Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. His column appears in Indiana newspapers.

President-elect Trump will inherit the strongest domestic economy in 50 years. Job growth, wage growth and GDP growth are all strong, and inflation has returned to its normal plodding path. We could be at the midst of a long expansion.

It is not hard to gauge the policy choices Trump will prefer. Project 2025, of which I’ve written, will tell us what we need to know about economic and fiscal policy. It is a detailed roadmap and will animate much of what happens in the executive branch over the coming years. Much, but not all, of Project 2025 will require compliance in the House and Senate. That seems unlikely, at least until the next election.

Project 2025 tells us to expect a big expansion in political appointees to civil service, from 4,000 to 20,000, which appears to be possible without the support of Congress. With that, we’ll see efforts to pressure states to expand universal school vouchers, reduce environmental regulation and expand energy production on federal lands.

Much of this won’t come to pass, since it falls to the purview of state governments or will be tied up in courts for years. So, like these changes or not, don’t expect them all in four years. This, of course, depends upon the next administration’s compliance with the Constitution, a dubious proposition to be sure.

Project 2025 also contains varied proposals that would reverse benefits to veterans of the wars in Iraq and Afghanistan, restrict access to abortion-related medications, abolish the department of education, and link federal classroom funding to schools that follow approved curriculum.

Almost all of Project 2025 builds a bigger, more expansive and intrusive federal government. Most of it comes from legislation to expand socially conservative ideas, using the strong arm of government. We should expect much more of that from this administration.

The U.S. economy won’t be much affected by the slow changes to these sorts of policies, and the tough political fights they entail. Nothing in Project 2025 wrestles with the real fiscal challenges — debt, taxes and entitlement spending. Nor does Trump have a plan to deal with public debt. As with his first term, we should expect public debt to grow substantially in his second.

There’s also been a flurry of statements on the campaign trail that offer more immediate risk to the economy. Trump has spoken disapprovingly of an independent Federal Reserve. That would take a compliant Congress, which he won’t have, but the appointment of a different board of governors and chairman could vastly reduce its independence.

Trump has promised the mass deportation of illegal immigrants. He did nothing about illegal immigration in his first term, so we might expect more of the same. Illegal immigration in the U.S. is down from its 2007 high of 12.2 million persons to somewhere between 10.5 and 11.5 million today. So, absent misleading claims, the challenge of illegal immigration is lessening over time.

The costs of deportation are huge, Bus and rail costs for voluntary deportation would run well over $50 billion, and take well over a year. We simply don’t have the buses on the U.S. to move 11 million people to, say, Mexico in a year. Moreover, the cost of mobilizing tens of thousands of national guard troops to aid in deportation would be well over a half-trillion dollars.

Deportation and mobilization would also remove millions of workers from an economy that is already starved for workers. This would spike the deficit, since illegal immigrants pay much more in taxes than they receive in services. It would also slow economic growth. So, on this issue, expect much of what Trump has shown a propensity for — bold claims and little action.

Trump has also claimed he would expand tariffs, perhaps dramatically. Here, Congress has given the president enormous latitude in setting tariffs for national security claims. Presidents from both parties have abused this power, so Trump will be able to levy virtually whatever tariff he wishes, in whomever he wishes.

The tariffs are purportedly designed to increase U.S. manufacturing employment. One key problem with that claim is that there’s overwhelming evidence that tariffs reduce domestic factory employment. Indeed, Trump’s 2018 tariffs pushed the Midwest — whose factories were especially susceptible to tariffs — into the brink of recession in 2019. Today, factory employment in the Midwest is well below the January 2017 levels when Trump first took office.

A 10 percent tariff on all imported goods, and 20 percent on Chinese goods, as Trump proposes, would quickly push the U.S. into recession. Prices on all manufactured goods would rise, and we would expect retaliatory tariffs to likewise reduce demand for U.S. goods and services abroad. This is a hard lesson to re-learn, but we appear a hardheaded people.

It must be said that many of the Kamala Harris economic proposals were also unhelpful to long-term economic growth. Her tariffs were more modest, but still short-sighted and counterproductive. The Democrats also lack an effective plan for debt reduction and hold ridiculously optimistic views of their place-based economic development programs.

But there is one big difference between the 2024 candidates.

The U.S. economy has dominated the world for most of the past century and continues to do so today. Over that time, we’ve endured a lot of very bad economic policies, but continued to thrive.

Our twin pillars of strength lie in our national reputation in two areas: First, we are a magnet for attracting and creating human capital — educated people with skills, drive and entrepreneurial talent. Second, we abide by the rule of law in the conduct of our elected officials, commerce and international affairs.

Trump’s policies deeply risk the first of these, in making the U.S. an unwelcoming and risky place for foreign nationals. Trump’s conduct while in and outside of office makes mockery of the rule of law. If his lawlessness continues, as we must expect, a weakened and poorly performing economy will be among the least of our concerns.
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