Great hopes mixed with scepticism on Trump’s economic policies!
Soon Donald Trump will be officially announced as the 45th President of the United States in a grand ceremony in Washington DC. The 58th Presidential appointment will be held on Friday the 20th of January on the west front of the United States Capital. After the swearing in, Trump will give a speech that will be recorded in the pages of history.
Franklin Roosevelt told a country ravaged by the Great Depression that all it had to fear was fear itself, and John F Kennedy urged Americans to “ask not what your country can do for you, ask what you can do for your country.” For an average of 20 minutes Trump will have to deliver a note to be remembered in the footsteps of his predecessors.
One of Trump’s signature promises, repeated in his victory speech, is a massive infrastructure spending programme. “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” he told a cheering crowd last Wednesday morning.
Republican economists are optimistic that President-elect Donald Trump’s economic policies could get the economy growing closer to a 3% annually, At the moment, the Congressional Budget Office estimates the economy’s sustainable growth rate is 1.8%, down from a historical rate above 3%. During a bipartisan panel discussion at the American Economic Association meeting, Glenn Hubbard, dean of the Columbia University Business School, said Trump’s plans could get GDP growth “up to 2.75% or so.” Trump identifies the problem referring that the U.S. lost 34 percent of its manufacturing jobs between 1998 and 2010. These jobs were outsourced by U.S. companies to save money. Trump’s big plans to boost economic growth from its current 2 percent pace to a 3 percent or more and create 25 million new jobs over 10 years rely on the stimulative impact of slashing corporate and individual tax rates.
Trump made U.S. trade policy a major theme in his campaign, with threats to impose harsh tariffs on Chinese imports, renegotiate or scrap the North American Free Trade Agreement with Mexico and Canada and scuttle the Obama administration’s proposed Trans-Pacific Partnership deal. In the short run, it’s not clear how big an impact this would have on U.S. exports.
A lot depends on how the U.S. trading partners respond if the Trump administration carries out those threats. Higher tariffs on imports, though, would raise prices for U.S. consumers and businesses, possibly fuelling higher inflation, which could complicate matters for the U.S. consumers. Yet, as a businessman his concepts of administration may boost the earnings of the economy towards his targeted growth rates. Although economists argue that the impact of Trump’s policies may well be felt in 2018 rather than 2017.
Trump’s speech may mark a launch of his presidency term, but his words can only be recorded in history if actioned in reality.
