by Calculated Threat on 11/11/2024 11:53:00 AM
After the election in November 2016, I identified that the economic system was stable, that there have been important financial tailwinds and that it was unlikely that Mr. Trump would do all the things he stated throughout the marketing campaign (emphasis added). See: The Future continues to be Shiny! and The Cabinet is Full. I used to be fairly optimistic on the financial outlook!
By early 2019, I used to be changing into extra involved: “So far Mr. Trump has had a limited negative impact on the economy. … Fortunately the cupboard was full when Trump took office, and luckily there hasn’t been a significant crisis“. Sadly, the COVID disaster struck in early 2020 and Trump carried out poorly.
As soon as once more, the economic system is in good condition (final week Fed Chair Powell referred to as the economic system “remarkable”), and it’s unlikely Mr. Trump will do most of what he stated throughout the marketing campaign. For instance, he promised no taxes on suggestions or additional time, the return of $2 gasoline, repealing and changing the ACA, and deporting 20+ million individuals. All of that’s unlikely. There are a lot of different proposals, resembling revamping the Federal workforce and dramatically reducing the Federal price range, which can be unclear.
Trump will possible renew the tax cuts for the rich, enhance tariffs – particularly on imports from China – restrict authorized immigration (Trump stated the “Country is full”), and enhance deportations (however not anyplace near the 20 million he stated throughout the marketing campaign). Word: I do not count on any tariffs on Canada and Mexico.
Nevertheless, the financial tailwinds are extra restricted in 2024 than in 2016, so the margin for error is smaller.
Click on on graph for bigger picture.
The primary graph exhibits single and multi-family housing begins since 2000.
The black arrow factors to the election in 2016, and I used to be projecting additional will increase in housing begins.
It now appears possible that housing begins will transfer extra sideways.
Additionally, in 2016, demographics had been bettering, and the most important cohort in US historical past was transferring into their peak incomes years. Now, demographics are extra impartial, and presumably even adverse if authorized immigration is restricted.
Additionally, I do not count on any progress over the subsequent 4 years on key long-term financial points like local weather change and revenue / wealth inequality (that may possible worsen).
Since Trump’s insurance policies won’t be proof primarily based (he rejects information that does not match his views), I count on usually unhealthy outcomes. Nevertheless – as in his earlier time period – unhealthy insurance policies may imply increased deficits with little return – not an financial downturn. Till we see the precise coverage proposals, it’s arduous to foretell the influence. I’ll write extra as insurance policies are enacted. Nevertheless, I am not sanguine.
