The Trump economic war plan is the weapon on the table, and Bannon picks it up piece by piece as LaVorgna explains how it blows apart the old globalist economy.
WATCH THE CLIP BELOW:
This clip aired on WarRoom’s morning show on November 14, 2025. Transcript begins below (lightly edited for clarity; may contain minor errors).
STEVE BANNON (HOST): Joe, give us Treasury because everybody is talking about affordability. Affordability obviously important, but growth, jobs, GDP growth, all of it is the most important. What is your perspective from Treasury, sir?
JOE LAVORGNA (GUEST): Thank you, Steve, for having me. You know, you had a perfect lead in because what you want to do is create a supply side productivity boom, and because that does a few things which address head on that affordability issue. Which, number one, is if you get a productivity led supply side boom because you have 100% expensing CapEx, and you have got this innovative novel 100% expensing for factories which is going to be for the next three plus years, that is going to encourage tremendous investment.
With that investment becomes encouraged this rising productivity. When you have rising productivity, profits go up. What we learned from the first Trump administration and from the Reagan era is that when you have that CapEx boom occur, you get rising wages. So nominal wages are going to surge as they were surging this year and as they surged under President Trump’s first term.
Also, Steve, because you are increasing the supply side capacity of the economy, not only is your nominal wage rate going to rise, but you are going to lower the cost of living because the economy can produce more with the same resources it had before. So you get a supply side CapEx disinflationary boom. That is the key part. That is how you are going to improve affordability. Your workers are going to get paid more nominally because of higher productivity, and then inflation is going to come down. So the real wage is going to increase.
And then the icing on the cake is workers’ after tax wages are going to surge next year because of the one big beautiful bill which has substantial tax cuts for middle and lower income households. Upwards of 200 billion dollars in tax refunds is going to hit working class Americans’ accounts next year. That is going to make things more affordable. It is great. It is just absolutely great news.
STEVE BANNON (HOST): See, I do not think people, and my strongest recommendation is Treasury ought to be out just banging on this every day. Like, for instance, the tax refunds that are happening around, you know, up in, you know, around from the beginning of the year to April. Walk me through again what kind of infusion into Americans’ pockets that will be.
JOE LAVORGNA (GUEST): And this was, and I give President Trump, with obviously Secretary Bessent’s help, tremendous credit to getting that bill done on July 4th because you have to write these guidelines so that the policies can be in place so that everyday working Americans can benefit from it. So this past fall, the IRS wrote the guidelines for who is responsible for getting these no tax on tips. And it is really 21st century stuff. So it is not just hardworking waiters and waitresses and bartenders and people who get tips, but it refers to podcasters, social influencers, these newfangled jobs that have been created. They are not going to be paying tax on their tips effectively.
Additionally, overtime, you talk about a reindustrialized manufacturing boom. Why are we taxing that extra marginal dollar that people want to work for overtime? So when you add this all up, there are many private sector estimates that say we could have upwards of $200 billion in refunds because the people who are going to benefit from this clearly have, you know, they did not know the guidelines, they were not sure the rules. But now that it is in place, they are going to get a big refund when they file their taxes next year. Then they will change their withholding. But we are talking potentially seven tenths of GDP just from this one policy alone. And again, Steve, as you know, that is money that goes directly into these hardworking Americans’ pocketbooks.
STEVE BANNON (HOST): The supply side tax cut on the capital expensing that drives investment in plant and equipment to return us to be a manufacturing superpower with all those high value added jobs, good paying jobs that then drive in communities all the services, the coffee shop, the dress shop, the store where you get the gifts for the children, sporting goods, all of it, the real estate prices. Then in addition, you have the commercial relationships in which President Trump is redoing all the commercial relationships around the world to make sure that people have an option. You can either move your manufacturing here to the United States, which we saw last Friday when we had the secretary on in Sumter, South Carolina, at the magnets plant with the rare earths, or you can pay a fee. You can pay a tolling fee.
Now, the Supreme Court is going to have something to say about that. But do you believe right now, because you are seeing the beginning of the CapEx, the capital expenditure in the big beautiful bill, are you concomitantly seeing that at least the factories come back from this international investment? I see a lot of headlines about international investment, but is Treasury confident that that is happening and happening at the pace that eventually will have some sort of positive political impact, sir?
JOE LAVORGNA (GUEST): Yes, Steve, we are confident. It is starting to happen. On the CapEx side, it is important because it is not everybody thinks it is just AI. It is not transit equipment, business equipment, industrial equipment. This transcends, this incipient CapEx boom transcends the AI story. So that has already occurred. The factory building will occur.
And coming back to the affordability issue, the fact that we have secured our borders and removed illegal immigrants will help affordability in two profound ways, Steve. Number one, market wages will not be substandard. They will not be below market because this artificial depressant on the wage rate. So wages will also rise because of that. That will help affordability.
But also, because there was self deporting and illegal immigrants removed because the president secured the border, you are getting rents. Rents are collapsing in price. So shelter costs next year will come down. You take the tariffs which are in place, and we believe that the Supreme Court will rule in our favor, you are going to get all of that capital to come in. It is going to take some time because these trade deals were just written. But everything is informed to make it work in a holistic, robust way. And 26 should be a very strong year for growth.
Follow Joe Lavorgna on X at @Lavorgnanomics
