IF YOU set out to design policies to hamstring the economy, you might end up with something resembling Donald Trump’s agenda. America’s next president threatens to erect trade barriers, which would disrupt supply chains and dampen productivity growth. He wants to deport many of America’s 11m illegal immigrants, which could reduce the size of the labour force by up to 5%. And his tax plan is ruinously expensive, costing almost $7trn over a decade, or around half of America’s outstanding national debt. How much damage can President Trump do?
Mr Trump’s tax-and-spending policies must pass through Congress. Until recently, that would have made his tax cuts vulnerable to a Democratic filibuster in the Senate. But thanks to a rule change in the latest budget deal, the Republicans can now pass even unfunded tax cuts with only a simple majority, explains Richard Kogan of the Centre on Budget and Policy Priorities, a think-tank. (To do so, they must include sunset clauses, as George W. Bush did when he cut taxes in 2001.)
So it will be up to congressional Republicans to moderate Mr Trump’s plan. The tax cuts Paul Ryan, Speaker...Continue reading
Source: United States http://www.economist.com/news/united-states/21709950-his-tax-plan-can-be-moderated-his-protectionism-will-be-more-difficult?fsrc=rss
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