I write this even though I supported Trump during election campaign with a hope that perhaps his elections would result in a change in monetary policy of the US Central bank (Fed). A decade of low interest rates and continuous rounds of QE have not only pumped up the Fed’s balance sheet by 4.5 Trillion USD but it has also created a huge bubble in US economy.
Although, President Obama claimed that there were 14 million jobs created during his tenure, the increase in the National debt could show that on average 1 million USD was spent to create 1 job in the economy. Such anemic has been the economic recovery under leadership of Obama and all fault lies in the monetary policy of the Fed under Obama. Now, During elections Trump did bash the Fed chair Janet Yellen for keeping rates too low for too long and also said that “Fed Chair Janet Yellen should be ashamed of herself” during his presidential campaign.
Now, President Trump is expecting the Fed to continue her low interest rates so that it would help in boosting infrastructure spending. Well, Just imagine another 4 years of low interest rates and how much damage will it do to the US economy. The stock market could swell with another round of QE but will it really lead to a revival of US economy? Well, If Trump follows 4 years of Obamanomics, he is sure to not get re-elected in 2020. All depends on who Trump elects as his next Fed chair in January 2018. If Trump re-elects Janet Yellen and US economy continues on its round of easy monetary policies, well, I guess the recovery of US economy would become next to impossible for whoever gets elected in 2020.
President Trump did not keep his promise to declare China as currency manipulator. Well, I believe Americans voted for President Trump as he is not a career politician and expect him to do things differently. Somehow, It is really scary that if President Trump cannot change the direction of US economy by restoring a free market economy and elect a new Fed Chair, who could do that work? Trump could reduce trade deficits by manipulating USD to increase US exports. He could reduce budget deficits by ensuring that monetary policy of the Fed changes so that wages of Americans keeps pace with their productivity.
Here is why we believed Trump would win 2016 elections back in February 2016
Here were ideas to help President Trump to achieve his goals
Giving corporate tax cut and cutting taxes to 20% is not going to spur job creation President Trump. If you believe low corporate taxes are a solution, please look at economy of Ireland where corporate tax rates are as low as 12.5%. The Irish economy is no great with such low corporate taxes. Also, Increasing Infrastructure spending and defense spending and at the same time giving tax cuts to corporations will certainly shoot up the National Debt significantly. I hope that your team does this basic math before they recommend to you such proposals. I wish you good luck President Trump. Let your presidency be different and hope you are able to keep all your campaign promises made to Americans.
PS- I would like to update this article…as proposal is not 20% but 15% corporate tax rate…well…what a disaster for US Economy at this stage….just a disaster….I hope Trump understands that he is running a country….and not just his company.
About the Author
Apek Mulay is a Business and Technology Consultant at Mulay’s Consultancy Services. He has authored a trilogy in three consecutive years viz. Mass Capitalism: A Blueprint for Economic Revival (2014), Sustaining Moore’s Law: Uncertainty Leading to a Certainty of IoT Revolution (2015) and How the Information Revolution remade Business, and the Economy: A Roadmap for Progress of the Semiconductor Industry with More than Moore and Beyond Moore (2016). His monograph on technology is entitled Improving Reliability of Tungsten Plug Via on an Integrated Circuitry: Process Flow in BiCMOS and CMOS technology with Failure Analysis, Design of Experiments, Statistical Analysis & Wafer Maps (2016). Mulay is author of patent Surface Imaging with Materials Identified by Colors. USCIS honored him with US permanent residency under the category of foreign nationals with extraordinary abilities in science and technologies. He engineer, economist, author, blogger and social entrepreneur in an e-commerce business http://Calcuttahandicraft.in .www.ApekMulay.com