June 21, 2016

Moody Analytics: There would be a Trump recession


Donald Trump’s presidency would “significantly” weaken the country, driving the U.S. into a “lengthy recession” with nearly 3.5 million job losses and a 7 percent unemployment rate, according to a Moody’s Analytics analysis.

The analysis examined the presumptive Republican presidential nominee’s economic plans at face value, based on interviews, speeches and his campaign website. The authors of the report, however, warned that quantifying the real estate mogul’s economic polices “is complicated by their lack of specificity.”

“Broadly, Mr. Trump’s economic proposals will result in a more isolated U.S. economy. Cross-border trade and immigration will be significantly diminished, and with less trade and immigration, foreign direct investment will also be reduced,” Mark Zandi, Chris Lafakis, Dan White and Adam Ozimek wrote in the report.

His policies would also diminish the country’s growth prospects, grow federal government deficits, increase the nation’s debt and finance his “mix of much lower tax revenues and few cuts in spending” with “substantially more government borrowing.”

“Driven largely by these factors, the economy will be significantly weaker if Mr. Trump’s economic proposals are adopted. Under the scenario in which all his stated policies become law in the manner proposed, the economy suffers a lengthy recession and is smaller at the end of his four-year term than when he took office,” the authors wrote. “By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today. During Mr. Trump’s presidency, the average American household’s after-inflation income will stagnate, and stock prices and real house values will decline.”

1 comment:

greg gerritt said...

As much as Trump's "policies " would be a disaster, it is reasonable to conclude that due to climate change and ecological collapse the American economy is going to shrink no matter who is president. The key goal has to be to create prosperous communities in an economy that is shrinking so as to reduce its carbon footprint and impact on forests and other resources. This is going to require an economy that trends much more to economic equality than the current system.