Kamala Harris was defeated, and Donald Trump won, primarily because of the failure of Bidenomics.  Of course, there were other issues, such as an open southern border, weak foreign policy, and woke culture, but inflation is the main reason for Trump’s victory. The working class, Trump’s main supporters, have been badly hurt by the rapid rise of inflation that has exceeded wage gains since it took off right after Biden took office in January, 2021. The consumer price index (CPI) is now down to 2.6% (October 2024), but this is not good enough, and inflation has not yet been licked. The problem, of course, is continuing huge federal deficit spending, which reached $1.8 trillion for FY 2024 just ended.

The Federal Reserve can’t control inflation by itself.  Its only tool is raising short-term interest rates which are already quite high.  Trump is apparently unwilling to reform the entitlements, Social Security and Medicare, where big savings could be found.  Furthermore, he is threatening to raise tariffs around the world, which, of course, means raising the prices that Americans pay for many basic commodities.

Inflation will not be subdued, in a sustainable way, until federal deficit spending is greatly reduced.  Trump and Republicans, in general, want to keep taxes low, and, in particular, renew the 2017 major tax reform from Trump’s first term.  This is a good idea because it will stimulate the economy and make it grow faster, thereby boosting employment and wages.  But this means that the only way to reduce the deficit is to cut federal spending.

This is where DOGE (Department of Government Efficiency), to be headed by Elon Musk and Vivek Ramaswamy, comes in:

• Simply ending remote work for the federal workforce’s 2,000,000 employees could make a big difference. 17 federal agencies had less than 25% utilization of their headquarters buildings in 2023.  Requiring all federal employees to work full-time in their assigned offices would likely lead to a huge number of resignations, saving hundreds of billions of dollars every year.
• Repealing the grossly misnamed Inflation Reduction Act would save $100 billion a year for many years to come.  Of course, it would also repeal one of Biden’s worst attempts at implementing a harmful industrial policy.

Conclusion.  To be a successful President, Donald Trump must keep inflation subdued which can only be accomplished by slashing federal spending.  His best chance of doing this is by unleashing his DOGE team, Musk and Ramaswamy, on the federal bureaucracy.  There are hundreds of billions of dollars to be saved in this way if DOGE is effective.

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