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Trump’s Big Economic Promises: Why They Sound Good but Won’t Work
President Donald Trump has been making headlines again as he approaches his one-year anniversary. From banning institutions from buying real estate, to capping credit card interest rates, to talking about firing Jerome Powell, the message is clear: “I’m here to fix the economy.”
The problem? None of these ideas actually solve the real issues and some of them could make things much worse.
Before you tune out, let me be clear about something. This isn’t a pro-Trump or anti-Trump piece. I’m not interested in politics as a team sport. I’m interested in economics, incentives, and consequences. If you want to understand what’s really happening with money, housing, and credit, you have to turn off the emotional political filter and actually think through the outcomes.
Let’s break this down point by point.
Can Trump Fire Jerome Powell and Would It Matter?
Short answer: no, and no.
Even if Jerome Powell were removed as Chair of the Federal Reserve, he would still likely remain on the Federal Reserve Board. More importantly, Powell does not unilaterally control interest rates. Rates are decided by a committee of Fed presidents who vote collectively.
So the idea that firing Powell would suddenly drop interest rates or make mortgages affordable again is pure fantasy. It sounds good in a headline, but it does nothing in practice.
What concerns me more is the broader idea floating around that the president should have more control over the Federal Reserve. The Fed was designed to be independent for a reason. Once politics fully controls monetary policy, you lose checks and balances, and history shows that ends badly.
Are Institutions Really the Reason Housing Got So Expensive?
This is one of the most repeated and misunderstood claims out there.
Large institutions buying single-family homes account for roughly 1–3% of total transactions. Yes, in some hot markets they had an impact. But they were not the primary driver of the massive price increases we saw from 2020 through 2022.
I know this because I lived it.
In 2021, when I was buying a home, I wasn’t competing against faceless institutions. I was competing against other families real people getting into bidding wars. In one case, I offered more than the highest bid, only to walk away when the appraisal came in $150,000 lower than my offer.
What actually drove prices higher?
- Massive liquidity injected into the economy
- Ultra-low interest rates
- Stimulus checks, PPP loans, and expanded credits
- Supply chain disruptions
- Exploding labor and construction costs
When money is cheap and plentiful, prices rise. That’s not an institutional conspiracy it’s basic economics.
Banning institutions from buying homes doesn’t fix affordability. Those dollars just flow somewhere else, potentially creating bubbles in other asset classes. The root cause wasn’t institutions. It was policy.
The Credit Card Interest Rate Cap: A Dangerous Idea
Now let’s talk about the proposal to cap credit card interest rates at 10%.
At first glance, this sounds compassionate. Credit card rates can exceed 25–30%, and that’s painful for consumers. But this is where unintended consequences come into play.
Credit cards are unsecured debt. There’s no house, no car, no asset backing the loan. If someone defaults, the bank often recovers pennies on the dollar if anything.
Higher risk demands higher returns. That’s not greed; that’s math.
If you cap rates too low, banks don’t suddenly become nicer. They reduce risk. And how do they do that?
- They stop lending to lower-income borrowers
- They tighten credit requirements
- They eliminate access to credit for people who need it most
When credit dries up, spending slows. When spending slows, businesses lay people off. When layoffs increase, defaults rise. When defaults rise, markets react—and not in a good way.
We’ve seen this movie before. In the 1970s, price controls in the oil market led to shortages, lines at gas stations, and higher prices not relief. The same thing happens when you interfere with credit markets.
Ironically, credit availability is one of the only things keeping the economy moving right now. Restrict it, and you accelerate the downturn everyone claims they’re trying to avoid.
The Real Issue Isn’t Interest Rates It’s Inflation
Here’s the truth that rarely gets discussed: lowering interest rates or capping them doesn’t fix the core problem.
The real problem is that inflation has outpaced wages for years. People aren’t struggling because credit cards exist. They’re struggling because the cost of living has exploded housing, food, insurance, energy while incomes haven’t kept up.
If you lower rates but keep inflation high, people don’t magically become disciplined. Most just spend more. That’s human behavior. Without addressing inflation and productivity, you’re treating symptoms, not the disease.
What Actually Builds a Strong Economy
A strong economy depends on two things:
- Availability of credit
- Velocity of money
When money flows freely and changes hands quickly, economic activity increases even with finite resources. When credit freezes, everything slows, asset prices fall, and recessions deepen.
That’s exactly what happened during the Great Financial Crisis. Banks stopped lending, and the economy seized up.
Policies that restrict exchange, limit credit, or manipulate prices don’t create prosperity. They destroy it.
My Advice Moving Forward
Don’t get caught up in headlines. Don’t outsource your thinking to politicians, influencers, or news cycles. Soundbites are cheap. Consequences are not.
If your goal is to become work optional to build passive income that gives you freedom regardless of who’s in office you need strategies rooted in fundamentals, not politics.
Understand cashflow. Control inflation risk. Position yourself so policy changes don’t dictate your future.
Politics will always change. Sound money principles don’t.
Make it a prosperous week and an intentional life.