There is a fascinating article about where the American economy may be headed during Donald Trump’s presidency on the BBC website. It is noted in the article that Trump spoke often during the campaign about his desire for tax cuts along with more spending on infrastructure, and he is likely to follow through on this plan now that he has the power to do so.
Cutting taxes, however, probably means more borrowing by the government. While taxes cuts would be popular with the now Republican-controlled Congress, more debt wouldn’t be at all, so perhaps Trump won’t be able to accomplish all that he wishes in this regard. Speaker of the House Paul Ryan, in particular, is known for being against increasing the deficit.
One interesting observation in the article is Trump’s plans would likely put the major responsibility for the continued economic recovery of the nation in the hands of the White House rather than the Federal Reserve. However, this may not sound so bad to Federal Reserve chairwoman Janet Yellen because it would give her the option to raise interest rates and thereby give herself the chance to lower them in the future if the economy takes a downturn.
It is mentioned that while the economy recovered somewhat from the crash of 2008 during Obama’s administration, this was a sluggish process, especially in rural areas. Discontent in the heartland about the situation was a big factor in Trump winning the election.