This researched was published on January 25, 2025

With the inauguration just a few days away, the incoming administration will soon have to transition from campaign rhetoric to the substance of economic policymaking. Casting the economy as a “disaster” was electorally effective, yet no freshly elected president has entered office with a stronger economic backdrop in recent history.

President-elect Donald Trump has ambition to reshape the economy and a strong mandate to roll out new policies. Yet, Winston Churchill’s apocryphal adage that politicians should “never let a good crisis go to waste” would be a risky proposition once we recognize that the “disaster” is in fact a substantial macroeconomic inheritance. Growing, spending, or squandering that endowment are therefore all on the table.