The presidential election is undoubtedly the most significant event that has happened in the United States of America in the past month. Furthermore, the election result will have a significant impact on the global economy, as the U.S. is one of the world’s largest economies. Neil Irwin, in his The New York Times publication “Why the Trump Team’s Economic Promises Will Be Hard to Execute” discusses the difficulty of implementing some of the Donald J. Trump’s promises from an economic perspective. Thus, in this paper, I will discuss this article and the impact that the U.S. election results can have on other countries.
Neil Irwin (2016) suggests that “promised economic growth targets that will be difficult to achieve given modern demographics” (para. 3). The publication heavily focuses on the tax reform, as the Trump team claim it to be “the largest tax change since Reagan” (para. 8). The author (Irwin, 2016) suggests that, though Trump’s policy makers promise the tax cut to have the most impact on the middle class, it will benefit the wealthiest households the most. In addition, he concludes by suggesting that to achieve the economic objectives of the Trump team some macroeconomic variables must change, such as immigration trends or productivity. However, in this case, the administration of the President-elect will have to break some of its other promises.
I agree with the article, as I believe that the economic agenda of Donald J. Trump sounds too good to be true. Lower taxes will result in a higher level of sovereign debt, which puts pressure on the economic growth. The U.S. economy is too big to grow at high rates without any significant change of the fundamental economic variables.
The result of this election and future U.S. economic policies are very important for the global economy. In my opinion, there are several channels how the U.S. economy can influence global markets. First, currency. The U.S. dollar is the major trading currency, so any fluctuation in its value has an enormous impact on global financial markets. Second, trade. The U.S. demand for foreign products is a significant driver of global economic growth. Thus, lower demand due to economic difficulties might offset slower global growth.
In conclusion, this paper analyzes the article “Why the Trump Team’s Economic Promises Will Be Hard to Execute” by Neil Irwin. It is highly unlikely that the Trump team will be able to fulfill all its economic promises, which might endanger the global economy.
- Irwin, N. (2016). Why the Trump Team’s Economic Promises Will Be Hard to Execute. NY Times.