Infrastructure Inflation And Energy
Within days of taking office, Trump signed presidential memoranda to revive both the Keystone XL and Dakota Access oil pipelines although Trump touted the projects as job-creating measures, the proposed projects were projected to have only a tiny impact on the U.S. economy.
Immigration In The Us
Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch. As a writer for The Balance, Kimberly provides insight on the state of the present-day economy, as well as past events that have had a lasting impact.
Immigration has an impact on a countrys economy. Studies have shown that when people move to the U.S. from other countries, they add to the economic growth of the country. Immigration can help lead to increased innovation, education, economic productivity, and more.
Unfortunately, however, immigration in the U.S. is long-rooted in a past of the mistreatment of people and its impact on the nations economy is a topic that is still debated among lawmakers. Below, well dive deeper into immigration in the U.S. and how it impacts the economy.
How He Did It
Trump’s economic program was very simple: an attack on taxes and regulations with an extra dose of spending on infrastructure and the military that would create a supply shock to a moribund economy.
On the tax side, the White House pushed through a massive $1.5 trillion reform plan that sliced the highest-in-the-world corporate tax from 35 percent to 21 percent and lowered rates for millions of taxpayers, though the cuts for individuals will expire in 2025.
On deregulation, Trump ordered that rules be pared back or eliminated across the board. During his time in office, Congress has cut back on the Dodd-Frank banking reforms, particularly in areas affecting regional and community institutions, rolled back a multitude of environmental protections that he said were killing jobs and took a hatchet to dozens of other rules.
During the first year of his administration, “significant regulatory activity” had declined 74 percent from where it was in the same period of the Obama administration, according to data collected by Bridget Dooling, research professor at GW’s Regulatory Studies Center.
The Dodd-Frank rollbacks have been particularly helpful to community banks, whose share prices collectively are up more than 25 percent over the past year. Small-cap stocks in general have strongly outperformed the broader market, gaining 23 percent over the past 12 months at a time when the S& P 500 is up 17 percent.
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Repeal Of The Aca Individual Mandate
President Trump signed the Tax Cuts and Jobs Act into law in December 2017, which included the repeal of the individual mandate of the Affordable Care Act . This removed the requirement that all persons purchase health insurance or pay a penalty. The Congressional Budget Office estimated that up to 13 million fewer persons would be covered by health insurance by 2027 relative to prior law and insurance premiums on the exchanges would increase by about 10 percentage points. This is because removing the mandate encourages younger and typically healthier persons to opt out of health insurance on the ACA exchanges, increasing premiums for the remainder. The non-group insurance market would continue to be stable . CBO estimated this would reduce government spending for healthcare subsidies to lower income persons by up to $338 billion in total during the 2018â2027 period compared to the prior law baseline. Trump stated in an interview with The New York Times in December 2017: “I believe we can do health care in a bipartisan way, because we’ve essentially gutted and ended Obamacare.”
Economic Impact Of Trade Policies
In January 2020, the Congressional Budget Office explained how tariffs reduce U.S. economic activity in three ways: 1) Consumer and capital goods become more expensive 2) Business uncertainty increases, thereby reducing or slowing investment and 3) Other countries impose retaliatory tariffs, making U.S. exports more expensive and thus reducing them. CBO summarized the economic impact of Trump’s tariffs as follows:
- âIn CBO’s estimation, the trade barriers put in place by the United States and its trading partners between January 2018 and January 2020 would reduce real GDP over the projection period .
- The effects of those barriers on trade flows, prices, and output are projected to peak during the first half of 2020 and then begin to subside.
- Tariffs are expected to reduce the level of real GDP by roughly 0.5 percent and raise consumer prices by 0.5 percent in 2020.
- As a result, tariffs are also projected to reduce average real household income by $1,277 in 2020.
- CBO expects the effect of trade barriers on output and prices to diminish over time as businesses continue to adjust their supply chains in response to the changes in the international trading environment. By 2030, in CBO’s projections, the tariffs lower the level of real GDP by 0.1 percent.â
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Americans With Health Insurance
Obama made it one of his top goals to get more Americans covered by health insurance. The number of Americans lacking health insurance went from more than 48 million people in 2010 down to 28 million after the passage of the Affordable Care Act.
