
Is Trump taking a ‘liquidationist’ approach to the economy?
Live MintDuring President Trump’s first term, stocks rode high on the belief that he would always pull back on policies that led to a selloff. Indeed, such views edge close to the “liquidationist" approach historically espoused by laissez-faire economists, and most infamously associated with former President Herbert Hoover’s Treasury secretary who advised him to let the economy fall. Trump and his advisers, conversely, are focused on cutting the federal workforce and slashing spending to narrow the government’s whopping budget deficit, which in 2024 amounted to more than 6% of gross domestic product. Could the Trump administration feasibly engineer a more sustained domestic-investment boom through its efforts to reshore production, particularly if the U.S.’s wide trade deficit narrows? It isn’t just the full-on liquidationist policies attempted after the Great Depression that have a poor record: Austerity drives also failed in Greece and most European countries following the euro crisis.
History of this topic

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