Tag: National Science Foundation

Still, it is not easy to speed up a $20tn economy, even by running a budget deficit of nearly $1tn, as Trump’s administration is doing. | Hans-Werner Sinn Read more In a cantankerous political environment, it is not easy to think about the long term. Ronald Reagan’s massive tax cuts in the 80s helped restore US growth in the ensuing decades – but also exacerbated inequality trends. And Barack Obama’s efforts (and before him George W Bush’s) to contain the damage from the 2008 financial crisis underpin the strong economy for which Trump wants to take full credit. What will be the cumulative effect of Trump’s economic policies on the economy 10 years from now? The end-of-2017 corporate tax reform was one of those rare instances where the US Congress comprehensively streamlined and improved the US’s byzantine tax system, though the corporate tax rate should have been set at 25%, not 21%. Trump’s efforts to scale back regulation, particularly on small and medium-size businesses, are probably also a plus for long-term growth, reversing some excesses that crept in at the end of Obama’s term (though Trump is throwing out good regulations with bad ones). Many of the regulations that Trump is targeting ought to be strengthened, not eliminated But while the Trump administration has strengthened the US economy’s long-term growth potential in some ways, the other side of the ledger is rather grim. Recovery from the damage Trump is inflicting on institutions and political culture in the US may take years; if so, the economic costs could be considerable. On the other hand, neutering existing legislation without putting anything adequate in its place sets the stage for another financial crisis.