Moody’s Analytics, a subsidiary of Moody’s Corporation that provides risk assessment, took at look at Donald Trump’s economic policy proposals and came away with a very grim picture of what Trump’s America would look like.
Moody’s analysis says the American economy under Trump would be “isolated and diminished” and that millions of people would lose their jobs.
The analysis is quite extensive and you can read it in full at the link, but here’s the gist of it:
Broadly, Mr. Trump’s economic proposals will result in a more isolated U.S. economy. Cross-border trade and immigration will be significantly diminished, and with less trade and immigration, foreign direct investment will also be reduced.
While globalization has created winners and losers in the U.S. economy in recent decades, it contributes substantially to the ongoing growth of the U.S. economy. Pulling back from globalization, as Mr. Trump is proposing, will thus diminish the nation’s growth prospects.
Mr. Trump’s economic proposals will also result in larger federal government deficits and a heavier debt load. His personal and corporate tax cuts are massive and his proposals to expand spending on veterans and the military are significant. Given his stated opposition to changing entitlement programs such as Social Security and Medicare, this mix of much lower tax revenues and few cuts in spending can only be financed by substantially more government borrowing.
Driven largely by these factors, the economy will be significantly weaker if Mr. Trump’s economic proposals are adopted. Under the scenario in which all his stated policies become law in the manner proposed, the economy suffers a lengthy recession and is smaller at the end of his four-year term than when he took office (see Chart). By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today.
Interestingly, much of the analysis is centered around the economic impacts of Trump’s anti-immigration and anti-trade policies, emphasizing that both immigration and international trade (these are related) have made America’s economy stronger overall, not weaker.
While reading their analysis I couldn’t help but think about the obvious comparisons to Bernie Sanders who did not run on an anti-immigration platform but did run on an anti-trade platform, even going so far as as to call for shutting down the Export-Import Bank which helps American businesses export America-made goods to other nations.
The good news is Bernie Sanders is not the Democratic nominee, because if he were some of the policy positions we would use against Trump could also be used against Sanders.