“Section Four: The Economy” Between the Lines

In-Depth Analysis:

1. Reforming Trade Policy to Address Economic Aggression:
   • Policy Proposal: The proposal suggests reshaping U.S. trade policy to focus on reducing the country’s trade deficits, particularly with China. It advocates for implementing tariffs and other protectionist measures to counteract what is described as “economic aggression” by China, including unfair trade practices, currency manipulation, and control over global supply chains.
   • Concerning Implications: While protectionist measures like tariffs can protect domestic industries, they also risk triggering trade wars, which can lead to retaliatory tariffs from other countries. This could increase costs for American consumers, reduce export opportunities for U.S. businesses, and create uncertainty in global markets. The focus on decoupling from China might also lead to significant disruptions in supply chains, particularly for critical goods such as pharmaceuticals and electronics.
   • Potential Consequences: The adoption of a more aggressive trade policy could lead to higher prices for consumers, potential job losses in export-dependent industries, and strained international relations. Furthermore, the emphasis on economic nationalism could isolate the U.S. from global trade networks, potentially weakening its economic influence and leading to long-term economic instability.
2. Eliminating Special-Interest Tax Credits and Broadening the Tax Base:
   • Policy Proposal: This proposal calls for a broad-based tax reform that eliminates special-interest tax credits, deductions, and exclusions. The goal is to simplify the tax code, reduce marginal tax rates, and create a more neutral tax system that does not favor specific industries or groups.
   • Concerning Implications: While simplifying the tax code and reducing special-interest tax breaks can lead to a more efficient and equitable system, the elimination of certain tax credits could disproportionately impact industries or groups that currently benefit from them, such as renewable energy or low-income housing developers. This could reduce investment in these sectors, potentially leading to job losses and slower economic growth in targeted areas.
   • Potential Consequences: The proposed tax reforms could lead to reduced federal revenue, potentially increasing the budget deficit unless offset by spending cuts. The elimination of tax incentives for certain industries could also slow down innovation and progress in areas like clean energy, which are critical for addressing climate change. Additionally, the broadening of the tax base might increase the tax burden on middle and lower-income individuals if not carefully designed.
3. Reforming the Federal Reserve and Exploring Alternatives:
   • Policy Proposal: The proposal advocates for significant reforms to the Federal Reserve, including removing its mandate to promote full employment, focusing solely on price stability, and considering alternatives such as a return to the gold standard or the adoption of free banking.
   • Concerning Implications: Removing the full employment mandate could result in the Federal Reserve prioritizing inflation control over job creation, potentially leading to higher unemployment rates during economic downturns. The exploration of alternatives like the gold standard or free banking could lead to instability in the financial system, given that these approaches have been largely abandoned due to their limitations in managing modern economies.
   • Potential Consequences: The proposed changes to the Federal Reserve’s mandate could lead to increased unemployment and greater economic inequality. Abandoning current monetary policies in favor of outdated or untested systems could destabilize the financial markets, reduce the government’s ability to respond to economic crises, and increase the risk of financial panics or recessions.
4. Abolishing the Export–Import Bank:
   • Policy Proposal: The proposal suggests abolishing the Export–Import Bank (EXIM), arguing that it operates as a protectionist agency that distorts the market by providing financing to large, well-capitalized companies at the expense of smaller businesses.
   • Concerning Implications: While critics argue that EXIM distorts the market, it also plays a crucial role in supporting U.S. exports, particularly in sectors where private financing is unavailable or insufficient. Abolishing EXIM could reduce the competitiveness of U.S. companies in international markets, particularly in industries like aerospace, where large export deals are common.
   • Potential Consequences: Eliminating EXIM could lead to a decline in U.S. exports, particularly in industries that rely on its financing to compete internationally. This could result in job losses and reduced economic growth, particularly in sectors where foreign competitors are heavily subsidized by their governments. The decision to abolish EXIM could also weaken the U.S. position in global trade, as other countries continue to support their exporters through similar institutions.
5. Reevaluating U.S. Membership in the World Trade Organization (WTO):
   • Policy Proposal: The proposal calls for a reevaluation of the U.S.’s membership in the WTO, citing concerns that the organization’s rules favor other countries at the expense of the U.S. It suggests that the U.S. consider withdrawing if reforms are not made to address these imbalances.
   • Concerning Implications: Withdrawing from the WTO could significantly disrupt global trade, as the organization provides a framework for resolving trade disputes and ensuring that international trade rules are followed. A U.S. withdrawal could lead to increased tariffs, trade barriers, and retaliatory measures from other countries, harming U.S. businesses and consumers.
   • Potential Consequences: Exiting the WTO could isolate the U.S. from global trade networks, reduce market access for U.S. exporters, and lead to a more fragmented and protectionist global economy. This could result in higher costs for consumers, decreased competitiveness for U.S. businesses, and increased geopolitical tensions as trade disputes become more difficult to resolve.

