The administration’s plan to make the US economy stronger could succeed as long as it addresses two major risks.
Despite the talk of austerity — and amid the possibility of a global trade war, the reality of a stock-market correction and fears of a US recession — there is still a chance that President Donald Trump’s agenda could increase economic growth. As usual, it will depend on the execution.
It’s true that the first item on the president’s agenda, shrinking the size of government, is usually associated with a policy of austerity. But while Elon Musk’s Department of Government Efficiency is causing major disruptions — firing people, cutting funding, eliminating agencies — it does not by itself amount to an austerity program. Austerity involves a policy, usually forced in times of crisis, that aims to shrink the economy by reducing both spending and deficits. This is not what DOGE is; it does aim to lower costs, but its effect is small and it has no say on revenue.
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
Photo by Gennadiy Kravchenko/Getty Images
