Dear Chuck,

With Donald Trump re-elected, what economic changes do you think we should expect now?

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Opportunistic investor

Dear opportunistic investor,

In what has been described as “the greatest comeback in American political history” by Vice President-elect JD Vance and a host of others, the results of the November 5 election will go down in history. Americans and the entire world were shocked to see President Trump overcome the improbable odds of being re-elected. He won not only the Electoral College but also the popular vote. Additionally, the House and Senate will have a Republican majority. A clear path has been set for the radical changes that are likely to come.

Personally, I prayed that we would avoid a contested election leading to political instability. I thank God for answering my prayer. Many economic changes are coming. Some will work; some won’t. Some will benefit from it; others will be moved. If you think of economics as the “study of human behavior,” as I often call it, you will be able to anticipate future opportunities.

Three potential economic changes

During President Trump’s many campaign rallies, I noted three potential policy changes that seem almost too good to be true. Keep in mind that a lot is said during a campaign and may or may not be implemented.

Rates and income taxes

In a recent interviewPresident Trump said he thought the word price was “the most beautiful word in the dictionary”. In other words, he is very enthusiastic about using tariffs. He believes that imposing tariffs on foreign products will create more jobs in the United States, finance part or all of the federal budget and could reduce or even eliminate the federal income tax for individuals. It certainly caught my attention because it would impact all of our lives, directly and indirectly.

I had to learn more about what the tariffs were trying to achieve. In a summary by the Dartmouth Economist Douglas Irwintariffs served three main purposes: “to raise government revenue, restrict imports and protect domestic producers from foreign competition, and enter into reciprocal agreements that reduce trade barriers.” »

The direct benefit of low or no income taxes would lead to an economic boom for America’s small businesses, particularly in the real estate sector, as disposable income soars. Obviously, this would create difficulties for some industries that provide services in complying with tax laws.

I suspect this policy will be met with strong resistance from those who risk being harmed. This will require careful analysis and measured implementation. I think it will be an uphill battle. However, the indirect benefits could result in much greater leverage over foreign countries that currently produce our goods, such as China and India. This will likely require their cooperation, or they will lose access to the world’s most powerful market.

Other tax policies

President Trump has talked about eliminating taxes on tips and overtime income and allowing a tax deduction for interest paid on an auto loan if the car was/is manufactured in the United States. These changes will be music to the ears of our hard-working contract workers who will benefit from increased disposable income. Although the idea of ​​a tax benefit for interest paid on an auto loan seems reasonable, it is likely to drive up the cost of automobiles as borrowers transfer the interest saved into larger loan amounts.

These political promises could be fulfilled soon after the inauguration. However, they will lapse if the federal income tax system is dismantled by the tariffs mentioned above.

Cut federal spending by a third

Uncle Sam has been spending 1/3 of his income in excess for over 25 years. It is economic suicide and we must change. See last week’s column. Elon Musk will likely be named government efficiency czar, as President Trump has occasionally promoted. This will be an unofficial volunteer position aimed at ending government waste and inefficiency. Elon Musk recruited Ron Paul to help him with this task. Former Congressman Ron Paul was the only voice in the wilderness throughout his career to sound this alarm. The two men will quickly work to find money that can be permanently eliminated from the budget.

I believe this will cause shock among government agency leaders, longtime bureaucrats, and staff, as many will struggle to justify their survival. I expect public revolts as job security is threatened. However, the long-term benefits of a fiscally sound government will far outweigh the short-term adjustments. We can only imagine the growth that could result when the good faith and credit of the U.S. government is fully restored.

A golden age of prosperity?

Some of the economic experts I read, like Adam Kobeissi And John Maudinboth of whom are knowledgeable sources for market trends, feel that we may be heading toward the golden age of American prosperity. Of course, we live in a fallen world, so the road ahead will be paved with enormous political, social and spiritual challenges.

We must keep our eyes fixed on Christ, not the government, to ensure our peace, security, and purpose in life. This is not our house. Regardless of what lies ahead, let’s continue to lay up treasures in Heaven, where the streets will be paved with gold – tax-free.

Similar to Uncle Sam, if overspending and debt is putting you or someone you know in a difficult financial situation, a trusted Crown partner is Christian Credit Counselors. They are a valuable resource to help consolidate debt and get started on the path to financial freedom.