Conclusion:

The economic policies proposed in Section Four of Project 2025 reflect a shift towards protectionism, economic nationalism, and a reevaluation of the U.S.’s role in global trade. While these proposals aim to protect domestic industries and reduce the influence of international organizations, they raise significant concerns about the potential for increased economic isolation, higher consumer costs, and reduced competitiveness in the global market. The emphasis on rolling back trade liberalization and reforming monetary policy could have profound and long-lasting effects on the U.S. economy, potentially undermining its stability and growth.

Potential Concerns: The Economy

Economic Nationalism vs. Free Trade

The conflicting views within the conservative camp on trade policy reflect a tension between free trade and protectionism. This inconsistency could lead to unpredictable economic policies.

Deregulation Risks

While deregulation can boost economic growth, it can also reduce consumer protections, environmental safeguards, and labor standards.

Federal Reserve’s Role

The proposed changes to the Federal Reserve’s mandate could limit its ability to respond to economic crises, potentially leading to more volatile economic cycles.

Focus on China

The strong focus on China as an economic adversary could escalate trade tensions and contribute to global economic instability.

Reduction of Government Programs

Proposals to scale back or eliminate certain government programs, like the SBA’s initiatives, could harm small businesses, especially those in disadvantaged communities.

Breaking down the concerns: The Economy

• Trade Policy Confusion: Mixed messages about free trade vs. protectionism could confuse businesses and investors.

• Deregulation Dangers: Reducing regulations might hurt consumer protections, environmental quality, and worker rights.

• Fed’s Limited Role: Narrowing the Federal Reserve’s focus could make it harder to manage the economy during downturns.

• China Focus: Strong anti-China rhetoric could lead to trade wars and economic instability.

• Cutting Programs: Reducing support for small businesses could make it harder for them to succeed, especially in challenging markets.

Red Flags in the Reforms: Analyzing Troubling Quotes

• Quote: “The next Administration must prioritize the economic prosperity of ordinary Americans. For several decades, establishment ‘elites’ have failed the citizenry by refusing to secure the border, outsourcing manufacturing to China and elsewhere, spending recklessly, regulating constantly, and generally controlling the country from the top down rather than letting it flourish from the bottom up” (Project 2025, 2024, p. 629).

  • Summarize Quote: The document criticizes establishment elites for policies that have harmed ordinary Americans, advocating for a bottom-up economic approach.

  • Explanation: This statement sets a divisive tone by blaming “establishment elites” for various economic issues. It suggests that previous policies have been detrimental and implies that a more conservative, less regulated approach would benefit ordinary citizens. The criticism of regulations and spending, combined with a call for securing the border and reducing outsourcing, points to a nationalistic and protectionist economic stance. This perspective risks alienating parts of the population and oversimplifying complex economic issues.

• Quote: “For several decades, establishment ‘elites’ have failed the citizenry by refusing to secure the border, outsourcing manufacturing to China and elsewhere, spending recklessly, regulating constantly, and generally controlling the country from the top down rather than letting it flourish from the bottom up. The proper role of government, as was articulated nearly 250 years ago, is to secure our God-given, unalienable rights in order that we might enjoy the pursuit of happiness, the benefits of free enterprise, and the blessings of liberty” (Project 2025, 2024, p 629).

