Letter: Is Trump keeping his economic promises?
Then-Presidential candidate and now President Donald J. Trump made numerous economic promises.
Let’s examine whether he has kept those promises, keeping in mind that he had an overwhelming majority of Republicans in both houses of Congress during the first two years of his term. And then let’s talk about whether keeping some of those promises has made America great again?
He promised to create 25 million jobs over 10 years, eliminate the federal deficit in eight years, increase economic growth to 4 per cent a year, bring manufacturing jobs back, raise wages, cut taxes, impose tariffs on Chinese and Mexican products, renegotiate or withdraw from the Trans-Pacific Partnership and the North American Free Trade Agreement, repeal and replace Obama Care with a market-based alternative, and he promised to leave Social Security alone.
TRUMP: I WILL CREATE 25 MILLION NEW JOBS OVER 10 YEARS
Trump has created 1.5 million fewer jobs than Obama over a similar period of time. The number of new jobs created in the last year has averaged 148,000 per month. And the number of new jobs each month is spiraling down as we head towards recession even though the federal government hired 25,000 people to help with the census. Trump needs an average of 2.5 million new jobs per year. His numbers total 1.76 million. These numbers come from the U. S. Department of Labor.
Trump is not keeping his promise.
TRUMP: I WILL ELIMINATE THE FEDERAL DEFICIT IN EIGHT YEARS
Not only has Trump not eliminated the federal deficit, he has increased it by 59 percent. Trump inherited a budget deficit of $585 billion in January 2017. That was 58 percent lower than the $1.4 trillion deficit that Obama inherited from Bush II in 2009. The Congressional Budget Office estimates that the current deficit will soon hit $984 billion, nearly $1 trillion, and it keeps rising.
Trump is not keeping his promise.
TRUMP: I WILL INCREASE ECONOMIC GROWTH TO 4 PERCENT PER YEAR
The Trading Economics analysts, who track and predict these things, say that the U. S. growth rate has fluctuated between 1.9 percent and 2.5 percent, although it touched 3.1 percent during one month of the Trump presidency.
Trump is not keeping his promise.
TRUMP: I WILL BRING BACK MANUFACTURING JOBS
Several companies and countries have announced during the past two years their intentions to relocate or establish manufacturing plants in America. Unfortunately, Trump’s trade wars and the fluctuating value of the U.S. dollar have kept most of those jobs away, according to the Reshoring Initiative, a nonprofit group whose mission is to help bring well-paying manufacturing jobs back to the USA. Instead, those promised jobs have gone to Asian countries, such as Vietnam. It concludes that manufacturing is struggling because of Trump’s trade war, a war he has said that he will escalate.
Trump is not keeping his promise.
TRUMP: I WILL RAISE WAGES
Whose wages? The promise is so vague as to make it almost impossible to evaluate. We have many types of workers. Seasonal, part time, full time, hourly, salaried, supervisory, etc. Therefore, I will defer to the economic experts at the Brookings Institute, who, among other resources, rely on the Bureau of Labor Statistics.
Real wages (adjusted by inflation) peaked in about 1973 for average weekly earnings of production and nonsupervisory employees. That was also generally true for workers who were paid by the hour. But it appears that wages increased across the board under Clinton by 6.4 percent, Bush by 4.2 percent, Obama by 4.2 percent and now Trump by 2.3 percent.
Of course, if your paycheck is a collection of nickels and dimes, does it really matter when you pick up a few more pennies? But the numbers used to measure previous presidents lead to one conclusion relative to Trump.
Trump is keeping his promise.
TRUMP: I WILL CUT TAXES
Trump signed the Tax Cuts And Jobs Act of 2017. It permanently cut the top corporate tax rate from 35 percent to 21percent. The top individual tax rate dropped to 37 percent but expires at the end of 2025. 2017 tax rates go back into effect for individuals in 2026. The plan also doubled standard deductions while eliminating most itemized deductions.
Trump is keeping his promise.
TRUMP: I WILL IMPOSE TARIFFS ON CHINA AND MEXICO
Statistics from the World Bank indicate that Trump has imposed tariffs on China, Japan, the European Union, India, Canada and Mexico. He says he will add even more tariffs.
Trump is keeping his promise.
TRUMP: I WILL RENEGOTIATE/WITHDRAW FROM TPP AND NAFTA
The TPP was not in effect when Trump became president but he did withdraw the US promise to join. The other countries went on without the USA.
Trump withdrew from NAFTA and after renegotiation signed a new draft. Economists describe the changes as minor tweaking.
Trump is keeping his promise.
TRUMP: I WILL REPEAL AND REPLACE OBAMA CARE
The Affordable Care Act has not been repealed or replaced.
Trump is not keeping his promise.
TRUMP: I WILL LEAVE SOCIAL SECURITY ALONE
Trump is keeping his promise for now.
