Trump’s American Economy

Tim Altonji, Writer

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






Following the recent transition in power, administrative campaign rhetoric and promises to “Make America Great Again” are already being tested. For some, this means getting what they spent almost a year-and-a-half yelling about. And to them I say, “Congrats! You’ve won!” However, for the rest of us, this means that some of our worst nightmares–which we spent almost a year-and-a-half arguing against–may soon become reality.

Trump’s withdrawal from the negotiation process of the Trans-Pacific Partnership (TPP) will lead America’s economy in the opposite direction of “greatness.” Like the North American Free Trade Agreement (NAFTA), the TPP is a 5,500-page trade agreement between multiple nations (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, The United States, and Vietnam) designed to foster economic growth and allow more economic freedom, so as to inspire private investment. Trump has railed against the TPP, claiming that it fails to put “American interests first” and in doing so, he has begun supporting protectionist trade policies with the belief that putting all efforts into securing existing American jobs and maintaining a positive trade deficit will bring prosperity to the American consumer.

The United States has operated under a negative trade deficit since 1982 simply because large influxes of capital from foreign companies have allowed American consumers to obtain the goods they desire for cheaper. The percent change in GDP skyrocketed in 1983 from a -2% low in 1982 to an astounding 4% increase, proof that the negative trade deficit was of some worth to the nation’s economy.

Logistically, job loss to foreign competition–in one way or another–is inevitable through trade and is not always bad for society. The decline of the United States’ steel industry in the late ‘70s was largely attributed to increases in foreign production, due to innovation and the price of steel declining for foreign competitors. Even so, not all American steel mines went bankrupt. If steel is being bought for a lower price, the costs for American businesses–which demand steel–decrease, allowing for higher profits: profits which could, in turn, be put towards company investment and more job growth.

As for job creation, Trump seems steadfast that he does not want much of it in the public sector. Trump signed a presidential memorandum on January 23rd which, according to Michael D. Shear, a senior editor at The New York Times, “…ordered an across-the-board employment freeze for the federal government, halting hiring for all new and existing positions except those in national security, public safety and the military.” Trump clearly wants to make budget reforms, and by putting a halt to a large portion of government hiring, he aims to make that a bit easier. As for the private sector, Trump’s exact plans to create jobs is still uncertain, though, according to his campaign website, he plans to do so via “an America-First trade policy,” which most likely uses bilateral trade. Bilateral trade agreements, according to Investopedia.com, “facilitate trade and investment by reducing or eliminating tariffs, import quotas, export restraints and other trade barriers.” So, if Trump aims to increase tariffs on Chinese goods, his “America first” trade deal would be shooting itself in the foot; higher trade barriers will cause Chinese businesses to stop competing in the U.S. market, meaning less competition, and higher prices, leaving the American consumer worse off. No deal, Howie.

Finally there’s the issue of our personal health: first there was “RomneyCare” then there was “ObamaCare” and in the coming months, we may see“TrumpCare” in the works. Health care is complicated, and the costs of taking a universal approach in favor of others, causes different members of society to lose out on benefits. I am not a huge fan of The Affordable Care Act, but there are still provisions in the bill that I do like, including how individuals with pre-existing conditions cannot be turned down for coverage. So, someone who is born with a heart defect, for example, can get the coverage they need. There is no true equality in this world, and there never can be, but people born with severe disabilities, whose need for medical care is greater than that of the general population, should not have to be at the mercy of a company throwing them to the curb because they are “too much of a liability.” The main issue with ObamaCare is the fact that it forces people to have insurance. Forcing people to pay a penalty for making a decision which does not adversely affect others is simply wrong. Freedom is just as important as governance in society, and I hope that Donald Trump will someday find this to be true. But looking at the initial direction in which Trump is steering our nation, I doubt this dream will come to fruition.

 

Leave a Comment

If you want a picture to show with your comment, go get a gravatar.




Trump’s American Economy