  • Summarize Quote: The statement criticizes past leadership for failing to secure borders, outsourcing jobs, reckless spending, over-regulation, and centralized control. It asserts that the government’s role is to secure unalienable rights and promote free enterprise.

  • Explanation: This quote suggests a narrative that blames “establishment elites” for various perceived failures, framing these issues as a betrayal of American values. The rhetoric can be seen as an attempt to delegitimize previous administrations and justify drastic policy changes. The emphasis on securing “God-given, unalienable rights” and “free enterprise” could be interpreted as promoting a libertarian view that minimizes government intervention in the economy and social issues. This perspective may overlook the complexities of governance and the necessity of certain regulations to protect public welfare, leading to policies that could prioritize deregulation and privatization at the expense of social safety nets and environmental protections.

• Quote: “Lassman argues that the best trade policy is a humble, limited-government approach that would encourage free trade with all nations. He maintains that aggressive trade policies involve an increased government role that future leftist Administrations will utilize to push ‘climate change’ and ‘equity’-based activism” (Project 2025, 2024, p. 629).

  • Summarize Quote: Lassman advocates for a free trade policy with minimal government intervention, cautioning against using trade policies for climate or equity goals.

  • Explanation: This viewpoint promotes free trade without governmental interference, criticizing the use of trade policies to achieve social or environmental goals. While advocating for limited government aligns with conservative principles, dismissing climate change and equity as unimportant or undesirable goals can be problematic. It overlooks the potential for trade policies to advance global environmental sustainability and social justice, potentially undermining efforts to address these critical issues.

• Quote: “Finding the right approach to trade policy is key to the fortunes of everyday Americans. In Chapter 26, president of the Competitive Enterprise Institute Kent Lassman and former White House director of trade and manufacturing policy Peter Navarro debate what an effective conservative trade policy would look like. Lassman argues that the best trade policy is a humble, limited-government approach that would encourage free trade with all nations” (Project 2025, p 629).

  • Summarize Quote: The quote discusses a debate between two conservative perspectives on trade policy, highlighting a preference for a limited-government approach that encourages free trade.

  • Explanation: The promotion of a “humble, limited-government approach” suggests a preference for minimal government involvement in trade. This stance may advocate for reducing tariffs and trade barriers, potentially benefiting consumers with lower prices. However, it may also lead to reduced protections for domestic industries and workers, increasing vulnerability to global market fluctuations. The focus on free trade could undermine efforts to support local economies and address inequalities exacerbated by globalization. The debate reflects broader ideological divides within conservative economic thought, particularly regarding the balance between free market principles and protecting national interests.

• Quote: “Navarro disagrees with Lassman almost across the board. He writes, ‘Trade policy can and must play an essential role in an American manufacturing and defense industrial base renaissance,’ which he says is crucial to our country’s future” (Project 2025, 2024, p. 630).

  • Summarize Quote: Navarro argues that trade policy should actively support American manufacturing and national defense industries.

  • Explanation: Navarro’s perspective emphasizes a more interventionist trade policy to protect and revitalize American manufacturing and defense industries. This approach contrasts with Lassman’s free trade advocacy, highlighting internal disagreements within the conservative economic agenda. While supporting domestic industries can strengthen national security and economic stability, it may also lead to protectionist measures that could escalate trade tensions and disrupt global supply chains.

• Quote: “Former assistant secretary of commerce Thomas F. Gilman describes the Department of Commerce as dominated by career staff who are uninterested in implementing the President’s priorities. The department clearly needs far more political leadership, including at the Census Bureau, as Gilman notes” (Project 2025, 2024, p. 631).

  • Summarize Quote: Gilman criticizes career staff at the Department of Commerce for not aligning with presidential priorities, advocating for more political leadership.

