The administration's primary goal is to lower the deficit-to-GDP ratio to 3-3.5% by 2028. The strategy rejects austerity, instead focusing on boosting GDP growth via deregulation, tax cuts, and cheap energy, which is expected to increase overall tax revenue even with lower rates.
A key lever for growth is the systematic dismantling of regulations, described as a 'regulatory corset,' particularly on the financial sector. The goal is to shift lending from private credit back to the regulated banking system and to lower energy costs by removing barriers to production.
Led by business executives like Elon Musk and Doug Burgum, DOGE is tasked with a root-and-branch review of federal spending to eliminate waste, fraud, and abuse. The primary targets are inefficient processes and overpriced government contractors, not essential public services.
The administration plans to establish a sovereign wealth fund to create and manage assets for the American people. This fund would be seeded with proceeds from privatizing federal assets, such as land and stakes in Fannie Mae/Freddie Mac, aiming for higher returns than simply paying down debt.
The plan involves using tariffs strategically to create economic incentives for onshoring manufacturing jobs. This is part of a broader effort to reinvigorate the American middle class by prioritizing domestic production over cheap imported goods.
Keep pulling the thread on Scott Bessent.