Donald Trump inherited a strong and improving economy, and while he has taken full credit for keeping the economy on trend, he has done much to destroy its momentum and turn us back toward recession. Many in the financial world are so exuberant about reduced regulations and lower tax rates that they have forgotten the larger macroeconomic implications of Trump’s stated policy goals. In other words, the financial markets have mistaken Trump’s technical (short term) moves for fundamental (long term) changes, and sooner or later, the financial markets will have to reckon with this mistake.
First, there are the tariffs that Trump already enacted or wants to enact, which would plunge us into trade wars that hurt all sides. Costs to consumers are rising, whether directly in the form of more expensive cars, or indirectly in the form of commodity inputs to common products like soy additives in foods or steel parts in every-day devices.
Second, Trump’s foreign policy toward the Middle East has already created greater uncertainty, especially with oil-rich Iran, causing oil and gas prices to rise. US prices at the pump are already cancelling out any paltry savings we got from the Tax Scam, and will continue to be a drag on GDP.
The Tax Scam is another example. On the surface, tax cuts should benefit the economy. But the fine print of the Tax Scam leads to a different conclusion. Over 80% of the benefits of the new tax law go to the top 1% of households, who don’t turn around and spend their windfall, they save it. It sits in a bank account. Meanwhile, the tax cuts increase the US deficit by 1.5-2.0 trillion dollars, which is a massive shift that puts upward pressure on interest rates. Short rates have already risen, increasing borrowing costs for businesses, especially small businesses, who rely on credit to fund their inventories or expansions.
Farmers are especially hard hit, feeling the financial pinch from several of these Trump initiatives, and here is an excellent article on the details of the pain they are feeling:
NY-19 is a rural district with significant agricultural concerns, so we must hold John Faso and his party responsible for making the lives of our farmers more difficult. The Tax Scam and the aforementioned Trump policies are a betrayal of the promises made to working Americans by the GOP, and we need to make sure the voters of our district understand exactly who is screwing them. People tend to remember betrayal.
Keep working to fire Faso…