Timothy Noah, New Republic - What is this make-believe rationale that’s rapidly evolving into what we’ll be bound to call Trumponomics? Here are its major precepts.
Trump inherited a weak economy from President Joe Biden...To make this argument you have to ignore virtually every economic indicator. Under Biden, unemployment fell from 6.3 percent to 4 percent; gross domestic product grew from minus 3.5 percent to 2.8 percent; etc. True, inflation spiked from 1.4 percent to 9.1 percent in June 2022, but Biden brought that back down to 3 percent by the time he left office....
The practical problem with blaming Biden is that under Trump the economy is getting not better but worse as Trump’s incipient trade war tanks the stock market and consumer confidence....
The economy is in detox. Government spending was 30.6 percent of GDP during Trump’s last year in office and 23.1 percent during Biden’s last year in office....
In truth, neither Trump’s 30.6 percent of GDP nor Biden’s 23.1 percent posed much problem in our mixed economy. To the extent there was (and remains) a problem, it’s that the federal budget deficit is too high—a continual worry to the bond market. So how can the Trump administration be talking about cutting taxes, not only by extending the 2017 tax cut but also by ending taxation of Social Security benefits and overtime pay and, most recently, according to Commerce Secretary Howard Lutnick, by eliminating all income tax for anybody earning less than $150,000 per year? Because:
Tax cuts increase revenues. No serious person believes this, but Republicans are obliged periodically to pretend that they believe it...
Inflation doesn’t matter. “Access to cheap goods is not the essence of the American dream,” says [Treasury Secretary Scott] Bessent. Tell that to the 76 percent of Trump voters who on Election Day said inflation was a source of “severe hardship” (as opposed to only 23 percent who saw inflation as “severe hardship” and voted for Kamala Harris).
Stock market dips are good for you. “I’ve been in the investment business for 35 years,” says Bessent, “and I can tell you that corrections are healthy. They’re normal. What’s not healthy is straight up. You get these euphoric markets. That’s how you get a financial crisis.”....
In sum: Trumponomics dictates that economic growth based on government spending is evil, that cutting taxes reduces government deficits, that what Bessent sneeringly calls “cheap baubles from China” corrupt the soul; and so does a rising stock market.
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