Donald Trump is entering office with massive schemes that have his supporters energized and opponents bracing for a fight, like mass deportations of millions of people and a plan with tech billionaire Elon Musk to cut $2 trillion from the federal budget. But experts think it's all vaporware, reported The Daily Beast on Tuesday.
According to the report, Wall Street analysts are already expecting the cuts will be modest, if anything. "Four in 10 investors, the most to respond to any option, said they expect Musk will find insignificant or modest spending cuts at best, Goldman Sachs said. Experts have also questioned Musk’s plans, given that interest payments, which can’t be cut, account for 13 percent of the budget, and Trump has promised not to touch major entitlement programs like Social Security and Medicare, which account for half of all government spending."
Harvard economist Jeffrey Frankel had a blunt view: “This goal — which amounts to 31 percent of annual US spending, and 7 percent of US GDP — is sheer fantasy. Say they go fully draconian — starting by abolishing the Department of Education altogether, as Trump has pledged to do. This would reduce total spending by 4 percent.”
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This aligns with a previous Washington Post fact check revealing Musk's pledges through the task force known as the "Department of Government Efficiency" are impossible.
Likewise, Trump's deportation schemes look a lot flimsier up close, because executive orders can only make changes to existing removal programs; he would need Congress to approve something as big as what he's proposing, and he has a razor-thin House majority that will be able to do little. Moreover, "Any action is also expected to be met with legal challenges. California’s legislature convened for a special session Monday to discuss a proposed $25 million legal fund to 'Trump-proof' the state."
For that reason, Wall Street is also betting on immigration trends not changing all that much, said the report: "Over a fifth of investors told Goldman they think immigration under Trump will exceed the pre-pandemic rate of roughly 1 million per year."