  • Explanation: This statement criticizes career civil servants for not aligning with the administration’s political agenda, suggesting a need for increased political leadership. While political appointees can help implement a president’s vision, undermining the value of experienced career staff risks politicizing the department and reducing the effectiveness of neutral, evidence-based policymaking. It also raises concerns about the potential marginalization of non-partisan expertise in favor of ideological conformity.

• Quote: “Former White House director of the domestic policy council Paul Winfree writes in Chapter 24 that the Federal Reserve actually causes ‘inflationary and recessionary cycles.’ He says, ‘A core problem with government control of monetary policy is its exposure to two unavoidable political pressures: pressure to print money to subsidize government deficits and pressure to print money to boost the economy artificially until the next election’” (Project 2025, 2024, p. 633).

  • Summarize Quote: Winfree argues that the Federal Reserve’s actions contribute to economic cycles and are influenced by political pressures.

  • Explanation: Winfree’s critique of the Federal Reserve suggests that its policies are influenced by political motivations, which can lead to economic instability. While there is a valid concern about the Fed’s role in potentially exacerbating economic cycles, the proposed solution of removing political influence entirely may not be practical. Central banks need a degree of independence to manage the economy effectively, but they also must be accountable to the public and responsive to economic realities. The suggestion to abolish the Fed or radically alter its mandate could destabilize the financial system and reduce the government’s ability to manage economic crises.

Conclusion

The quotes from the “The Economy” subsection of Project 2025 highlight several red flags and potential impacts of the proposed economic policies. The text critiques “establishment elites” and presents a vision of economic governance that emphasizes limited government intervention, deregulation, and free trade. While these ideas align with conservative economic principles, they also pose several concerns:

• Divisive Rhetoric: The use of language that blames “establishment elites” for economic issues and frames progressive policies as harmful can deepen societal divisions and polarize public discourse. This narrative oversimplifies complex economic challenges and risks alienating those who support or benefit from certain government programs and protections.

• Deregulation and Free Trade: The emphasis on reducing regulations and promoting free trade may benefit businesses and consumers through lower costs. However, it also risks undermining consumer protections, environmental standards, and labor rights. A blanket approach to deregulation could lead to negative consequences, including financial instability, environmental degradation, and increased economic inequality.

• Trade Policy: The debate between promoting free trade and protecting domestic industries reflects a broader ideological split within the conservative economic agenda. While free trade can drive economic growth and innovation, it may also harm local industries and workers if not balanced with protective measures. On the other hand, protectionist policies may shield domestic industries but can lead to trade wars and economic inefficiencies.

• Criticism of the Federal Reserve: The critique of the Federal Reserve suggests a desire to reduce or eliminate its influence, citing concerns about political pressures leading to inflationary and recessionary cycles. While there is merit in questioning the Fed’s role and decisions, undermining its independence could destabilize the economy and reduce the government’s ability to manage economic downturns effectively.

• Political Influence in Economic Agencies: The call for increased political leadership within economic agencies, such as the Department of Commerce, raises concerns about the potential politicization of these institutions. While aligning agency actions with the administration’s priorities is important, it must be balanced with maintaining professional, non-partisan expertise to ensure sound and evidence-based policymaking.

Implications of the Immunity Ruling

The implications of the immunity ruling could exacerbate these concerns by providing a legal shield for political leaders and appointees, potentially allowing them to implement these policies without accountability. This lack of accountability could lead to more aggressive deregulation, politicization of economic agencies, and erosion of consumer protections. It may also result in policies that prioritize ideological goals over practical economic considerations, potentially harming the broader economy and increasing public distrust in government institutions.

“The Economy” in a Nutshell

Section Four of Project 2025, titled “The Economy,” outlines a range of economic policies aimed at restructuring the U.S. economy with a strong emphasis on conservative principles. The proposals focus on promoting economic nationalism, reducing government intervention, and reevaluating the U.S.’s role in global trade. While these policies are framed as necessary to protect American prosperity and security, they also raise significant concerns about potential economic isolation, increased consumer costs, and the weakening of essential public institutions.

