| Donald Trump is attempting what amounts to shock therapy for the US economy. Much of the attention so far has been on the tariffs the president is rolling out, which would represent the largest increase in import taxes seen since the 1930s. There’s another pillar of Trump’s economic policy worth putting in context, though. As my colleague Ted Mann and I write today, the Elon Musk-led campaign to slice $1 trillion out of the government is historically bold. Musk’s target of cutting what amounts to 3% of GDP from federal spending in a year would be the largest since at least 1930 other than the pullbacks after World War II and after the pandemic. It also, economists tell us, would outpace the velocity of Margaret Thatcher’s 1980s austerity campaign for the UK. The Iron Lady’s attack on the British public sector in the name of closing deficits and bringing down inflation, you may remember, led to a recession for which Thatcher was unrepentant. And there are some signs already that Trump is similarly willing to weather turmoil in financial markets – and possibly even a recession – in the name of his grander vision for the US economy. Markets “are going to go up and they’re going to go down. But you know what, we have to rebuild our country,” he said yesterday. He also said he doesn’t see a recession coming. There also are signs that Musk and others in the administration are ideologically all-in on reducing the size of government. Musk’s companies benefit from that public spending. But the world’s richest man also has expressed a deep disdain for government that goes beyond the regulators who oversee his enterprises. And Treasury Secretary Scott Bessent recently declared in a CNBC interview that the economy needed to go through a “detox period” to get off its addiction to government spending. The thing often missing from those discussions is the economic consequences. “The federal government is an important part of the United States economy, and if you rip out a big chunk of that it’s going to have ripple effects,” Martha Gimbel, executive director of the Budget Lab at Yale, told me. “Even if you’re doing these things in a way that gives people time to adjust, it’s still going to be really painful.” Which is worth thinking more about, especially a few months after an election in which voters put the economy top of their list of concerns and elected the candidate who was promising an age of prosperity. — Shawn Donnan | 
