Category Archives: fiscal stimulus

Trump’s Tax Cut Will Worsen the Current Account Deficit

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January 19, 2018 —  President Trump and the Republicans succeeded last month in passing their big tax cut.  It may not have many of the desirable attributes of true tax reform (equity, efficiency, bi-partisanship, revenue-neutrality, or cyclical timing); but it is major legislation, as promised.  What about that other major Trump promise, to cut the US trade deficit?  The tax cut is virtually certain to raise the budget deficit and in turn to raise – not lower – the current account deficit.  Call it the Return of the Infamous Twin Deficits.  As when Ronald Reagan cut taxes in 1981-83 or when George W. Bush cut taxes in 2001 and 2003. Continue reading

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What Will the Trump Presidency Look Like?

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(Nov. 12, 2016) We unexpectedly find ourselves in uncharted territory, in so many ways. The United States has never before had a president without either political or military experience. And Donald Trump is especially unpredictable: he has so often said things that conflict with other things he has said. So it is hard to know what he will do. Continue reading

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Fiscal Education for the G-7

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(May 26, 2016) As the G-7 Leaders gather in Ise-Shima, Japan, on May 26-27, the still fragile global economy is on their minds.  They would like a road map to address stagnant growth. Their approach should be to talk less about currency wars and more about fiscal policy. Continue reading

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