November 25, 2020

Trump’s Biggest Economic Legacy Isn’t About the Numbers

“I don’t think he really has pushed the boundaries of any of those policy issues beyond where they already were,” said Mr. Strain of the American Enterprise Institute.

Similarly, Jason Furman, a chairman of the Council of Economic Advisers during the Obama administration, argues that Mr. Trump was pushed along by the same trends and forces that spurred his supporters. And on some issues, like immigration, he caused public opinion to move in the opposite direction.

In the end, it may turn out that the president’s most significant impact on economic policy is not one that he intended: overturning the conventional wisdom about the impact of government deficits.

By simultaneously pursuing steep tax cuts for businesses and wealthy individuals, raising military spending and ruling out Medicare and Social Security reductions, Mr. Trump presided over unprecedented trillion-dollar deficits. Emergency pandemic relief added to the bill. Such sums were supposed to cause interest rates and inflation to spike and crowd out private investment. They didn’t.

“Trump has done a lot to legitimize deficit spending,” Mr. Furman said.

Mr. Furman is one of a growing circle of economists and bankers who have called for Washington to let go of its debt obsession. Investing in infrastructure, health care, education and job creation are worth borrowing for, they argue, particularly in an era of low interest rates.

Article source: https://www.nytimes.com/2020/10/24/business/economy/trump-economy-manufacturing.html

Speak Your Mind