The Policies not the Person: A Trump Presidency means ballooning debt

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When I was little and the world around me seemed to be breaking my mother would remind me that everything would seem better in the morning. She was generally right, and I wasn’t surprised to find myself waking this morning feeling more settled about the idea of a US Trump Presidency. I reached for my smartphone and instead of reading more analysis or opinion pieces on Trump and the election (of which I had had quite enough the day before) I did something I hadn’t done: I looked into Trump’s policies. Like so many others, I had let my opinion of Trump be driven by sound bites and memes and exaggerated statements of a man I thought too much of a buffoon to possibly be elected President.  My idea of Trump as President had been heavily influenced by statements about a ‘great big wall’ and excluding Muslims from immigration and objectifying women through beauty pageants, but had not duly considered why so many Americans would vote for him.  With this in mind I read through all of Trump’s policies.

The good:

It is worth pointing out that not all of Trump’s policies are necessarily ‘bad’, indeed there are overlaps between some of Trump’s policies and Bernie Sanders’. In particular, Trump’s proposal to tear up the Trans Pacific Partnership is likely to be supported by a multitude of different stakeholder groups, including environmentalists who see power transferred to corporate elites as having potentially negative implications for environmental preservation in developing countries.  Additionally, there are general statements around support for expanded US manufacturing and industry which will support local employment and GDP growth.  It’s not clear exactly how Trump will action these statements, but the impact of former trade agreements on increasing the trade deficit are noted and will presumably be investigated.  Additionally, Trump’s policies highlight problems associated with ballooning university debt and seek to create additional support (through tax breaks) for childcare for working mothers.  University debt and the cost of childcare locking women out of the workforce both negatively impact lower income groups ahead of higher income groups.  Trump also seeks to invest in and improve on physical infrastructure, including in terms of transport, electricity and water networks.  A growing number of engineering reports are finding US infrastructure to be of declining quality, with potential implications for economic efficiency and human safety.  Investment in infrastructure projects will also have a positive impact on employment, particularly if US-based construction materials are prioritised over international resources (as is Trump’s intention).  While some people might not support an intended expansion of military might, a Trump platform of increased cyber security against international interference is wise (although implications for personal information are unclear).  Finally, many individuals (though not all) will benefit financially from a reduction in their taxes.

The bad:

As above, a key platform of Trump’s policies is an intention to invest in physical infrastructure for both improvement in state assets and for job creation. This is a classic Keynesian economic approach to economic growth: government spending can be used to promote job growth, with those working under government contracts then ‘sharing’ their wealth into other parts of the economy. This approach to economic growth was implemented in post-World War II US with relative success and saw the spread of roads across California, the rise of suburbia and a vision of the ‘American Dream’.  Alternatively, another key platform of Trump’s policies is reliance on a reduction in taxes and regulations to promote business development and a rise in GDP.  This is sometimes referred to as ‘trickle down economics’: the idea that reducing burdens on businesses will result in business growth and therefore employment, with benefits ‘trickling down’ through the economy to lower income workers.  In contrast with Keynesian economic development trickledown economics has rarely been successful in promoting economic well-being for the poorest groups, and instead generally results in larger profits for businesses (and shareholders).  The most important factor to consider, however, is that governments rarely promote BOTH a Keynesian and a ‘trickle down economics’ pathway to economic development concurrently. The reason for this is simple: Keynesian economic development requires a large amount of government investment, and therefore relies on increasing taxes/revenue to support investment.  ‘Trickle down economics’ reduces taxes and therefore reduces government remuneration.  Trump is presumably assuming that the trickle down path will be successful in promoting business development to the extent that an increase in GDP and associated taxes will offset a reduction in tax revenue associated with lowered tax rates. This has rarely been found to be the case and, instead, a Keynesian approach combined with a trickle down approach to development will lead to ballooning debt.  This will only be exacerbated by further policy commitments for an expanded military (in both infrastructure and personnel), expanded Veterans Affairs support and education expenditure.  In fact, most of Trump’s policies will either reduce government revenue or increase government debt, with no policies identifying opportunities for balancing the budget. (Curiously, in an episode of The Simpsons set in 2030 Lisa is President of the United States and attempting to deal with a massive federal debt inherited from Trump – a potentially very accurate prophecy of the future.)

The Ugly:

Conspicuous in its absence was any consideration of environmental issues. The only time ‘environment’ was mentioned was in relation to the Environmental Protection Agency and associated regulations restricting business development. Trump’s policies support expansion of US coal, shale gas and oil industries, seeking for the US to become energy-independent.  ‘Clean coal’ is supported, but no mention is made of support for renewable energy.  Climate policies will be reversed, in particular in relation to President Obama’s executive orders around reducing emissions associated with electricity generation.  Given the influence that the US’s actions on climate policy have on international climate negotiations, Trump’s stance as anti-climate change action will negatively impact global efforts to reduce greenhouse gas emissions.

Of course, Trump’s policies are also anti-humanitarian, seeking to exclude access for Mexican ‘aliens’ by building a physical barrier, (temporarily) restricting immigration for those from Muslim countries, a general absence of policies supporting disadvantaged groups (except for army veterans and mothers), and expanded availability of guns and ammunition under a vow to support the Second Amendment.

The surprise:

I learnt a new, quite excellent, word: Boondoggle. According to Google, this means ‘an unnecessary, wasteful, or fraudulent project’.

While Trump, a man who openly denigrates women, ethnic minorities, LGBTI+ and other groups, is unlikely to ever be popular with many in America, the American people have voted for a change away from a government that has supported policies that promote globalisation and the ‘big end of town’. The question remains, however, as to what kind of power Trump is able to wield alone.  The prospect of a Republican-controlled Senate, House of Representatives and presumably US Supreme Court are, in fact, more troubling than the idea of an emboldened President without the power to push policies past an obstinate Congress. I for one hope that reason prevails in a Republican Congress… although what that reason looks like I can’t yet imagine.

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