What a Trump presidency means to the U.S. economy

On balance, it looks quite positive

The short and direct language of the Republican platform is refreshing. After a long preamble reciting history and ideology, the platform is presented in twenty points.

A few comments on each.

1. Close the border. Closing the border will ease the pressure on housing markets and ensure lower unemployment but will tend to increase wage pressures and contribute to higher prices. Whether wage growth will outstrip price rises will depend on the effect of other policies proposed.

2. Deport illegals. Costs for support of illegals already in United States will fall taking some of the pressure off hospitals and schools and freeing up some housing stock but, like closing the border, will manifest itself in some labor consequences.

3. End inflation. Easier said than done. High energy costs are a significant contributor to inflation and energy policies should increase fossil fuel production while reducing subsidies to higher cost and unreliable renewables should reduce energy costs over time.

4. Make America the dominant energy producer. Higher output of oil, gas and coal will improve the country’s trade balance and generate substantially more royalties and taxes from this key sector.

5. Stop outsourcing. This will be a challenge, but may see domestic manufacturing increase with salutory effects on the economy and wages. Combined with the promise of productivity from advances in AI, higher U.S. manufacturing will benefit the economy and the fiscal balance.

6. Tax cuts and no tax on tips. The devil will be in the details. No tax on tips will ease the cost of IRA tax enforcement on hospitality workers and help lower income workers in those industries make ends meet. Extending the past Trump tax cuts is really no change in taxes and should not materially worsen fiscal balances.

7. Defend the Constitution. The right policy but with little economic effect in my opinion.

8. Prevent wars. An ambitious goal that is really out of the hands of the United States, but a stronger military has some deterrent effects. Ending the Ukraine war will likey require concessions to Russia.

9. End the weaponization of government. Cutting the size and power of the non-elected bureaucrats will help make America return to its traditional values of free markets and personal opportunity unbridled by needless regulation.

10. Strengthen law enforcement captures this essence of this policy. About time.

11. Rebuild cities. Investment in infrastructure is a sensible policy.

12. Strengthen the military. Change in leadership is more important than spending more money on weapons. A volunteer force can be strengthened by getting the “woke” policies out, paying soldiers well, and treating veterans with respect. The details will matter.

13. Keep the dollar as the U.S. reserve currency. More a hope than a policy since the rest of the world makes that determination, not U.S.A.

14. Protect social security. The challenge will be to finance entitlements. Higher contributions from payroll taxes may be necessary.

15. Cancel EV mandates. Electric vehicles are great advances but to be mainstream they need to attract buyers on their own merits. Letting the market work without government intervention is the right policy.

16. Cut funding for CRT etc. About time. American schools are cesspools of communist and socialist ideology and our kids need education, not indoctrination.

17. Keep men out of women’s sport. This is essential to fairness and overdue.

18. Deport pro-Hamas radicals. Anti-semitism has no place in American universities.

19. Secure elections. Proof of citizenship to vote is all that is really needed, and almost every democracy but the U.S. enforces this.

20. Unite the country. Prosperity is unifying, divisive DEI policies are not. If the other policies are effective, a more unified America will result.

My reaction to the GOP policy statement is that at its core it is similar to what Canadian Liberals stood for the in 1950’s to the extent there are any parallels in Canada, and certainly captures the spirit of American history. Free markets, personal freedom, sensible regulation, effective law enforcement, a working social safety net, and a robust economy. If Trump is elected and follows through, he really will “Make America Great Again”.