Tag: Trump Economy

Federal Debt Could Spike Trump’s Big Economic Promises

Buck Banks

Trumponomics Watch

The Associated Press: Donald Trump has big plans for the economy — and a big debt problem that will be a hurdle to delivering on them.

Trump has bold ideas on tax cuts, tariffs and other programs, but high interest rates and the price of repaying the federal government’s existing debt could limit what he’s able to do.

Not only is the federal debt at roughly $36 trillion, but the spike in inflation after the coronavirus pandemic has pushed up the government’s borrowing costs such that debt service next year will easily exceed spending on national security.

The higher cost of servicing the debt gives Trump less room to maneuver with the federal budget as he seeks income tax cuts. It’s also a political challenge because higher interest rates have made it costlier for many Americans to buy a home or new automobile. And the issue of high costs helped Trump reclaim the presidency in November’s election.

“It’s clear the current amount of debt is putting upward pressure on interest rates, including mortgage rates for instance,” said Shai Akabas, executive director of the economic policy program at the Bipartisan Policy Center. “The cost of housing and groceries is going to be increasingly felt by households in a way that are going to adversely affect our economic prospects in the future.”

Plurality of Economists Say Inflation Would Be Worse Under Trump

Buck Banks

56%

“The Wall Street Journal’s survey, conducted July 5-9, received responses from 68 professional forecasters from business, Wall Street and academia. Of the 50 who answered questions about Trump and Biden, 56% said inflation would be higher under another Trump term than a Biden term, versus 16% who said the opposite. The remainder saw no material difference.”

U.S. Economy Grew by Just 3.5% in Trump’s Last Year

Buck Banks

3.5%

“The U.S. economy shrank by 3.5 percent last year as the novel coronavirus upended American business and households, making 2020 the worst year for U.S. economic growth since the depths of the Great Recession,” the Washington Post reports. “This is the last GDP report from former president Donald Trump’s tenure. Until the pandemic, Trump was on track for an economic record that put him near the middle of the pack among recent presidents. But the covid-19 crisis has ensured that he is likely to have overseen the slowest economic growth of any president in the period since the Second World War.”

Shocker: Trickle-Down Economics Doesn’t Work

Buck Banks

50

Bloomberg: “Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic. … The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.”

U.S. Poverty Rate Is Soaring

Buck Banks

7.8 million

“The U.S. poverty rate has surged over the past five months, with 7.8 million Americans falling into poverty, the latest indication of how deeply many are struggling after government aid dwindled,” the Washington Post reports. “The poverty rate jumped to 11.7 percent in November, up 2.4 percentage points since June, according to new data released Wednesday by researchers at the University of Chicago and the University of Notre Dame.”