WASHINGTON, Aug. 8, 2016 – Donald Trump unveiled his new economic plan during a speech in Detroit. His plan focuses on what the economy needs today: economic growth. The plan is very good and a departure from the Barack Obama/Hillary Clinton economic plan that has stagnated the country for the past eight years.
Trump realizes that the solution to virtually all of our economic woes is stimulating the economy to grow at more than a 4 percent annual rate. Real gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016, according to a report by the the U.S. Bureau of Economic Analysis (BEA).
Hillary Clinton’s economic plans offer no change, but four more years of Obama’s failed policies. Recognized economic expert Steve Forbes, chairman of Forbes Business, says that Trump’s plan will stimulate businesses, create jobs and bring prosperity back to America.
That despite what economists might say, Trump is right.
Economic growth will increase the demand for labor, which will mean more jobs available and at higher wages. The resulting increase in income earned by American workers will lead to an increase in consumption and further add to growth. As the unemployment rate falls, the government can reduce spending on social programs like food stamps and welfare.
Tax revenue will increase as the newly hired workers begin to pay taxes instead of receiving government handouts. That will tend to reduce the still bloated federal government budget deficit. The new opportunities will encourage discouraged workers to re-enter the labor market, which will increase the labor force participation rate from the dismally low level today.
“We will make the economy grow again,” Trump said.
He says he will rewrite trade deals and business regulations that President Obama has enacted via fiat and will use executive powers to cement progressive domestic-policy legacy.
Basically, Trump said he would remove burdensome regulations; some 392 have been tagged as being “major,” meaning that each carries an economic effect exceeding $100 million annually, and they prevent businesses from expanding and are not really providing any positive outcomes for the economy.
Examples of such regulations are the 2015 EPA clean power plant rules that require a 32 percent cut in power plant carbon dioxide emissions. Hillary Clinton promises to defend Obama’s executive actions and go even further on inversions. “This is not only about fairness. This is about patriotism,” she said in December.
The question everyone is asking is will Trump’s plans grow the economy?
The answer is, yes, they will.
Most of his plans don’t go far enough for most free market economists, but they are plans that will work and will be politically feasible. The American people have long wanted a simplified tax code that will allow them to keep more of the money they have earned.
His tax plan is a good example.
Trump will reduce taxes for all Americans and will simplify the tax code by reducing the brackets to just three: 12 percent, 25 percent and 33 percent. He will also eliminate the death tax so no one will have to sell inherited assets in order to pay taxes on assets that have already been taxed.
He will also reduce the corporate tax rate to 15 percent and use tax policy to encourage companies that earn profit overseas to bring the money back to the U.S. His plan is good, and it will stimulate growth.
It will not add as much growth as it could, nor will it be fair, in that it treats some Americans different from others. A better approach would be the Busler Single Rate tax plan. (Republicans moving toward the Busler Single Rate Tax plan)
On trade, Trump insists he favors free trade but wants it to be fair. The popular view today is that free trade and outsourcing hurt the economy by taking jobs from American manufacturing workers.
The reality is that free trade adds as many jobs as it subtracts, and it allows for growth in the economy since consumers can buy goods at lower prices and thus have more money to spend on other goods.
Even outsourcing is beneficial to the economy as a whole.
Trump says that he will provide a more detailed description of his plans shortly. His economic advisers are all knowledgeable economists who place economic growth at a higher priority that attempting to cure perceived social injustices, which is the top priority for the Obama/Clinton economic policies.
In total Trump’s economic plans will get the government out of the way of the free enterprise system and allow both big and small businesses to grow, prosper, add much-needed jobs and begin to revive the great American enterprise machine.
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