February 04, 2019

It is the time for a midterm review of the Trump policies and their impact on the US economy. To consider whether the Trump Administration deserves credit for much of what has during the last two years. A list of the campaign promises fulfilled and unsullied is a good start to identify the degree to which the Trump Administration has been successful implementing is agenda. The deregulation and reduction in tax rates suggest that, despite the Resistance, the Trump Administration has had a great deal of success implementing the core of its economic agenda. To this end, it is instructive to review the arguments made by then candidate Trump as well as his critics. We contend that Keynesian economics was the genesis of the Obama economic policies and a Supply-Side perspective the essence of the Trump policies. At the risk of over simplifying the two sets of policy initiatives. The Obama stimulus centered on stimulating aggregate demand by expanding the social safety net, easing food stamps requirements and unemployment benefits. Increasing spending on ObamaCare subsidies, “shovel ready” projects, “cash for clunkers” and green energy handouts. In contrast the essence of the Trump program focused on increasing the economy’s keep rate or incentive structure, see Table 1a and 1b. The contrast between the two approaches are quite striking and so are the results. Supply-Siders argue that the Trump fiscal policies have produced more growth than President. Obama’s because they were designed to incentivize businesses to invest, hire and produce more.

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