Trump's "Three Arrows" Plan: Can It Hit the Bullseye for America's Economy?

Arrow One: Growth Beyond 3% – Aiming High

Bessent’s first arrow targets sustained annual real GDP growth of 3% or more. While this may seem modest, it represents a significant leap from the 2.2% average growth that defined the U.S. economy from 2009 to 2019. Economists estimate the U.S.’s potential growth rate at 3.2%, meaning the plan seeks to close the gap on untapped economic capacity.

Consider the Reagan era, from 1983 to 1986, when the economy expanded at an average annual rate of over 5%. Such growth isn’t just a pipedream—it’s backed by historical precedent and could add trillions of dollars to the economy. Importantly, this focus on "real growth" excludes inflation, which ensures wage increases retain their value. In tandem, nominal growth (real growth plus inflation) provides critical leverage in reducing the real burden of the national debt.

Arrow Two: Deficit Discipline – Keeping It Under 3% of GDP

The second arrow seeks to cap annual deficits at 3% of GDP. While it doesn’t mean paying down the national debt, it reins in ballooning deficits that have shaken global confidence in the U.S. dollar. To put this in perspective, fiscal year 2024’s deficit sits at $1.83 trillion. Under Bessent’s plan, this would be slashed to $840 billion—a staggering 54% reduction.

The strategy relies not just on spending cuts but also on economic growth to increase federal revenues without hiking tax rates. Tariffs, often dismissed as a relic of the past, make a comeback here. With $3.5 trillion in annual imports, modest tariffs could generate $175 billion annually—covering a significant chunk of the deficit gap.

The message is clear: aligning nominal GDP growth (5%) with a controlled deficit (3% of GDP) gradually decreases the debt-to-GDP ratio. This financial maneuver restores fiscal sustainability without suffocating the economy.

Arrow Three: Tariffs and Strategic Growth – America First in Action

Bessent’s third arrow leans heavily on tariffs and economic self-reliance. This approach harks back to a pre-1913 America when tariffs, excise taxes, and borrowing financed government operations. Reviving this model could not only strengthen domestic industries but also ensure consistent revenue streams for federal coffers.

Combined with structural efficiency reforms, like those overseen by Elon Musk and Vivek Ramaswamy’s Department of Government Efficiency (DOGE), this arrow targets the root of government bloat. While slashing wasteful spending won’t be easy, aligning it with revenue growth from trade offers a path toward fiscal discipline.

Can Trump’s Three Arrows Fly Straight?

The "Three Arrows" plan promises a dynamic mix of fiscal restraint and economic revitalization. Its success hinges on whether growth targets are achievable, waste can be meaningfully reduced, and tariffs strategically applied without triggering a trade war. It’s a bold move in an era of economic uncertainty, but boldness may be exactly what America needs.

To prepare for the financial upheaval these changes could bring, safeguard your wealth with tangible assets like gold, silver, and cryptocurrencies. For practical steps, download Bill Brocius’ eBook, "7 Steps to Protect Your Account from Bank Failure," here.

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