When Hasan Minhaj asked Nobel Prize-winning economist Paul Krugman whether voters should believe politicians who promise to \u201cbring prices down,\u201d Krugman was blunt.<\/p>\n
\u201cAny politician who promises to bring prices way down is either ignorant or lying, or both,\u201d he said on Minhaj\u2019s podcast (1).<\/p>\n
It\u2019s a blunt warning aimed squarely at the kind of sweeping affordability pledge Donald Trump has made central to his political brand.<\/p>\n
In the Minhaj interview, Krugman walks through a basic but often-misunderstood point: prices rarely go down \u2014 and usually shouldn\u2019t.<\/p>\n
He notes that outside of rare and painful episodes, such as the Great Depression, countries like the U.S. experience inflation, not deflation. Central banks, including the Federal Reserve, deliberately target a low, positive inflation rate of about 2% a year (2). The economy tends to function better with slowly rising prices than with flat or falling prices.<\/p>\n
Deflation, Krugman reminds viewers, is \u201ca terrible thing\u201d. It\u2019s associated with deep slumps, debt crises and lost decades.<\/p>\n
Crucially, the Fed steers the overall price level. A committee of central bankers sets interest rates and manages the money supply largely independent of the White House.<\/p>\n
When a candidate promises to \u201crapidly drive prices down\u201d everywhere from groceries to homes, Krugman argues they\u2019re either oversimplifying something they don\u2019t understand, or banking on the fact that voters don\u2019t.<\/p>\n
Read More: This top market strategist reveals the market trends you can\u2019t ignore \u2014 and how to position your portfolio to stay ahead in 2026<\/a><\/strong><\/p>\n Congressman Lloyd Doggett\u2019s \u201cTrump\u2019s Economic Promises Timeline\u201d (3) collects just how far Trump has gone on affordability rhetoric.<\/p>\n Among the highlights:<\/p>\n Under my administration, we will be slashing energy and electricity prices by half within 12 months, at a maximum of 18 months,\u201d PBS NewsHour, Trump rally in North Carolina (August 14, 2024). (4)<\/p>\n<\/li>\n \u201cWhile working Americans catch up, we are going to put a temporary cap on credit card interest rates at 10%. People are being made to pay 25%. Temporary ban.\u201d Speech: Donald Trump campaign rally in Erie, Pennsylvania (September 29, 2024). (5)<\/p>\n<\/li>\n \u201cA vote for Trump means your groceries will be cheaper.\u201d President Trump campaigns in Pittsburgh. (6)<\/p>\n<\/li>\n<\/ul>\n Once back in office, Trump largely shelved the \u201cmake America affordable again\u201d slogan \u2014 until recent elections (7), where Democrats over-performed, and affordability emerged as a top issue.<\/p>\n The White House is trying to pivot. According to a recent NPR report (8), Trump has resumed promising to \u201clower the cost of living\u201d and will travel across the country to tout his plan. Polls show (9) voters blame his policy for making the economy worse.<\/p>\n The numbers help explain why voters are unconvinced. Inflation has run around 3% this year (10). It\u2019s far from the double-digit spikes of the 1970s, but still enough to keep everyday prices marching higher.<\/p>\n Some items are cheaper than when Trump returned to office, but others \u2014 such as coffee and ground beef \u2014 remain significantly more expensive (11).<\/p>\n If sweeping political promises are unlikely to deliver cheap groceries and rent, what can Americans do to protect themselves?<\/p>\n Economists and financial planners tend to come back to a few practical themes:<\/p>\n Audit your spending:<\/strong> Go line by line through a month or two of bank and credit card statements. Identify subscriptions, fees and impulse categories you genuinely wouldn\u2019t miss, and cut or downgrade them first.<\/p>\n<\/li>\n Attack high-interest debt:<\/strong> Credit card APRs in the 20 to 30% range are one of the most punishing ways inflation shows up in daily life. Prioritizing high-interest debts often delivers the most significant \u201creturn\u201d on any extra dollar you can free up.<\/p>\n<\/li>\n Build a small cash buffer:<\/strong> Even a modest emergency fund can keep a surprise bill from turning into new high-interest debt the next time a car repair or medical co-pay hits.<\/p>\n<\/li>\n Inflation-proof your long-term savings:<\/strong> Steer savings toward diversified stock or index funds, which historically have outpaced inflation over long periods.<\/p>\n<\/li>\n Invest in earning power:<\/strong> Training, certifications or skills that allow you to move into higher-paying roles are one of the few ways to beat rising prices over a lifetime.<\/p>\n<\/li>\n<\/ul>\n In an economy built around steady inflation, the most realistic path is to find ways to keep your income, savings and debt management ahead of the slow, relentless rise.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n YouTube (1<\/a>); Webull (2<\/a>); Lloyd Doggett (3<\/a>); YouTube (4<\/a>); Roll Call (5<\/a>); C-SPAN (6<\/a>); Prairie Public Newsroom (7<\/a>); NPR (8<\/a>); LAist (9<\/a>); Trading Economics (10<\/a>); WPRL (11<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"When Hasan Minhaj asked Nobel Prize-winning economist Paul Krugman whether voters should believe politicians who promise to \u201cbring…\n","protected":false},"author":2,"featured_media":213614,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[26727,79,1400,356,179,18,13916,43325,19,20662,17,9791,18881,55497,13275,121],"class_list":{"0":"post-213613","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-affordability","9":"tag-business","10":"tag-dave-ramsey","11":"tag-donald-trump","12":"tag-economy","13":"tag-eire","14":"tag-electricity-prices","15":"tag-hasan-minhaj","16":"tag-ie","17":"tag-inflation-rate","18":"tag-ireland","19":"tag-jeff-bezos","20":"tag-paul-krugman","21":"tag-rising-prices","22":"tag-white-house","23":"tag-youtube"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115657035162686485","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/213613","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=213613"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/213613\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/213614"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=213613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=213613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=213613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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