Business
STEPHEN MOORE: Trump Should Cut the Pork Politicians Adore Most

By Stephen Moore
In a reflective moment before his passing in 2006, economist Milton Friedman shared insights on boosting American prosperity during a dinner interview in San Francisco. His recommendations were clear: implement universal school choice, enhance free trade, and crucially, reduce government spending. These principles resonate today, underscoring the persistent issues stemming from expanding government influence.
The link between inflation and government spending is striking. Historically, major inflationary periods align with significant increases in federal expenditure. For instance, the inflation surge during the 1970s coincided with the expansive policies of President Lyndon B. Johnson’s “war on poverty.” More recently, the fiscal response to COVID-19 saw spending soar under both former President Trump and President Biden, resulting in a rapid increase in the Consumer Price Index.
Critics maintain that excessive government spending drives inflation, a theory seemingly validated by recent economic trends. Federal Reserve money printing financed these spending sprees, leading to rising prices. Notably, a group of award-winning economists previously downplayed inflation risks tied to Biden’s spending initiatives.
As the current fiscal year unfolds, federal spending continues on an unprecedented trajectory, projected to reach $7 trillion while borrowing an additional $2 trillion. This unsustainable fiscal path may escalate the federal budget to $10 trillion over the next decade, posing severe economic risks.
With the prospect of financial turmoil looming, immediate steps are necessary. A potential remedy lies in rescinding up to $500 billion in unspent appropriations introduced by the previous Congress. Prioritizing cuts in green energy subsidies could yield significant savings, questioning the rationale for ongoing COVID-related expenditures.
Eliminating wasteful corporate welfare programs, such as those benefiting companies like Intel under the CHIPS Act, also merits consideration. Early efforts by the “Department of Government Efficiency” are revealing areas ripe for budgetary cuts.
These measures are vital, especially given the ongoing threat of inflation. Since the Federal Reserve’s interest rate reductions began in October, commodity prices have risen nearly 5%, and mortgage rates have surged to 7%. This mixture of low-interest borrowing and expansive government spending creates a precarious economic environment.
Should inflation resurface, it could undermine Trump’s support rapidly. His previous approval ratings could plummet if everyday expenses for consumers begin to rise once more.
Addressing spending reduction will encounter resistance not only from opposing parties but also from certain members within Trump’s own party, who might protect local funding for green projects. Thus, it is essential for Trump, in his inaugural address, to declare a commitment to downsizing government, presenting it as a moral obligation akin to warfare. Emphasizing the principles articulated by Friedman in “Capitalism and Freedom” could significantly shift the political landscape.
Originally published by the Daily Caller News Foundation.
Stephen Moore is a contributor to The Daily Caller News Foundation and a visiting fellow at the Heritage Foundation. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”