A Very Trumpian Year
Economic and political outcomes are intertwined and mutually reinforcing. And in 2019, the consequences of the bad policies and worse politics of the last two years will come more fully into view – and not only in the United States.
NEW YORK – At the end of 2017, US President Donald Trump’s administration and congressional Republicans rammed through a $1 trillion cut in corporate taxes, partly offset by tax increases for the majority of Americans in the middle of the income distribution. But in 2018, the US business community’s jubilation over this handout started giving way to anxiety over Trump and his policies.
A year ago, US business and financial leaders’ unbridled greed allowed them to look past their aversion to large deficits. But they are now seeing that the 2017 tax package was the most regressive and poorly timed tax bill in history. In the most unequal of all advanced economies, millions of struggling American families and future generations are paying for tax cuts for billionaires. The United States has the lowest life expectancy among all advanced economies, and yet the tax bill was designed so that 13 million more of its people will go without health insurance.
As a result of the legislation, the US Department of the Treasury is now forecasting a $1 trillion deficit for 2018 – the largest single-year non-recessionary peacetime deficit in any country ever. And if that were not bad enough, the promised increase in investment has not materialized. After giving a few pittances to workers, corporations have funneled most of the money into stock buybacks and dividends. But this isn’t particularly surprising. Whereas investment benefits from certainty, Trump thrives on chaos.