DONALD TRUMP’S INABILITY MAY RESULT IN COLLAPSE

Donald Trump made a lot of promises during his 2016 presidential campaign. Among other promises, Trump said that if he is elected, tax reforms would be at the top of his priorities.

When the results of elections were announced, an anticipation of reforms created the uplift mood among the business community.

It is difficult to explain why corporate America and regular people expected something positive. Donald Trump does not have any experience in running the country nor he knows tax legislation. Nevertheless, people continue to expect positive changes even when members of Trump Administration presented 1-page proposal.

Tax Law, in my opinion, is the most complicated. If we list down just titles of all laws, sub-law acts and related regulations which constitute tax legislation and consider the sheer size of the United States’ economy, the list will 20 pages long at least.

People should have realized that their expectations are unlikely to materialize. But it seems that when we want to believe in something, nothing can stop us.

Recently, CNN Money calculated what the Senate tax bill would do for the middle class and other income groups.

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Interestingly, according to Reuters, Goldman Sachs said it expects a tight U.S. labour market and more normal inflation picture will lead the Federal Reserve to hike interest rates four times next year.

Bloomberg reported that the New York-based investment banking and securities firm raised its growth outlook for 2018 to 2.5 percent and lowered its forecast for unemployment to 3.7 percent by the end of 2018, said Goldman chief economist Jan Hatzius, a co-author of the note, which was released by email late Friday.

Back in May 2017, Bloomberg published Rising Investor Confidence Is Premature”. Two important reasons explained premature nature of the investors’ confidence. Future action by the Federal Reserve, and likely movements of key financial variables, may well reward investors continuing to seek safety rather than higher-risk opportunities in financial markets.

 

IN GENERAL. Consumer confidence and investors’ confidence are vitally important for the U.S. economy.

If the Senate tax bill will become a law, it would further shrink income of middle-class groups which, obviously, reduce household’s spendings. Lower spendings and, possibly, increase in loan defaults could lead to a lower growth

It would also widen the wealth gap in the U.S. further.

The tax bill may significantly increase the U.S. sovereign debt. It would eventually result in the country’s default.

Donald Trump promised a lot during his 2016 campaign but delivered nothing substantial. Instead, his policies appear to make people’s lives tougher and may eventually cause a total collapse.

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