Trade Policy and Economic Nationalism

The section advocates for a protectionist trade policy aimed at reducing trade deficits, particularly with China. The proposal includes implementing tariffs and other measures to counteract what is described as China’s “economic aggression.” However, this approach could lead to trade wars, retaliatory tariffs, and disruptions in global supply chains. While the intent is to protect American jobs and industries, the reality could be higher consumer prices, job losses in export-dependent sectors, and strained international relations.

On the other hand, some within the conservative camp argue for a more limited government approach to trade, emphasizing free trade with all nations. This perspective cautions against using trade policy to advance social or environmental goals, which they view as overreach. The debate within this section reflects a broader tension between protectionism and free trade, with significant implications for the U.S. economy’s future direction.

Tax Reform and Deregulation

The section calls for broad-based tax reform that would eliminate special-interest tax credits and deductions, simplify the tax code, and reduce marginal tax rates. While this could create a more neutral and efficient tax system, it could also disproportionately impact industries and groups that currently benefit from these incentives, such as renewable energy or low-income housing developers. The elimination of these credits could slow innovation in critical sectors and increase the tax burden on middle and lower-income individuals.

Additionally, the proposal emphasizes deregulation as a means to spur economic growth. However, this approach could reduce consumer protections, environmental safeguards, and labor standards, potentially leading to long-term negative consequences for public welfare and economic stability.

Federal Reserve Reform and Monetary Policy

A significant part of the economic plan involves reforming the Federal Reserve. The proposal suggests removing the Fed’s mandate to promote full employment and focusing solely on price stability. It also explores alternatives such as a return to the gold standard or the adoption of free banking. These changes could lead to higher unemployment during economic downturns and destabilize the financial system. The proposals reflect a desire to reduce government control over monetary policy, but they also risk increasing economic volatility and reducing the government’s ability to manage crises.

Abolishing the Export–Import Bank and Reevaluating WTO Membership

The section proposes abolishing the Export–Import Bank (EXIM), arguing that it distorts the market by favoring large, well-capitalized companies. While the intent is to eliminate what is seen as government interference in the market, abolishing EXIM could reduce the competitiveness of U.S. companies in international markets, particularly in industries where private financing is insufficient.

Similarly, the proposal calls for a reevaluation of U.S. membership in the World Trade Organization (WTO), suggesting that the U.S. consider withdrawing if reforms are not made. Exiting the WTO could isolate the U.S. from global trade networks, increase tariffs, and harm U.S. businesses and consumers. The potential for increased economic isolation and protectionism could have far-reaching consequences for the U.S. economy and its role in the global market.

Concerns and Potential Consequences

The economic policies outlined in this section prioritize reducing government intervention and promoting economic nationalism. However, these proposals come with significant risks:

1. Economic Isolation: The focus on protectionism and potential withdrawal from international organizations like the WTO could isolate the U.S. from global trade networks, leading to higher costs for consumers and reduced competitiveness for U.S. businesses.

2. Increased Consumer Costs: The implementation of tariffs and the reduction of tax credits could lead to higher prices for goods and services, disproportionately affecting middle and lower-income individuals.

3. Weakened Public Institutions: The push for deregulation and the potential abolition of institutions like the Federal Reserve and EXIM could weaken public oversight and reduce the effectiveness of essential economic policies.

4. Trade Wars and Global Instability: An aggressive trade policy could trigger retaliatory measures from other countries, leading to trade wars and increased global economic instability.

5. Economic Volatility: The proposed changes to the Federal Reserve’s mandate and monetary policy could increase economic volatility, making it harder to manage economic downturns and protect public welfare.

Final Thoughts

Overall, the economic proposals in Project 2025 reflect a strong commitment to conservative principles, but they also raise serious concerns about the potential for increased economic instability, higher consumer costs, and reduced access to essential public services. The emphasis on reducing government intervention and promoting economic nationalism may appeal to certain segments of the population, but the broader implications for the U.S. economy and its global standing warrant careful consideration and public debate.