Donald Trump's economic agenda is hardly the most disturbing thing one can imagine happening in a Trump presidency. What would he do, for instance, if America suffered a major terrorist attack — impulsively bomb someone, somewhere, with the same erratic disregard he exhibits on Twitter? Or what would this petty man, who finds no slight too small or offense too minor to prompt never-ending grudges, do with the nation's massive spying apparatus at his disposal? A bit of tape over your webcam might provide insufficient privacy protection against the all-seeing eye of President Trump.
But such speculations are difficult to quantify. Modeling Trump's economic plans, on the other hand, is comparatively easy. And indeed, on Monday, two nonpartisan organizations offered serious appraisals of Trump-onomics.
There was little in their findings to suggest Trump and his advisers have constructed his policy proposals with an equally serious approach.
The Tax Foundation reckons that Trump's plan to slash personal and corporate taxes would reduce federal revenue by between $4.4 trillion and $5.9 trillion over a decade, not assuming any possible pro-growth economic feedback. But even when optimistically factoring in better incentives to work and invest — what tax wonks call "dynamic scoring" — the plan would still lose between $2.6 trillion and $3.9 trillion over the next decade. That means that even assuming gangbusters growth, Trump would greatly worsen the nation's debt situation.
Now some Trump supporters, such the GOP's Reagan-era "supply-siders," might point out that critics made similar complaints about Ronald Reagan's big tax cuts and things turned out alright. But the U.S. government is in a much different fiscal situation today than in 1981, or even a decade ago. America's 74 percent debt-to-GDP ratio is at a historically high level, more than twice what it was pre-Great Recession and three times the level it was when the Gipper took office. What's more, none of this added Trump debt accounts for the massive new spending Trump has promised on the military and infrastructure. Trump has also said he doesn't want to fundamentally reform middle-class entitlements, a key driver of future budget deficits.
Trump has mused before about how he enjoys playing with debt. And to wit, when I questioned Trump economic adviser Stephen Moore about the plan's red ink during a radio interview, he replied, "Whether it's going to pay for itself, I don't really care." The Congressional Budget Office is less sanguine, however, warning America's debt trajectory risks weaker economic growth going forward.
Now, as it turns out, the Tax Foundation does not take into account the economic effects of interest on debt. (Lucky for Trump!) The Tax Foundation also didn't try to model Trump's protectionist trade agenda. But the Peterson Institute for International Economics did.
In a new analysis, Peterson looks at what might happen if the Trump administration imposed a big tariff on imports from China and Mexico, with those nations responding in kind. The projected result would be recession and the loss of nearly 5 million jobs at the downturn's nadir in 2019. And depending on how exactly the conflict played out and how global supply chains were affected, American consumers — at least those who still had jobs — might find it tough to buy their favorite electronic gadgets.
From the report:
The iPhone could be China's secret weapon in retaliation. … [C]utting off supplies to Apple could severely disrupt the availability and increase the price of a beloved consumer product. Moreover, with Chinese firms moving into the smartphone market, China could disrupt not only the production of iPhones but also supply the alternative models. The collective howl of pain might induce even the most ardent protectionist to reconsider. [Peterson Institute for International Economics]
The GOP loves to think of itself as the "party of ideas." It even has a policy wonk as its top elected official, House Speaker Paul Ryan. Likewise, it likes to portray the Democratic Party as intellectually exhausted, with nothing new to offer voters. But the Republican nominee for president has put forward a totally unserious agenda. Does the GOP care?
Republicans say they care about fiscal discipline, but their nominee would greatly increase the national debt with deep tax cuts and new spending. Republicans say they care about the middle class, but their nominee's tax and child care plans are lopsided toward wealthier families. Republicans say they care about economic growth, but their nominee would launch an economically destructive trade war.
And, of course, Trump-onomics isn't even close to the worst thing about Trump.