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Regulatory relief and a corporate tax cut, combined with aggressive federal spending on national infrastructure, are likely to raise both the US growth and inflation rates — as the markets appear to think. That much can be expected from a Trump administration. Everything else is uncertain. The president-elect told a television interviewer on November 13 that he would deport 2 to 3 million illegal aliens immediately after his inauguration, although it is unlikely that an operation of such magnitude could be mounted in a short period time under any circumstances.

Of all Trump’s campaign pronouncements, the claim that illegal immigration had worsened economic life for ordinary Americans had the least foundation in economic fact and the strongest resonance among the voters. The actual count of illegal aliens in the United State appears to have fallen somewhat since 2008, if polling organisations like the Pew Institute are correct. But Americans who have difficulty diagnosing the economic problems that bedevil them see the impact of illegal immigration daily. Many voters made immigration a decisive issue, not because they believe that deportations will set the economy right, but because they saw it as a litmus test of whether candidates cared about them. Evidently Trump will make good on his promise, but its impact will be minor.

Few believe that Trump will start a trade war with China. Indeed, China’s stock market is one of the very few emerging equity markets to have risen since the election. Beijing evidently views the president-elect as a pragmatic businessman who drives a hard bargain, but whose object is to make a bargain at the end of the day.

Throughout the campaign, Trump was attacked as insufficiently vigilant about the Russians, or even (as former CIA Director General Michael Hayden alleged) “a useful fool” for the Kremlin. That can be dismissed as campaign Billingsgate. Trump’s closest adviser on national security, the retired chief of the Defense Intelligence Agency General Michael Flynn, published a campaign book with a very harsh view of Russia’s enmity towards Western democracy. The trouble that Trump will have dealing with the Russians (or the Chinese) is precisely the same as the trouble President Obama has had. The technological balance between America’s military on one hand and Russia and China on the other is no longer unambiguously in America’s favour. In Syria, for example, Russia has deployed advanced air defence systems which may be able to target and destroy American stealth aircraft. Because America has never engaged the new Russian system, the Pentagon does not know with certainty what it can do, but senior Air Force commanders do not wish to find out the hard way. Ironically, there is the no-fly zone in Syria that Mrs Clinton talked about during the second presidential debate, except that it is maintained by the Russians, not by the United States.

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ancient briton
January 29th, 2017
2:01 AM
Bearing in mind the distribution of IQ along a normal bell curve, there will always be a substantial group of people who can't cope with IT, indeed who may be functionally illiterate.Such people always had manual jobs in factories, farms, and local government cleaning the streets and so on. It is a very callous and foolish society that casts such people, many of whom have estimable qualities, aside, to survive on handouts. They form a part of the group who feel themselves displaced or worse forgotten by an establishment obsessing over BLM and LGBTQ rights and so on. Other better qualified people see their factories being transferred to low-wage countries, and know through every trip to Walmart that manufactured goods which could well be made in the States, are coming in from overseas. These conditions didn't exist under Roosevelt who governed an almost completely insulated economy and who had no thought of black rights, never mind LGBTQ etc. Reagan presided for the most part over a prosperous manufacturing country, although the rust belt was beginning to emerge. Many of those residents became Reagan Democrats. I see the Trump effect as being not dissimilar but now nationwide as the famous red map shows. Voters want a lot less by way of political correctness, and a lot more by way of making America the home of mass production once again. It's a tall order, but Trump is the only one who has it in him to recognize the problem, talk openly about it, and at least try to get things done. Scepticim at this early stage is just a little premature.

Hayward
January 23rd, 2017
11:01 PM
Reaganomics, that which started the US economy on the current slippery slope. The figures say it all, taking the USA from a creditor to a debtor nation. In 1981, shortly after taking office, Reagan complained of "runaway deficits" that were then approaching US$80 billion, or about 2.5%GDP Within only two years, however, his policies had succeeded in enlarging the deficit to more than US$200 billion, or 6 % At the end of the Reagan/Bush era it had was down to US$150 billion, still almost double what it had been under Carter. However the National Debt had climbed from US$995 billion, when Reagan took office, to $4 trillion by the end of Bush1's presidency, Under Reagan and Bush Republican Administrations it climbed as a % of GDP from 26% to 42%. Clinton managed hold/wind back both of them in returning the budget to a surplus of some US$280 billion and reducing the National Debt to 35% of GDP. But George, The Faux Texan and late encumbrance in the White House even managed to outdo "The Gipper" and his own Dad. He has set another unenviable record. The deficit was to be $482 billion in the 2009 budget moving from black to red ink in the order of US$750 billion from the end of Clinton's term. Lest We Forget The Faux Texan Folly of the Three Trillion Dollar Wars, The Iraq Fiasco and the Afghanistan Imbroglio followed now by the resultant wide spread conflict with Daesh. It is interesting to note that from 1978-2005 under Democratic Presidents, Federal Spending went up by 9.9%. Federal Debt by 4.2%, GDP by 12.6%. Under Republican Presidents Federal Spending was up 12.1%, Federal Debt by 36.4% , GDP by 10.7% So which is the big spending, big debt and drag on the economy party?

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