Trump to Inherit Strongest U.S. Economy in 50 Years, but Project 2025 Could Undermine It, Expert Warns
Indianapolis, April 27, 2024 — As President-elect Donald Trump prepares to assume office, economists are closely scrutinizing the state of the U.S. economy and the potential impact of his proposed policies. Michael J. Hicks, Director of the Center for Business and Economic Research and George and Frances Ball Distinguished Professor of Economics at Ball State University, offers a cautionary perspective in his recent opinion piece published in the Indianapolis Star.
Hicks asserts that Trump is set to inherit what he describes as the strongest domestic economy in half a century. “Job growth, wage growth, and GDP growth are all strong, and inflation has returned to its normal plodding path,” Hicks writes. This robust economic foundation, he suggests, indicates that the United States could be experiencing a prolonged period of expansion.
The Promise and Peril of Project 2025
Central to Trump’s economic strategy is “Project 2025,” a comprehensive roadmap outlining his administration’s fiscal and economic policies. Hicks highlights that while the current economic indicators are favorable, the implementation of Project 2025 could pose significant risks. “Project 2025 will tell us what we need to know about economic and fiscal policy,” Hicks explains, noting that the plan includes ambitious changes that may require Congressional approval—a prospect he deems unlikely before the next election.
One of the key components of Project 2025 is the expansion of political appointees in the civil service, increasing the number from 4,000 to 20,000. While this move could be executed without direct Congressional support, Hicks warns that many other elements of the plan are contingent on state compliance or judicial approval, making their realization uncertain within a four-year term.
Potential Policy Shifts and Economic Impacts
Hicks outlines several policy proposals within Project 2025 that could reshape various sectors:
- Education: The abolition of the Department of Education and the introduction of universal school vouchers aimed at increasing educational choice.
- Environmental Regulation: Efforts to reduce environmental protections, potentially accelerating energy production on federal lands.
- Social Policies: Restrictions on abortion-related medications and the reversal of benefits for veterans of recent wars.
These initiatives, Hicks argues, represent a shift towards a more expansive and intrusive federal government, driven by socially conservative ideologies. However, he contends that such changes are unlikely to fully materialize due to legal and political challenges.
Fiscal Concerns and Public Debt
Despite the optimistic economic outlook, Hicks expresses concerns over Trump’s lack of a comprehensive plan to address long-term fiscal issues such as public debt, taxes, and entitlement spending. “Nothing in Project 2025 wrestles with the real fiscal challenges,” he states, predicting that public debt will continue to grow substantially during Trump’s potential second term.
Immediate Economic Risks
Beyond fiscal policy, Hicks points to Trump’s stance on immigration and trade as immediate threats to economic stability. Trump’s promise of mass deportations of illegal immigrants, according to Hicks, could have severe economic repercussions. He estimates the cost of voluntary deportation programs and the mobilization of National Guard troops to exceed half a trillion dollars. Additionally, the removal of millions of undocumented workers could exacerbate labor shortages and increase the federal deficit, slowing economic growth.
More Read
On trade, Hicks warns against Trump’s proposed expansion of tariffs. Drawing parallels to his 2018 tariff policies, Hicks cautions that a 10-20% tariff on all imported goods could trigger a recession by raising prices on manufactured goods and inviting retaliatory tariffs from other nations, thereby reducing demand for U.S. exports.
Conclusion: A Fragile Economic Future
While acknowledging the current strength of the U.S. economy, Hicks remains skeptical about the sustainability of this growth under Trump’s administration. He emphasizes that the combination of aggressive policy changes and insufficient fiscal management could undermine the very foundations of economic prosperity that the nation currently enjoys.
“The U.S. economy has dominated the world for most of the past century and continues to do so today,” Hicks concludes. “Trump’s policies deeply risk the first of our twin pillars of strength—our reputation as a magnet for human capital and our adherence to the rule of law. If his approach to governance remains lawless, a weakened and poorly performing economy will be among the least of our concerns.”
As the nation awaits Trump’s policy implementations, economists like Michael J. Hicks urge vigilance and informed discourse to navigate the potential economic challenges ahead.
