- Joined
- Oct 17, 2007
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- 11,862
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- Centrist
Following his decisive victory in the New York Primary on April 19, Donald Trump declared that he was uniquely qualified to address the nation's economic challenges. "[W]e have problems everywhere you look. We are going to solve those problems. And one of the big problems is the economy and jobs. And that is my wheelhouse," he told his audience.
The audience almost certainly assumed he was professing that he had the requisite expertise to growth the economy and create jobs. However, the policy ideas his campaign has unveiled to date argue for an entirely different scenario. They suggest that he is well-positioned to bring about a recession.
It has now been more than seven years since the Great Recession ended. Perhaps those are the "good old days" to which Trump would lead the nation?
Perhaps that would become the "Trump economy?" There is a rare political branding opportunity inherent in pursuing just such a course. Bringing about a policy-driven recession is a big, bold idea that sets Trump apart from all of his rivals.
Sustainable differentiation is key to building powerful brands. The Trump economic policy brand would be distinct. It would also be sustainable, as no other candidate--not Clinton, Johnson, or Stein--would likely try to imitate that brand. Trump would be free to create new economic policy space all of his own.
Let's take a closer look at the "value" the Trump economic policy brand would deliver.
Moody's Analytics explained:
Broadly, Mr. Trump's economic proposals will result in a more isolated U.S. economy... While globalization has created winners and losers in the U.S. economy in recent decades, it contributes substantially to the ongoing growth of the U.S. economy. Pulling back from globalization, as Mr. Trump is proposing, will thus diminish the nation's growth prospects.
Mr. Trump's economic proposals will also result in larger federal government deficits and a heavier debt load. His personal and corporate tax cuts are massive and his proposals to expand spending on veterans and the military are significant. Given his stated opposition to changing entitlement programs such as Social Security and Medicare, this mix of much lower tax revenues and few cuts in spending can only be financed by substantially more government borrowing.
Not to worry, though, Trump also has a "solution" for that problem. Trump's flirting with "renegotiating" the nation's debt and then refining his proposal to monetize it were no accidents. They were a transparent exercise in problem-solving. In the end, Trump pointed out that the nation does not need to default, because it can "print the money." The Trump economic policy brand is built on the singular premise that there is a "free lunch" after all. It overturns the "dismal science" that preaches scarcity.
How about his tariffs? The National Foundation for American Policy found:
[T]he tariffs would impose a regressive consumption tax of $11,100 over 5 years on the typical U.S. household. The impact would hit poor Americans the hardest: A tariff of 45% on imports from China and Japan and 35% on Mexican imports would cost U.S. households in the lowest 10% of income up to 18% of their (mean) after-tax income or $4,760 over 5 years...
In total, Trump's proposed tariffs against just China, Japan and Mexico would impose a dead loss on the U.S. economy of $170 billion annually and $850 billion over five years. The U.S. economy would suffer a total annual burden in the form of a $278 billion loss in household purchasing power--akin to a general 3.9% new tax on after-tax income. The annual benefits to producers would be only $43 billion, or 15% of the loss experienced by consumers.
Could Trump actually deliver?
His resume suggests that he could. Perhaps “bigly™." He has the necessary experience. Trump would be doing for the American economy what he did with his casinos in Atlantic City.
"Politicians have...given you nothing... I will give you everything... I'm the only one," Trump promised a rally in Bismarck just over a month after his New York primary win. If Trump meant that he would institute a negative economic growth policy, he truly is "the only one."
The audience almost certainly assumed he was professing that he had the requisite expertise to growth the economy and create jobs. However, the policy ideas his campaign has unveiled to date argue for an entirely different scenario. They suggest that he is well-positioned to bring about a recession.
It has now been more than seven years since the Great Recession ended. Perhaps those are the "good old days" to which Trump would lead the nation?
Perhaps that would become the "Trump economy?" There is a rare political branding opportunity inherent in pursuing just such a course. Bringing about a policy-driven recession is a big, bold idea that sets Trump apart from all of his rivals.
Sustainable differentiation is key to building powerful brands. The Trump economic policy brand would be distinct. It would also be sustainable, as no other candidate--not Clinton, Johnson, or Stein--would likely try to imitate that brand. Trump would be free to create new economic policy space all of his own.
Let's take a closer look at the "value" the Trump economic policy brand would deliver.
Moody's Analytics explained:
Broadly, Mr. Trump's economic proposals will result in a more isolated U.S. economy... While globalization has created winners and losers in the U.S. economy in recent decades, it contributes substantially to the ongoing growth of the U.S. economy. Pulling back from globalization, as Mr. Trump is proposing, will thus diminish the nation's growth prospects.
Mr. Trump's economic proposals will also result in larger federal government deficits and a heavier debt load. His personal and corporate tax cuts are massive and his proposals to expand spending on veterans and the military are significant. Given his stated opposition to changing entitlement programs such as Social Security and Medicare, this mix of much lower tax revenues and few cuts in spending can only be financed by substantially more government borrowing.
Not to worry, though, Trump also has a "solution" for that problem. Trump's flirting with "renegotiating" the nation's debt and then refining his proposal to monetize it were no accidents. They were a transparent exercise in problem-solving. In the end, Trump pointed out that the nation does not need to default, because it can "print the money." The Trump economic policy brand is built on the singular premise that there is a "free lunch" after all. It overturns the "dismal science" that preaches scarcity.
How about his tariffs? The National Foundation for American Policy found:
[T]he tariffs would impose a regressive consumption tax of $11,100 over 5 years on the typical U.S. household. The impact would hit poor Americans the hardest: A tariff of 45% on imports from China and Japan and 35% on Mexican imports would cost U.S. households in the lowest 10% of income up to 18% of their (mean) after-tax income or $4,760 over 5 years...
In total, Trump's proposed tariffs against just China, Japan and Mexico would impose a dead loss on the U.S. economy of $170 billion annually and $850 billion over five years. The U.S. economy would suffer a total annual burden in the form of a $278 billion loss in household purchasing power--akin to a general 3.9% new tax on after-tax income. The annual benefits to producers would be only $43 billion, or 15% of the loss experienced by consumers.
Could Trump actually deliver?
His resume suggests that he could. Perhaps “bigly™." He has the necessary experience. Trump would be doing for the American economy what he did with his casinos in Atlantic City.
"Politicians have...given you nothing... I will give you everything... I'm the only one," Trump promised a rally in Bismarck just over a month after his New York primary win. If Trump meant that he would institute a negative economic growth policy, he truly is "the only one."
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