Among wealthy countries, only Spain will experience faster growth this year, according to the International Monetary Fund's forecast. The United States is the economic “envy of the world," the Economist magazine recently declared.

The Federal Reserve is so confident that U.S. inflation is slowing toward its 2% target that it cut its benchmark rate in September and again this week.

Americans are deeply unhappy with prices

Consumers, though, still bear the scars of the inflationary surge. Prices on average are still 19% higher than they were before inflation began to accelerate in 2021. Grocery bills and rent hikes are still causing hardships, especially for lower-income households. Though inflation-adjusted hourly wages have risen for more than two years, they're still below where they were before President Joe Biden took office.

Voters took their frustration to the polls. According to AP VoteCast, a sweeping survey of more than 120,000 voters nationwide, 3 in 10 voters said their family was “falling behind’’ financially, up from 2 in 10 in 2020. About 9 in 10 voters were at least somewhat worried about the cost of groceries, 8 in 10 about the cost of healthcare, housing or gasoline.

“I don’t think it’s either deep or complicated,’’ Holtz-Eakin said. “The real problem is the Biden-Harris team made people worse off, and they were very angry about it, and we saw the result.’’

The irony is that mainstream economists fear Trump’s remedies will make price levels worse, not better.

Tariffs are a tax on consumers

The centerpiece of Trump’s economic agenda is taxing imports . It's an approach that he asserts will shrink America’s trade deficits and force other countries to grant concessions to the United States. In his first term, he increased tariffs on Chinese goods, and he’s now promised much more of the same: Trump wants to raise tariffs on Chinese goods to 60% and impose a “universal’’ tax of 10% or 20% on all other imports.

Trump insists that other countries pay tariffs. In fact, American companies pay them — and then typically pass along their higher costs to their customers via higher prices. Which is why taxing imports is normally inflationary . Worse, other countries usually retaliate with tariffs on American goods, thereby hurting U.S. exporters.

Kimberly Clausing and Mary Lovely of the Peterson Institute have calculated that Trump’s proposed 60% tax on Chinese imports and his high-end 20% tariff on everything else would impose an after-tax loss on a typical American household of $2,600 annually.

The economic damage would likely spread globally. Researchers at Capital Economics have calculated that a 10% U.S. tariff would hurt Mexico hardest. Germany and China would also suffer. All of that depends, of course, on whether he actually does what he said during the campaign.

Deportations would rattle the US job market

Trump has threatened to deport millions of undocumented immigrants , potentially undermining one of the factors that allowed the United States to tame inflation without falling into recession.

The Congressional Budget Office reported that net immigration — arrivals minus departures — reached 3.3 million in 2023. Employers needed the new arrivals. After the economy rebounded from the pandemic recession, companies struggled to hire enough workers, especially because so many native-born baby boomers were retiring.

Immigrants filled the gap. Over the past four years, 73% of those who entered the labor force were foreign born.

Economists Wendy Edelberg and Tara Watson of the Brookings Institution’s Hamilton Project found that by raising the supply of workers, the influx of immigrants allowed the United States to generate jobs without overheating and accelerating inflation.

The Peterson Institute calculates that the deportation of all 8.3 million immigrants believed to be working illegally in the United States would slash U.S. GDP by $5.1 trillion and raise inflation by 9.1 percentage points by 2028

Big tax cuts could swell the federal deficit

Trump has proposed extending 2017 tax cuts for individuals that were set to expire after 2025 and restoring tax breaks for businesses that were being reduced. He's also called for ending taxes on Social Security benefits, overtime pay and tips as well as further reducing the corporate income tax rate for U.S. manufacturers.

The University of Pennsylvania’s Penn Wharton Budget Model estimates that Trump’s tax policies would i ncrease budget deficits by $5.8 trillion over 10 years. Even if the tax cuts generated enough growth to recoup some of the lost tax revenue, Penn Wharton calculated, deficits would still increase by more than $4.1 trillion from 2025 through 2034.

The federal budget is already out of balance. An aging population has required increased spending on Social Security and Medicare. And past tax cuts have shrunk government revenue.

Holtz-Eakin said he worries that Trump has little appetite for taking the steps — cuts to Social Security and Medicare, tax increases or some combination — needed to bring the federal budget meaningfully closer to balance.

“It’s not going to happen," Holtz-Eakin said.