Sunday, May 8, 2016

Trump the Right-Wing Keynesian on Infrastructure

At least in terms of public rhetoric as described here and here. It is difficult to see how he could do both this and cut taxes (a promise of his) without driving the US into deep, deep deficits.

We can also turn to Chapter 12 of Trump’s Crippled America: How to Make America Great Again (New York, 2015). I am not sure how much weight one should attach to this supposedly ghostwritten book, which Trump signed off on. But for what it is worth we find the book praising infrastructure projects as a way to create jobs and even invoking the Keynesian multiplier and the positive effects of such infrastructure stimulus on private sector economic activity. “If we do what we have to do correctly,” we read, “we can create the biggest economic boom in this country since the New Deal when our vast infrastructure was first put into place.”

Although it gets cagey about how it is to be funded, we find it does admit that deficit-financed spending to some extent will have to be the method.

Naturally, hysterical libertarian blowhards are already up in arms. The Donald could be the Second Coming of FDR!

I already speculated here that Trump, if elected, could implement Reaganomics Mark II, with protectionism, large tax cuts, huge deficit spending, and presumably right-wing deregulation, just as Reagan did. There will probably also be a new labour market protectionism.

So all in all a mix of bad and good things.

But of course his rhetoric changes and is inconsistent, so we can’t really know.

Trump, Donald. 2015. Crippled America: How to Make America Great Again. Threshold Editions, New York, NY.

1 comment:

  1. Interesting. Paul Krugman has weighed in on Trump's fiscal plan in his latest op-ed.