Why Trump’s Policies Fail to Lower Prices: A Deep Dive into Economic Misconceptions
For Donald Trump’s most fervent MAGA supporters, the details of his campaign promises hold little significance; their unwavering loyalty guarantees their vote regardless of his actions or statements. However, the pivotal swing voters who played a crucial role in determining the election outcome expressed a clear desire for Trump to effectively reduce prices. Unfortunately, his current initiatives do not align with this goal. Instead, his pro-tariff policies are set to increase prices, as are his aggressive stances against both allies and adversaries. Furthermore, his efforts to deport and deter low-wage workers, particularly migrants, will inevitably drive prices higher. Even his wish to lower interest rates could backfire, as manipulating the Federal Reserve to achieve this would likely lead to inflationary pressures.
In a surprising twist, many seem to forget that Trump’s current agenda, rather than alleviating financial burdens for consumers, is likely to exacerbate them. The notion that significant policy changes can lead to a decrease in prices appears to be a misunderstanding of basic economic principles. For instance, his recent actions, including the mass firing of federal employees through Elon Musk’s DOGE initiative, might be perceived as a measure to curb inflation, yet this perspective oversimplifies a complex issue.
On closer inspection, the widespread dismissal of federal workers will have minimal impact on price reduction. Many of these employees, particularly those with expertise in science and technology, often choose federal positions for their stability and benefits. As they transition back to the workforce, they may actually spend more, thus fueling inflation rather than mitigating it. Additionally, the removal of thousands of federal jobs will scarcely dent the overall employment landscape, where approximately 163.31 million people are currently employed in the United States.
What implications does this have for the federal budget? One might assume that reducing the number of government employees would lead to a healthier fiscal situation. However, the reality is quite the opposite. In fact, during the first month of Trump’s second term, federal expenditures increased compared to the same timeframe the previous year under President Joe Biden. The costs associated with legal disputes arising from wrongful terminations can quickly negate any financial savings from job cuts. Furthermore, salaries of federal workers constitute less than 5% of total federal spending, which means any potential savings are quickly offset by Trump’s own expenditures, such as frequent and costly golf trips funded by taxpayers.
Understanding the economic dynamics of employment is crucial. The fundamental principle behind hiring is that employers pay employees less than the value they contribute through their work. While it’s a common narrative pushed by decades of Republican rhetoric that government is inefficient, this doesn’t hold true across the board. Many federal employees genuinely contribute value through their labor, and the idea that a substantial number of them are overpaid for minimal work is unfounded.
In truth, there is no substantial evidence to support claims that a significant portion of federal employees are receiving high salaries while offering little in return. On the contrary, the federal workforce is largely made up of dedicated individuals who take pride in their service to the public. These employees are not “waste”; they are essential contributors to the functioning of our government.
By firing valuable federal workers, Trump is not addressing the issues of inflation or the deficit—instead, he may be inadvertently undermining the very institutions that are vital in maintaining checks on an increasingly authoritarian presidency. The effects of such actions could have far-reaching implications for governance and economic stability.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has extensive experience teaching legal writing and has contributed to a variety of publications, demonstrating both his financial acumen and scientific literacy. The perspectives he shares are his own and should not be attributed to any organization with which he is associated. He welcomes communication at <em>jon_wolf@hotmail.com</em>.
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