The uninsured rate has remained low under Trump, though it ticked up slightly after Trump did away with the penalty for American adults who dont buy health insurance. Trump also made it a goal to repeal the Affordable Care Act, but that has not happened in his first term.
Tax Relief For The Middle Class
Passed $3.2 trillion in historic tax relief and reformed the tax code.
- Signed the Tax Cuts and Jobs Act the largest tax reform package in history.
- More than 6 million American workers received wage increases, bonuses, and increased benefits thanks to the tax cuts.
- A typical family of four earning $75,000 received an income tax cut of more than $2,000 slashing their tax bill in half.
- Doubled the standard deduction making the first $24,000 earned by a married couple completely tax-free.
- Doubled the child tax credit.
- Virtually eliminated the unfair Estate Tax, or Death Tax.
- Cut the business tax rate from 35 percent the highest in the developed world all the way down to 21 percent.
- Small businesses can now deduct 20 percent of their business income.
- Businesses can now deduct 100 percent of the cost of their capital investments in the year the investment is made.
- Since the passage of tax cuts, the share of total wealth held by the bottom half of households has increased, while the share held by the top 1 percent has decreased.
- Over 400 companies have announced bonuses, wage increases, new hires, or new investments in the United States.
- Over $1.5 trillion was repatriated into the United States from overseas.
- Lower investment cost and higher capital returns led to faster growth in the middle class, real wages, and international competitiveness.
Jobs and investments are pouring into Opportunity Zones.
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Donald Trump Had An Economic Record That Will Be Remembered
I can never defend the behavior of Donald TrumpDonald TrumpTwo Fox News contributors quit over Tucker Carlson’s Jan. 6 documentary GOP senator: Decisions on bills not made based on if they hurt or help Trump or BidenO’Rourke won’t say if he wants Biden to campaign for him in Texas senate raceMORE since the election last fall. It deserves condemnation. But this must not detract from his strong economic record, notably when it comes to the progress in the financial status for the middle class and minorities. Millions of people around the country benefited from his Make America Great Again policies.
These facts are vital because the historical record should be accurate. No matter what one thinks of Trump, we need to learn the right policy lessons of what works and what does not in creating broad prosperity for America. Trump reduced taxes, unleashed the economy, renewed domestic energy production, and overhauled trade deals to place the country first.
Just like when Ronald Reagan became president, almost all of the liberal commentators and academics predicted that the policy of Trump would not work, and that they would harm the economy and stock market. The Washington Post famously claimed before the 2016 election that Trump could destroy the world economy. Did that turn out to be true?
Stephen Moore is an adviser at Freedom Works and former member of the White House economic recovery task force. He tweets at .
Skeptics Doubt It Will Last
His critics don’t believe it will last. They figure the current boom will begin petering out as soon as mid-2019 and possibly end in recession in 2020.
“This is temporary. In fact it’s raising the odds of recession on the other side,” said Mark Zandi, chief economist at Moody’s Analytics. “The economy is now more cyclical because of the stimulus. You’re doing a lot of near-term growth, but you’re setting up for a tough time on the other side of it. That’s why most economists think we have a recession in 2020, because of these policies.”
There is plenty to worry about: A ballooning debt that will only get worse if Trump’s growth predictions don’t materialize, the increasing likelihood of a trade war that sparks inflation and punishes U.S. companies that depend on exports, and a suddenly slowing real estate market that could be pointing to larger issues at the heart of the economy.
Indeed, while Trump has preached fiscal discipline, he has not practiced it. The U.S. economy is carrying a $45 trillion debt load that continues to grow under Trump. Government debt has swollen by $1.46 trillion in Trump’s 19 months, an increase of 7.3 percent, to $21.4 trillion. The public owes $15.7 trillion of that debt, an increase of 9 percent.
Government debt since 2009
Then there’s the Federal Reserve, which cut rates and flooded the financial system with cash during the Obama years. Now it is reversing course and tightening, or raising rates.
