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Buyers Beware…..
Trump will inherit an economy already on relatively solid footing. Inflation has slowed and wages have begun to catch up with higher prices. While companies aren’t hiring at the same breakneck pace as they were coming out of the pandemic, the job market remains strong by historic standards, with low unemployment and around one job opening for every person looking for work.
But despite the signs of strength in the economy, the cost of living and overall dissatisfaction with the economy was repeatedly cited as a top concern by voters heading into the election. Housing costs have been a major pressure point on household budgets after rents increased an average of 24% over the past four years, and, with mortgage rates over 6%, buying a home has been out of reach for many households. Food has been another rising expense, with the average cost of groceries up 22% over the past four years and food banks seeing record numbers of people seeking help.
Trump has floated a wide range of proposals that he says would improve America’s financial picture, many of which will require action from Congress, where Republicans will control the Senate and hope to control the House. Among Trump’s economic plans are deporting millions of immigrants, putting sweeping tariffs on all goods coming into the U.S., encouraging more oil production, lowering corporate taxes and eliminating taxes on social security income and tips….
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Across the economy, an analysis by researchers at the University of New Hampshire found that a mass deportation of immigrants could reduce the U.S. economy, as measured by gross domestic product, by as much as 6.2%, or about $1.7 trillion in lost productivity….
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Trump has proposed a number of tax cuts, including a complete elimination of the federal income tax. But those plans have varying likelihoods of getting enacted, given that Congress would have to pass legislation to change the tax system. While some of the plans are thin on details and there are many variables for how his proposals would be enacted, economists at the University of Pennsylvania estimate Trump’s tax and spending plans would increase the deficit by $4.1 trillion when accounting for the effects they would have on the wider economy….
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After winning the 2024 election in part due to high inflation early in President Joe Biden’s term, President-elect Donald Trump wants to enact policies that would lead to the very same kind of inflation that doomed Democrats.
Though Trump inherits a strong economy and low inflation, he’s proposed a 10 to 20 percent tariff on all imports, and a 60 percent tariff on all imports from China. The Budget Lab at Yale estimates that this policy alone could raise consumer prices by as much as 5.1 percent and could diminish US economic growth by up to 1.4 percent. An analysis by the think tank Peterson Institute for International Economics, finds that Trump’s tariffs, when combined with some of his other proposals such as mass deportation, would lead to inflation rising between 6 and 9.3 percent.
If Trump pushes through his proposed tariffs, they will undoubtedly be challenged in court — and, most likely, in the Supreme Court. There are no shortages of businesses that might be hurt financially by these tariffs, and any one of them could file a lawsuit.
That raises a difficult question: Will this Supreme Court permit Trump to enact policies that could sabotage his presidency, and with it, the Republican Party’s hopes of a political realignment that could doom Democrats to the wilderness?…
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