I like the outline of the problem and I hope your version of the soft landing can be achieved. But in policy terms, I think there are is a few things I would like to note: 1) I don't think currency interventions are necessary or recommended, especially if many other policies are right. 2) Tariffs do not change the trade balance, only the savings investment balance does that. Therefore, your emphasis on federal borrowing and debt makes sense.
But so far the Trump Administration and Congressional Republicans have shown no desire to lower deficits, on the contrary. The so-called DOGE effort has so far yielded no significant savings from spending; and the recently passed Budget Resolution envisions an increase of $3.5 trillion of debt over 10 years (from a base of about $25 trillion).
I like the outline of the problem and I hope your version of the soft landing can be achieved. But in policy terms, I think there are is a few things I would like to note: 1) I don't think currency interventions are necessary or recommended, especially if many other policies are right. 2) Tariffs do not change the trade balance, only the savings investment balance does that. Therefore, your emphasis on federal borrowing and debt makes sense.
But so far the Trump Administration and Congressional Republicans have shown no desire to lower deficits, on the contrary. The so-called DOGE effort has so far yielded no significant savings from spending; and the recently passed Budget Resolution envisions an increase of $3.5 trillion of debt over 10 years (from a base of about $25 trillion).