the future.”

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