Tax Reform, Trade Policy, Financial Regulation, and Natural Disasters. Boston, MA November 2 nd, 2018

Transcription

1 Tax Reform, Trade Policy, Financial Regulation, and Natural Disasters Boston, MA November 2 nd, 2018

2 Trump Administration How are the policies of the Trump administration impacting the U.S. economic outlook? Is Trump lifting us up where we belong?

3 Trump Administration

4 Trump Administration

5 Impact of the Trump Fiscal Policy: Administration Spending plus tax cuts $1 trillion infrastructure plan(?) Boost in defense spending

6 Trump Administration Tax reform Personal Lower tax rates Nearly doubles standard deduction Caps mortgage and SALT deductions Corporate Tax rate 35% to 21% 15.5% Immediate expensing for small business Pass through income

7 U.S. Forecast Real After Tax Profits (Billions of Dollars) Real After Tax Profits

8 U.S. Forecast Private Fixed Nonresidential Investment (Billions of Dollars) Private Fixed Nonresidential Investment 21

9 U.S. Forecast Federal Budget Surplus (Billions of Dollars) Federal Budget Surplus

10 Trump Administration Much needed regulatory relief 22 deregulatory actions for every 1 regulatory action Agencies have: Withdrawn 653 regulations 244 regulations made inactive 700 regulations delayed

11 The Rules of the Game Matter Federal Regulation and Aggregate Economic Growth by John W. Dawson and John J. Seater Journal of Economic Growth (2013) 18: Examined Economic Growth and Productivity

12

13 The Rules of the Game Results: Matter Regulations have reduced real GDP growth an average of 2% per year. Real GDP in 2005 would have been $53.9 trillion instead of the $15.1 trillion

14 The Rules of the Game Results: Matter Productivity is impacted by regulatory growth The conundrum of declining productivity in the 1970 s attributable to a doubling in the number of pages of regulation.

15 Trump Administration Trade policy a potential pitfall Threats of tariffs and other trade barriers in response to unfair trade practices and currency manipulation Trade war happening?

16 Trump Administration New administration has thus far avoided SkyMall Policies Sky Mall Policy: An Expensive Policy that Fails to Achieve its Desired Outcome

17 U.S. Forecast

18 U.S. Forecast Sky Mall Policies: T.A.R.P. Foreclosure Prevention Act 2009 ARRA of 2009 Affordable Care Act Dodd-Frank

19

20

21 U.S. Forecast

22 U.S. Forecast

23 U.S. Forecast

24 U.S. Forecast Total Nonfarm Payroll Employment (Millions) Total Nonfarm Employment

25 U.S. Forecast 10.0 Civilian Unemployment Rate (%) Unemployment Rate

26 U.S. Forecast 6.0 Real Disposable Income and Consumption (% Change Year Ago) Real Disposable Income Consumption 20 21

27 U.S. Forecast 14.0 Automobile and Light Truck Sales (Millions Vehicles) Auto Sales Light Truck Sales

28 U.S. Forecast 10.0 Real GDP Growth and Federal Funds Rate (%) Quarterly Growth Rate Real GDP Fed Funds Rate

29 U.S. Forecast GDP % Change, Annual Rate Consumer Price Index % Change, Annual Rate Consumer Sentiment Consumption % Change, Annual Rate

30 Hurricane Impacts You cannot grow the economy by destroying it Stocks vs. Flows in the economy Employment impacts

31 Hurricane Impact Employment

32 Quarterly Forecast Publications Available Florida & Metro Forecast U.S. Forecast Download at:

33 Thank you Sean M. Snaith, Ph.D. Director Institute for Economic Competitiveness (407)