*The following is an opinion column by R Muse*
As a certain segment of the American population anxiously awaits the installation of a reality show celebrity as leader of the free world, real economists are predicting bad things for the nation’s economy. While some economists have predicted doom and gloom for the global economy, investment expert and Wall Street wizard Steven Rattner penned an op-ed in the New York Times predicting some seriously bad news for America’s economy and the majority of its population; the rich part of the population is going to do exceedingly well.
Mr. Rattner actually looked at Trump’s economic plan a lot more optimistically than most other economists, but that being said, he had nothing but bad news for America and the people; unless they were rich people. Rattner covered a fair number of points that include taxation, deregulation, trade, immigration, and spending. No matter how one prepared for the optimistic “expert’s” assessment, it was both depressing for the nation as a whole and devastating to know Americans will undergo another economic disaster because they are too stupid to remember what they suffered from living through the Bush years.
The centerpiece of Trump’s plan is typically Republican and economically disastrous; a huge $5.8 trillion tax cut unaccompanied by specificity about what spending would be cut to pay for it. As many economists are aware, after the “sequester” cuts, there is very little spending to slash without completely gutting social programs for the sole purpose of making the wealthy much richer.
It is as noteworthy as it should be obvious that the lion’s share (83%) of that unprecedented tax cut will go to the richest Americans, and within a couple of years over half will go straight to the top 0.1 percent. Notice that is the top one-tenth of the very richest one percent, but the actual one percent will receive a 24.5 percent tax cut.
Now, to put that tax cut number into a perspective a couple of Americans might comprehend, the George W. Bush tax cuts were a staggering $1.2 trillion and they cost the nation’s economy a whopping $6.6 trillion over the course of 14 years. Since most Americans are mesmerized and impressed when they see really BIG numbers, consider that if $1.2 trillion ended up costing the nation roughly $6.6 trillion over a decade-and-a-half. Conservative estimates are that Trump’s $5.8 trillion will cost $7.2 trillion within a decade, and blow up the deficit quickly because there is nowhere near enough room to cut spending to cover $5.8 trillion in tax cuts much less continue paying down the deficit. However, no sane American would ever say Republicans have ever cared about paying for anything, let alone tax cuts when a Republican is in the White House.
That relatively certain idea that the deficit is going to stop its decline and begin rising sharply coincides with the immediate reaction to the news that Trump won the election and interest rates on Treasuries immediately began rising. Typically, an “unexpected event” causes a flight to the safety of government debt pushing yields down, but with market fears that the nation’s deficit will balloon out of control, think $7.2 trillion in lost revenue, then the opposite occurs. Thus the Treasuries began rising on expectations that “deficit will balloon out of control.” It is too bad Democrats failed to point out a real-time example of the devastation of Republican massive tax cuts, but apparently, they were too intensely focused on Trump’s Twitter account to think about pointing out the living economic disaster in Kansas, or the 8-year old Great Recession, or the thirty-year-old Reagan trickle down debacle.
One of Trump’s plans is to start a trade war with wicked tariffs (34-45%) on goods poor and middle-class Americans consume. Rattner said those tariffs will mean Americans will begin suffering substantially higher prices (35-45%) on imported goods due to crushing tariffs. Those imported goods make up the totality of products poor and middle-class Americans purchase at big box stores chains such as WalMart and Target Stores.
He also said a greater number of domestic jobs would be lost because Americans would have less spending power leading to job cuts down and upstream. In fact, according to a recent study by the nonpartisan Peterson Institute for International Economics, they estimated that instead of bringing any jobs back to America, Trump’s tariffs, if enacted, will result in a trade war that will cost the economy five million jobs and lead to recession that will likely spread beyond the confines of the combatants in Trump’s trade war.
Mr. Rattner even commented on the Trump deportation plan that the very conservative American Action Forum “calculated would cost the nation $400 billion to $600 billion,” shrink the labor force, and reduce gross domestic product by $1.6 trillion. As some Americans realize, all immigrants, including undocumented workers, play a crucial role in sustaining and contributing to the nation’s economy in production and consumption of goods and services, and they contribute by paying taxes; something Trump wouldn’t know anything about.
Willard Romney warned that Trump’s economic plan will result in a disastrous recession, and Romney’s less-damaging proposals in 2012 were roundly assailed as devastating for the economy and jobs; but good for the rich. Think Romney’s economic plan on steroids and even that may not give a clear picture of Trump economics. Still, President Obama wants Americans to relax and give Trump a chance to lead the nation as if we have any choice.
Not only do Americans not have a choice in the impending monumental shift of wealth to the uber rich, they can only ‘relax’ and anticipate rising interest rates, substantial inflation and high costs and fewer jobs. While most economists are predicting a recession, for the moment the only sure thing is that interest rates are already rising that is a signal that financial markets are bracing for higher inflation rates; and that is even before Trump is in office.
Rattner did note what most political observers and commenters who don’t work for Breitbart already knew long before the election even took place: Trump’s economic plan will “confer vast monetary gains on wealthy Americans while leaving middle- and working-class Americans – Trump’s electoral base – further behind.” The travesty is that all Americans who aren’t super-rich are going to be left behind and not just Trump’s nasty base. The offense to the senses is that Republicans were elected promoting an economic policy that has led to nothing but despair and deprivation and yet 56-million seriously stupid Americans want to do it again because a con man told them it would make American great.