Liam Dillbeck | News Editor
December 5, 2024
As Biden’s administration packs it up and moves out of the White House, the Republicans eagerly wait for a quick return to “Trumponomics.” Economic relief has continued to be a pinnacle selling point in Trump’s 2016 and 2024 campaigns. His foundational promises consist of tax cuts, tariffs, and lowering interest rates, all in an attempt to increase GDP and simultaneously decrease inflation.
In a previous article, I discussed the flaws with Trump’s exaggerated tariffs, and how they inevitably lead to a significant amount of inflation. Unsurprisingly, his planned tax and interest rate cuts will equally upset America’s economic health. Trump successfully convinced the majority of American citizens that these cuts are easily manipulated. People believe him because, after all, what is more appealing than “putting more money in the hands of the people, making everyone better off and spending more money,” reasoned San Clemente High School senior Hunter Lawrence.
To put it simply, Trump has little say in interest rates, and although he can make the tax cuts he promises, he has shown us he is determined to only relieve the top 5%. In fact, Trump might have trouble on his hands due to the Federal Reserve’s (who are actually in charge of interest rates) complication with future inflation. As mentioned before, the Federal Reserve recently cut their interest rates down 0.5% in September of 2024. Their intention was to show good faith in the current economic period, letting consumers spend more without consequences.
The Federal Reserve’s generous cut perfectly reflects our economic health, but Trump’s plan to stack an additional decrease in rates would be unbelievably harmful. It is a sensitive subject in economics, but as most Macroeconomics students, like senior Jonathan Wagner, are learning this year, “ lowering interest rates would increase GDP but also inflation” because giving too much money to consumers is actually problematic. Paper money holds its value through scarcity, so an increase in the resource makes it less powerful. This is the basis of inflation. While our economic goal as a country should be putting money in the hands of its people, taking the fastest route with disastrous long-term consequences like immediate tariffs, tax cuts, and lowering interest rates should be avoided.
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