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More tax cuts, "crazy Democrats," negative rates: Trump announces 2020 economic push



"Here's the story. I don't like you, you don't like me, you have no choice but to vote for me," he said.

Calling Democrats "mad," he removed economic success. Wage increases, declining poverty, recorded low unemployment rates for African-Americans and Hispanics. Most of them are true, some over-inflated. For example it would be impossible to verify his claims that the stock market rally would be 25% higher if the Federal Reserve did not raise interest rates. He said his deregulation and tax cuts brought a "failed recovery" to an "unprecedented influx of prosperity."
prosperity? Yeah. Unprecedented? No. There are quarters in the Obama administration with stronger economic growth. And Trump's job creation so far in his administration has been partially running at the same time as the end of the Obama years. Fact-check aside, here are three takeaways for 2020 from the president's speech. leading criticism of his historic tax reform in 201
7. Class tax cuts, but permanent corporate tax cuts, will end. Trump asked his aides to come up with a simple middle-class strategy to free up a lot of money on paychecks.

The obvious question is how to pay for it. The government has already spent more than necessary, the deficit being ahead of $ 1 trillion. Any new tax cuts must be offset by spending cuts elsewhere, or the government will have to borrow money.

The president offered creative solutions. Get China to pay for it. The tariffs he (falsely) claimed were paid by China could be transferred to tax relief.

There is "a tremendous amount of billions left that we can use, in fact, we can use it for tax deductions," Trump said. "We can distribute it to people."

Never mind that budgets don't really work. But the idea is what matters here. Perhaps in the sense of noting that his 2017 tax cuts have not helped the companies and the wealthy, he has made a simple play for tax relief in the middle. His team has echoed the idea before. White House chief economist Larry Kudlow told CNBC Tuesday floated the idea of ​​a tax cut before election day. The Washington Post reports Trump's advisers are spending the possibility of a 15% tax rate on the middle class. deal, "he said." We are close to a significant phase of trade relations with China. It might happen soon, but we'll just accept it if it's good for the United States. "This is exactly where negotiations have been going for weeks now. The only thing that seems to change is the recession clock. A new round of tariffs on $ 156 billion in Chinese manufactured goods subsided on December 15. The Chinese want to cancel the current tariffs Trump appears to stay on course.

Takeaway No 3: He wants the negative rates

The president re-cast the Federal Reserve and its chairman Jerome Powell as the enemy of his recovery, envious of the rest of the world economy where the central banks have pushed interest rates into emergency territory. "We are actively competing in countries that have openly cut interest rates so now many are actually paid when deducted. they will repay their debt; known as negative interest, "the president said." Who ever heard of such a thing? Give me some there. Give me some of that money, I want some of that. The Federal Reserve will not let us do this. "

This is a classic and common Trumpian contradiction. If the US economy is the largest in American history, as the president claims, then why are the negatives necessary? Negative rates are not emerging growth in Japan and Europe.

The president calls himself the "King of Debt" and certainly the negative rates are favorable for borrowers. the sailing Americans, who had to pay the bank to hold their money.

He called his election to Powell as Fed chairman "a mistake." Powell might discuss something when he testified before the Joint Economic Committee at 11 a.m. ET You can expect more pressure on the Fed in the election year.


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