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Colossal Rebuilding Of The Military
Rebuilt the military and created the Sixth Branch, the United States Space Force.
- Completely rebuilt the United States military with over $2.2 trillion in defense spending, including $738 billion for 2020.
- Secured three pay raises for our service members and their families, including the largest raise in a decade.
- Established the Space Force, the first new branch of the United States Armed Forces since 1947.
- Modernized and recapitalized our nuclear forces and missile defenses to ensure they continue to serve as a strong deterrent.
- Upgraded our cyber defenses by elevating the Cyber Command into a major warfighting command and by reducing burdensome procedural restrictions on cyber operations.
- Vetoed the FY21 National Defense Authorization Act, which failed to protect our national security, disrespected the history of our veterans and military, and contradicted our efforts to put America first.
Defeated terrorists, held leaders accountable for malign actions, and bolstered peace around the world.
Addressed gaps in Americans defense-industrial base, providing much-needed updates to improve the safety of our country.
Three Years Of Slashing Critical Safety Nets
The failures of the Trump administrations approach did not begin when the pandemic started. Each of the administrations four budget proposals has recommended slashing funding for the Center for Disease Control . In 2018, the CDC cut its epidemic prevention activities, which help train front-line workers in outbreak detection and work to strengthen laboratory and emergency response systems in countries where disease risks are greatest, by 80 percent moreover, it significantly scaled back its focus on emerging infectious diseases in several of the worlds hot spots, including China. Despite from the CDC, the U.S. Department of Health and Human Services , and the National Security Council to increase funding in the fiscal year 2020 budget, the Trump administration proposed a 12 percent cut to the HHS and a 10 percent cut to the CDC. Even now, amid one of the worst public health crises in recent American history, the acting director of the U.S. Office of Management and Budget has doubled down on the White Houses FY 2021 proposed budget cuts of $1.2 billion to the CDC and $35 million to the Infectious Diseases Rapid Response Reserve Fund.
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Cbo Scoring Of The 2018 Budget
A budget document is a statement of goals and priorities, but requires separate legislation to achieve them. As of January 2018, the Tax Cuts and Jobs Act was the primary legislation passed that moved the budget closer to the priorities set by Trump.
Trump released his first budget, for FY2018, on May 23, 2017. It proposed unprecedented spending reductions across most of the federal government, totaling $4.5 trillion over ten years, including a 33% cut for the State Department, 31% for the EPA, 21% each for the Agriculture Department and Labor Department, and 18% for the Department of Health and Human Services, with single-digit increases for the Department of Veterans Affairs, Department of Homeland Security and the Defense Department. The Republican-controlled Congress promptly rejected the proposal. Instead, Congress pursued an alternative FY2018 budget linked to their tax reform agenda this budget was adopted in late 2017, after the 2018 fiscal year had begun. The budget agreement included a resolution specifically providing for $1.5 trillion in new budget deficits over ten years to accommodate the Tax Cuts and Jobs Act that would be enacted weeks later.
The Congressional Budget Office reported its evaluation of President Trump’s FY2018 budget on July 13, 2017, including its effects over the 2018â2027 period.
Understand The Us Debt Ceiling
What is the debt ceiling?The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury bills and savings bonds to fulfill its financial obligations. Because the U.S. runs budget deficits, it must borrow huge sums of money to pay its bills.
When will the debt limit be breached?After Senate leaders agreed to a short-term deal to raise the debt ceiling on Oct. 7, the Treasury estimated that the government can continue borrowing through Dec. 3. The deal sets up yet another consequential deadline for the first Friday in December.
Why does the U.S. limit its borrowing?According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so the Treasury did not need to ask for permission each time it needed to issue bonds to pay bills.
What would happen if the debt limit was hit?Treasury Secretary Janet Yellen told Congress that inaction on raising the debt limit could lead to a self-inflicted economic recession and a financial crisis. She also said that failing to raise the debt ceiling could affect programs that help millions of Americans, including delays to Social Security payments.
Do other countries do it this way?Denmark also has a debt limit, but it is set so high that raising it is generally not an issue. Most other countries do not. In Poland, public debt cannot exceed 60 percent of gross domestic product.
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