Trump’s Coolidge Moment

‘I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical form.’Those words, uttered by President Coolidge at his inaugural 100 years ago, are top of mind as President-elect Trump prepares to be sworn to the parchment. Trump has been lofted back into office after a campaign during which he announced a program of government spending cuts — something that has proven difficult for every president since Coolidge’s day. Trump could do worse than to hang Coolidge’s quote in every federal office.More than any other candidate since Coolidge, after all, Trump is prioritizing spending cuts. He’s named the world’s wealthiest man, Elon Musk, to create, outside of government, a department to spearhead the task. Mr. Musk and Vivek Ramaswamy aim to cut $2 trillion from the federal budget, including some $500 billion “in annual federal expenditures that are unauthorized by Congress or being used in ways that Congress never intended.”When it comes to budget cuts, Coolidge’s record beckons Messrs. Musk and Ramaswamy — and Trump. Coolidge, together with his budget director, General Dawes, slashed federal spending with scrutiny on waste. Uncle Sam in 1920 spent $6.4 billion* and the debt, swollen by the war, had surged to some $25 billion. Coolidge’s spending cuts brought the budget down to $2.9 billion by 1925. The cuts were matched by deregulation and tax rate reduction.Coolidge’s supply-side agenda spurred growth and, prefiguring the Laffer Curve, more than doubled the revenue from taxpayers earning more than $100,000 a year. After cutting spending and taxes — indeed, Coolidge was careful to cut spending first to pave the way for tax cuts — there was a budget surplus under Coolidge’s tenure. As a wise steward of the national fisc, Coolidge used it to pay down federal debt, which fell to some $17 billion. We don’t want to take too far the similarities between the Coolidge years and the circumstances facing Trump. Today’s federal budget and debt are vastly larger, nominally and proportionally, than the 1920s. The annual interest alone on the national debt now exceeds defense spending. Plus, too, welfare and entitlement programs like Social Security and Medicare take up roughly half of the federal budget, and Trump has vowed not to trim these expenditures.All the more reason, then, to embrace Coolidge’s “policy of economy.” Economist Stephen Moore warns that President Biden’s overspending threatens to destroy Trump’s presidency before it begins. Three months into fiscal 2025, Mr. Moore warns, America is “on pace to spend an all-time-high $7 trillion and borrow $2 trillion.” He urges Trump to call for $500 billion in rescissions — funds that Congress authorized but that have not yet been spent.Better yet if President-elect Trump uses his second inaugural to signal a revival of Coolidge’s pro-free market, limited-government principles. The 30th president’s address, after all, was, historian Edmund Fawcett has noted, a landmark in 20th-century conservative thought. That’s in part because of Coolidge’s warning that thrift is as important to citizens as it was to governments: “The result of economic dissipation to a nation is always moral decay.”Yet Coolidge was “talking in ways that were about to be cast aside,” Mr. Fawcett says in his history of conservatism. Within a few years, the New Deal would usher in decades of collectivism, a default of the dollar, and a resurgence of federal debt and high taxes. Trump has won a chance to reverse some of those trends and return to the home truths sounded by Coolidge a century ago. An appreciation of the morality of “economy” would be a place to begin._______* Each of those dollars was convertible into a 20.67th of an ounce of gold. Today one would be lucky if a greenback would fetch a 2,657th of an ounce of gold.

Trump’s Coolidge Moment

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