US economy: Clinton for consistency, Trump unknown

In contrast, Clinton would mostly stick to President Barack Obama’s economic path

On taxes, public spending and protectionism the two candidates for the White House are diametrically opposed: Hillary Clinton represents continuity while Donald Trump seduces or frightens with his radical proposals.

But while many economists are alarmed by the threat Trump poses to American prosperity, there is no shortage of small business owners and investors who believe the Republican candidate’s plans would benefit the economy.

A survey conducted by the CNBC network last week with 50 economists and Wall Street participants showed 82% think Clinton will win, but 46 percent feel Trump would be better for the economy, compared to 39% favouring Clinton.

Another survey conducted in October by the Pepperdine/Graziadio Business School in Los Angeles with 1,353 small businesses across the country, shows a majority of employers prefer Trump due to his positions on health insurance (55% to 45% for Clinton), as well as on taxes (66% to 34%) and trade (55% to 45%).

Deficit and deregulation

Trump’s economic plan aims to revive economic activity through deregulation. He promises to achieve 3.5-4% growth – compared to 1.8% projected for 2016 – by cutting the corporate tax rate to 15% from 35%, and lowering the income tax rate for wealthy taxpayers – the highest bracket would drop to 33% from 39.6%. The impact would be a sharp increase in the budget deficit.

Trump also has promised to renegotiate US trade agreements, repeal the “Obamacare” health insurance program, and erect a wall on the US-Mexico border to prevent illegal immigration.

In contrast, Clinton would mostly stick to President Barack Obama’s economic path.

The Democratic candidate’s plan includes raising taxes of the richest taxpayers, increasing the federal minimum wage, providing free local universities for the less affluent, and reforming Obamacare. Her plan also would widen the deficit but to a lesser extent.

Trump is worrying the academic world: no less than 370 economists, including several Nobel Prize winners, signed an open letter in the Wall Street Journal appealing to voters to “choose another candidate”, saying Trump spreads disinformation and “promotes magical thinking.”

“Donald Trump is a dangerous, destructive choice for the country. He misinforms the electorate, degrades trust in public institutions with conspiracy theories, and promotes wilful delusion over engagement with reality,” the letter said.

Even the International Monetary Fund is alarmed by the spectre of growing protectionism, from Trump to Britain’s vote to pull out of the European Union, which it says is a threat to global growth.