Although I am trying to give Trump the benefit of the doubt, there are some problems with his economic vision thus far:

First, Trump is falling into the stimulus trap of creating short-term results at long-term expense: Economist Explains Why Trump Infrastructure Plan Will Be A Disaster For The Economy

Trump’s infrastructure plan is another buy now pay later short-term gimmick that will cost the economy dearly in years to come.

Financial media pundits say that stocks are rising because Trump’s proposals will stimulate the economy, and maybe the economy will be stimulated a little, but stimulus will also create inflation. As of November 9th, the US stock market has gained about 1%, but treasury bonds have lost 3-6% depending on maturity, indicating that Trump’s stimulus may be more inflationary than expansionary. Although some stimulus is more expansionary than others, virtually all stimulus programs create more inflation than growth. The only possible exception were the 2008 bank bailouts, which was more like monetary policy than fiscal policy. Although Trump’s defense and tax cuts will create wealth for some sectors, it may destroy wealth, too, like we have seen with the recent treasury bond rout that has destroyed over a trillion dollars of wealth (a figure that is growing with each passing day as treasury bonds keep falling with no bottom in sight). This trade-off between debt and wealth is explored in more detail in a famous paper by anti-Keynesian economist Robert Barro, Are government bonds net wealth?, which argues that short-term expansion comes at a cost of long-term wealth in the interest paid on the debt.

Trump is like a right-wing version of FDR or Obama – a lot of spending and populism, and the two often go hand in hand. It costs money to make things change, to reverse the massive ocean liner that is analogous to the US economy and government. The funny thing is, every single right-wing pundit since 2008 (such as Peter Schiff) said Obama would cause bond-destroying inflation, but it’s Trump, not Obama, who is causing the sudden concern over inflation. Who would have seen that coming. I didn’t (had I known Trump would cause such knee-jerk bond selling I would have sold my bonds last week and bought them back later). This is another example of why it’s so hard to predict things. A mystery is why left-wing spending (Obamacare, food stamps, etc.) hasn’t hurt the bond market. One possible explanation is that it’s not expansionary. If a stimulus program is perceived as expansionary, it causes the bond market to initially react more negatively than is justified. When the anticipated growth fails to materialize, bonds recover.

Second, if Trump wants to grow the economy, he cannot do it by attacking one of the most important and strongest sectors of the economy, the technology sector. Since 2009, the technology sector has seen the strongest growth of all the major sectors of the S&P 500. Companies like Facebook, Google, and Amazon create billions of dollars of economic value through commerce that passes though their platforms. Trump needs to dial down the anti-technology, anti-monopoly, anti-trade rhetoric, and should make peace with Amazon and Silicon Valley.

Also, as explained above, all this stimulus costs money. Who is going to buy the debt? Foreigners, who own approximately 15% or more of the national debt, will – which is another reason to cool the anti-trade, anti-globalization rhetoric if Trump wants to be a big spender. Also these defense companies depend on exports. It’s almost impossible an isolationist, a protectionist, and a big spender at the same time. Ron Paul and others paleocons know this, choosing protectionism, isolationism, and balanced budgets. But you cannot have all three.