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PostTrump's Economics; from Ric Mauricio (John Eipper, USA, 11/19/16 4:09 am)
Ric Mauricio writes:
Trump not cashing his presidential salary would not be "smart" tax-wise. You see, the IRS sees the earnings as constructively earned, and therefore he owes taxes on it.
As to the rhetoric that Trump will levy tariffs on China of 45% and on Mexico of 35% would be in violation of law. The law currently limits a maximum tariff of 15%.
As to the infrastructure spending that Trump proposes, unfortunately, the US is a not a big producer of steel that can be utilized for infrastructure projects. The US steel production is geared more towards specialized steel. So where will we get the steel? China?
Same goes for cement. Where do we get enough cement? Mexico?
Trump says we all know where the dollar is going, which implies that the dollar is depreciating. However, I contend that a depreciating dollar and copious issuing of government debt is genius, but nefarious. You see, if you give me a dollar and I give you a piece of paper in return indicating that I will pay back some interest (in this low interest environment, that is virtually nothing) plus the dollar in the future, but I print more dollars thus depreciating the dollar's value, then I will be paying you in dollars that are worth less than the dollar you initially gave me. This is brilliant.
Unfortunately, the biggest holder of this government debt are the American people, mostly through government programs such as Social Security and Medicare. And the Chinese are slowly figuring this out themselves, issuing their own government obligations and depreciating the Chinese yuan at an even faster rate than the US is depreciating its dollar. And they are cashing in American treasuries and buying American real estate. Oh, they have figured this out, haven't they?
With Trump's advisor choices of Bannon, Flynn, and Sessions, I am now questioning my perhaps naive and optimistic comparison to Winston Churchill.
Perhaps we will bow down to the Emperor Trump or kiss the ring of His Holiness Donald I.
JE comments: An editorial curiosity: will the term "Trumponomics" catch on? Probably, although it's still unclear what Trumponomics really are--a murky branch of the Dismal Science. A Googling reveals 315,000 hits and growing, including references in the mainstream media (among others, CNN, The New Yorker, and the WSJ).