What is the net economic effect of Trump’s presidency, so far? And, in those areas in which Trump has kept his economic promises, is that a good thing?
The eight-year Obama budget deficit has nearly doubled under less than three years of Trump. Nonpartisan economic evaluators describe the Trump tax cut as a fiscal disaster that will add trillions of dollars in debt over the next 10 years. Republicans now say that the rising debt is a threat to national security because it decreases money available for military budgets and because China is the largest foreign holder of American debt. Of course, those Republicans who complain the loudest are the same ones who voted for the 2017 tax cut that has ballooned that debt.
Republican senators Thune and Barasso stated to Forbes Magazine in August that, in their discussions with Trump, they have agreed to cut Social Security and Medicare benefits in Trump’s second term in order to mitigate the national debt that they have worsened. They have also agreed that those cuts would be on the table if a recession were to hit.
Republicans may not be coming for your guns but they are coming for your Social Security and Medicare benefits.
Trump has paid farmers $28 billion to mitigate the damage his tariffs have done to the exports of American farm products. That figure is three times what Obama paid (without payback) to keep American car manufacturers in business after the Bush recession. But the Trump welfare checks to farmers don’t cover what farmers have lost as they become unable to sell to foreign markets because those other countries have levied tariffs on American products. China has targeted American farmers by placing tariffs on their products as a tit-for-tat for Trump tariffs.
As an example of how Trump’s tariffs have come home to roost, the Financial Times reported that the US exported 4.3 million tons of soybeans to China during the first five months of 2019, down from 15.2 tons in the same period of 2018. This is the Trump who said that trade wars “are easy to win”.
This past summer, Trump demanded that American companies leave China and stop doing business with China. While he has no authority to back up that demand, the costs to American companies if they were to comply are nearly incalculable. General Motors sold 3.64 million vehicles in China in 2018, 43 percent of its global sales. Ford Motor Company reported Asian revenues last year of $12.4 billion, mostly from China.
Equipment manufacturer Deere has lowered its earning forecast for this year twice in large part because of the Trump tariffs. The American Action Forum tells us that the tariff costs added to US steel and aluminum totaled nearly $5 billion in 2018. Harley-Davidson says that it will pay $100 million in tariff costs in 2019.
Trump repeatedly claims that China pays the tariffs he has imposed. That’s not true. When Chinese goods come into the US, the tariffs are paid by American importers. Those costs are then passed on to American consumers. Some economists have described Trump’s tariffs as the largest tax increase in American history.
The Tax Foundation said in May 2019 that “The Trump Administration has so far imposed over $86 billion worth of new taxes on Americans by levying tariffs on thousands of products.” They conclude that Trumps tariffs will reduce the Gross Domestic Product by $62.50 billion, cut wages by .16 percent, and eliminate 193,649 full time jobs. And the results will be even worse if Trump continues to pile on the tariffs as he has promised. The costs associated with other countries’ retaliation reduce the GDP by $168.71 billion, cut wages by .43 percent and eliminate 523,000 jobs.
The Consumer Technology Association has concluded that tariffs are costing the US tech industry $1.3 billion a month. The American Apparel & Footwear Association estimates that 77 percent of US imports of clothes and shoes from China will be hit by the next round of Trump tariffs.
The International Monetary Fund said in July 2019 that global trade in the first quarter of 2019 was the slowest since 2012 and laid the blame at Trump’s trade wars. More recently, it estimated that Trump could cost the global economy $700 billion.
None of these added financial burdens, deficits, and slowed sales are Trump’s fault, according to him. Trump said in August on Twitter that “Badly run and weak companies are smartly blaming these small tariffs instead of themselves for bad management...” Trump said that we don’t have a tariff problem. He said that all we needed was for the central bank to cut interest rates as if the two were somehow connected. Trump also claimed that the tariffs had absolutely no impact on American consumers: ”virtually none”.
Unfortunately, three independent studies have concluded that virtually all tariffs have been paid by US consumers and businesses. The United States Chamber of Commerce issued a statement in August that said, ”The negative consequences of tariffs include higher prices for consumers and businesses, retaliation by foreign governments, and a weakening of the global rules-based trading system that will harm US interests in the long run”.
Even Fox Business has criticized Trump for his loser trade wars.
California, already saddled with absurdly high home prices, has been hit with an additional $20,000-$30,000 in costs per new house attributable to Trump’s tariffs on building materials, counter tops and appliances, according to the California Building Industry Association. California wines have been hit with a 93 percent surcharge because of the Trump trade war. A $15 bottle of Napa wine now costs $30 when sold to China — and they are not buying. Australian and Chilean wines are filling the gap that used to be California wines. The US exported $1.46 billion in wine to China in 2017 with 95 percent coming from California.
Trump is clearly, clearly failing to make America great again. His apprenticeship as president must be canceled. Our country and our planet cannot afford season two of President Donald J. Trump.
— Charles A. Wieland,
Madera
