Trump Is Hurting The U.S. Economy
August 11, 2017
President Trump is hurting the U.S. economy. Trump’s policies would reduce economic growth and harm job creation. His inability to get anything done creates chaos and uncertainty that has been a setback to business expansion and caused healthcare premiums to spike. And Trump’s reckless foreign policy and threats of nuclear war have caused markets to fall and weakened the value of the dollar.
The chaos created by Trump’s reckless approach to foreign policy and his threats of nuclear war with North Korea have caused markets to fall and jeopardizes the value of the U.S. dollar.
The Guardian: “Markets fall after Trump threatens North Korea with ‘fire and fury’ – as it happened”
New York Times: “When trouble flares and anxiety mounts, people who manage money traditionally entrust it to a seemingly indomitable refuge, the American dollar. Yet on Wednesday, in the hours after President’s Trump’s threat to unleash ‘fire and fury’ on North Korea if it continued to menace the United States, global investors sold the dollar. The same dynamic played out in June, as Saudi Arabia and other Arab nations imposed an embargo on Qatar, delivering a fraught crisis to the oil-rich Persian Gulf. And the dollar dipped in July after President Vladimir V. Putin of Russia expelled 755 American diplomats, ratcheting up tensions between the two nuclear powers. Since the beginning of the year, the dollar has surrendered nearly 8 percent against a basket of major currencies.”
New York Times: “Donald J. Trump’s presidency has been so full of departures from the norms of international relations that uncertainty has seeped into the calculation of America’s plans. That has subjected the dollar to additional skepticism, enhancing the fundamental factors pulling it down, from worries about the strength of the American economy to improved fortunes in Europe and Asia. The dollar has in some sense become an international medium of expression about the American political environment.”
The Trump administration’s economic policies create uncertainty that threatens the global economy.
BBC: “He also said the economic policies of the Trump administration posed a risk… He also said that the economic policies of the White House were creating uncertainty, without naming specific policies. President Donald Trump is pursuing a more protectionist trade agenda and trying to relax regulations brought in to protect the financial system after the crash. He has also pledged to slash taxes and boost infrastructure spending. ‘The risk is that the White House or the US will do something really irrational. That may seem hyperbolic but we are all holding our breath,’ Mr Rogoff said.”
Trump’s inability to deliver on his promises has forced companies to put hiring and investment decisions on hold.
Washington Post: “Corporate uncertainty about whether the Trump administration will be able to deliver on numerous promises — including tax cuts, health care, a China crackdown and infrastructure — has forced many companies to put important hiring and investment decisions on hold, potentially crimping an economic expansion that appears ready to accelerate.”
Washington Post: “One manufacturing company is having a hard time making acquisitions because other companies are waiting to see what happens with tax incentives. A staffing executive says firms are still hesitant to boost hiring until they know more about what Washington plans to do on taxes and regulation. A financial industry CEO, Ronald Kruszewski of Stifel, said that investors are nervous about new opportunities because of ‘lack of clarity from Washington on deregulation and tax policy.’”
Trump’s actions and threats to sabotage the Affordable Care Act triggered double-digit premium increases.
Associated Press: “The Trump administration’s own actions are triggering double-digit premium increases on individual health insurance policies purchased by many consumers, a nonpartisan study has found.”
Associated Press: “The analysis released Thursday by the Kaiser Family Foundation found that mixed signals from President Donald Trump have created uncertainty ‘far outside the norm,’ leading insurers to seek higher premium increases for 2018 than would otherwise have been the case.”
Trump’s proposal to slash legal immigration would dramatically reduce economic growth and harm job creation.
Wharton School of Business: “By 2027, our analysis projects that RAISE will reduce GDP by 0.7 percent relative to current law, and reduce jobs by 1.3 million. By 2040, GDP will be about 2 percent lower and jobs will fall by 4.6 million.”
Questions about Trump’s ability to deliver on his tax proposals hurts projected economic growth and state tax revenue.
CNBC: “But reducing the corporate tax rate will take — figuratively and literally — an act of Congress, which so far this year has had little success in delivering on President Donald Trump’s political agenda, even with a Republican majority. With hopes of repealing and replacing Obamacare officially dashed for now, Congress appears ready to move on to comprehensive tax reform after the August recess, but we could be in for even more gridlock. It’s mainly for this reason that many economists are starting to rethink their U.S. growth estimates.”
CNBC: “In July the International Monetary Fund revised down its forecast for domestic economic growth, from 2.3 percent to 2.1 percent in 2017 and from 2.5 percent to 2.1 percent in 2018. According to the Washington-based fund, the decisive factor in the revision ‘is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes.’”
Bloomberg: “The uncertainty over federal tax reform and increasing costs of healthcare and Medicaid threaten to dampen states’ slow tax revenue growth for fiscal year 2018, according to preliminary findings from the National Conference of State Legislatures.”