U.S. President-Elect Trump promised to achieve 3.5% growth rates annually during his term, but it would be difficult to achieve this growth rate because of low productivity rates and low labor participation rates due to the aging population.

His economic team will try to achieve this growth rate by

1. Deregulating : Relaxing environmental regulations and laws so that more investments in the energy industry can create more jobs . Eliminating the Volcker’s rule in Dodd-Frank act in financial sector

2. Reforming taxes and cutting taxes ($9.5 trillion dollars)- Reducing five tax brackets to three tax brackets, reduce the corporate tax rate from 35% to 15% and individual income taxes.

3.Increasing the government spendings on infrastructure  (possible $1 Trillion dollars for 10 years)

However, the following chart displays that the projected/potential GDP growth rate would stay around 2.2%. Only way to increase the GDP growth rate is borrowing more, in another word, increasing the national debt (expects to add $5.3 trillion).

wp-1481117168079.png

Source article :http://www.wsj.com/articles/aging-population-stagnant-productivity-challenge-donald-trumps-growth-plan-1480871527?mod=e2twe

https://research.stlouisfed.org/publications/economic-synopses/2016/03/04/revisiting-gdp-growth-projections/?s

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s