Maganomics
by Caitlin
Throughout the last four years, the mainstream media has seized every opportunity to represent President Trump in a poor light. It capitalizes on his blunt rhetoric and non-traditional demeanor while carefully obscuring all the ways he has served the American people. Donald Trump has resonated with the average American in a way not seen since Ronald Reagan. He has his finger on the pulse of the American heart and speaks to its deepest concerns, namely, the economy. Where other Presidents missed the mark, Trump prioritized building a booming, robust economy for the American people. For many, Trump restored the hope of financial success; to support a family, start a business, invest, and pursue the American dream. Even with the pandemic downturn, a swift economic recovery is on the horizon with a second term of President Trump. On the other hand, a Biden-Harris administration is a bleak picture to imagine. With intensified shutdowns, taxation, and regulations, a Biden presidency will prolong our suffering and keep our economy underwater for years to come.
Gross domestic product, one of the best indicators of economic standing, is determined by aggregating the goods and services consumed in an economy. On a very basic level, GDP is composed of consumption, investment, net exports, and government spending. During his 2016 campaign, Trump promised a 4-6% GDP growth. Pre-COVID, he was able to deliver around 3%, which was an incredible feat. The President achieved this by launching a conservative tax cut plan that gave companies and people more cash on hand to spend and invest. Trump’s economic policy revolves around putting money back into the pockets of Americans, with the expectation that they’ll go and spend it.
On the other hand, the Democrats prefer to increase GDP through government spending and programs. Rather than give corporations and individuals money back to use as they [the individual] sees most efficient, Democrats believe the government is the most efficient arbiter of capital. Even with higher taxes, Democrats believe that reducing living costs via programs such as the AHCA, will offset the negative side-effects of less money spent on consumption. The only issue with this idea is that the U.S. economy is almost entirely consumption-based. 70% of our GDP comes directly from consumption. So while the U.S. government may be spending more (a part of GDP), and some people may be spending less on health insurance, there is still an outsized negative effect on consumption, which overall negatively affects GDP. This is reflected when we compare the economic growth under President Trump to that of the Obama/Biden administration. Under Obama, the real GDP growth rate was only 2% over a two-term presidency (coming out of an economic recession nonetheless). Trump achieved more than 3% in a late-cycle economy. As we look forward, a future under Obama’s right-hand man doesn’t look much better. According to the Tax Foundation, Biden’s plan would significantly reduce the U.S. GDP growth in the long term.
In this discussion of the Trump economy, a note on the coronavirus pandemic is due. From the start, the President has stated the importance of re-opening the country swiftly and safely. As governments forced people to stay inside, supply chains were severely disrupted, and consumer demand plummeted, our economy plunged into a recession. But while continued shutdowns in Democrat states continue to partially prolong America’s economic crisis, the President has endured the brunt of the blame. The Democrats have capitalized, manipulating the situation to brand Trump’s economy as a failure. Fortunately, third-quarter GDP growth projections show a 30% (record-breaking) recovery, and job data is steadily improving. Make no mistake: the coronavirus tragically stole hundreds of thousands of innocent American lives. But by shutting down with no reasonable expiration date, this country has not only endured serious economic suffering, but an entirely separate death toll that went largely unreported by the mainstream media. Suicides, drug use, alcoholism, and depression all sky-rocketed during the mandated quarantine period.
Regardless of your opinion on Trump, he does understand what Democrats can’t seem to: that the solution to the problem isn’t to lock everyone in their basement and indefinitely print stimulus checks. While Joe Biden can afford to sit in his basement for a year, the average Joe can’t. With proper safety precautions, Trump wants to let individuals decide what is best for themselves and their families, allowing businesses to operate and the free market to function as it should: freely. Suppressing the economy and putting the American people under a mountain of debt was a short-term strategy to flatten the curve, but it is not an economically viable long-term strategy
Before the pandemic hit, Trump had mobilized American workers to record numbers. Unemployment had hit a low of 3.5%, the best rate in 50 years. This shockingly low rate is not an irregularity as the country witnessed nineteen consecutive months of unemployment rates at 4% or below. Driving this reduction in unemployment, the President has added 7 million jobs to the economy— many of which were outsourced manufacturing jobs returned to U.S. shores. The 2020 Census reported that workers’ earnings increased at a rate comparable to the Reagan years. Much of this success can be attributed to deregulation. A study at George Mason University indicated a relationship between higher federal regulation and increasing poverty rates. By cutting the red tape that bogs down businesses, Trump empowered the average American to hire and be hired. The combination of greater job opportunities and higher wages incentivized alienated workers to rejoin the labor force, further expanding our nation’s labor force, productivity, and appetite for consumption. To the detriment of its credibility, the media refused to give airtime to the renewed prosperity in minority and disadvantaged communities under Trump. Social mobility is growing, as there’s been a decrease in families in the lower-income brackets by 1% and a 1% increase in families in the middle-income bracket. Unemployment rates for African-American and Hispanic women fell to all-time lows just under 4.5%. Single mother homes saw their average incomes jump 7.6%, well ahead of gains made by other higher-income groups. The poverty rate among single-mother homes fell 2.7% for African Americans and 4% for Hispanics, exhibiting that conservative policy delivers economic independence and freedom for women of color.
Aside from unemployment numbers and regulatory reform, taxes weigh heavily on the American voter. With the President’s Tax Cuts and Jobs Act, he brought unprecedented change to the tax code that increased Real Household Wealth by nearly $12 trillion. Americans across the board saw lower tax rates and a doubling of both child tax credits and the standard deduction. The benefits of lower taxes multiplied across the economy, increasing consumption, investment, and GDP growth. Businesses also received a massive reduction in corporate taxes from 35 to 21%. A testament to Trump’s fiscal conservatism, five hundred major corporations cited that the new system has allowed 5.5 million Americans to receive bonuses, raises, and other benefits. The Left often objects to tax breaks on large companies on the premise that it subsidizes greed and deepens the top earners’ pockets at the expense of the average American worker. But the Left’s chosen candidate, Joe Biden, is no champion of the “little guy.” Biden has proposed a corporate tax rate of 28%, which will stifle productivity, exacerbate unemployment, and distort labor incentives. A new study from The Hoover Institution suggests that Biden’s corporate tax hikes will create 4.9 million fewer jobs and shrink the economy by $2.6 trillion. The researchers also predict a $6,500 drop-in median household income. As the Left claims high corporate taxes will solve their problems, the Tax Foundation claims that laborers will likely take on 70 percent of the tax burden. This is exactly what makes Democratic tax policy so hypocritical. To “reduce” taxes for the average worker, Democrats instead raise taxes on corporations and businesses. But since corporations see taxes as a marginal cost (i.e., corporations are taxed more if they sell more), the corporation just factors the tax into the price of each good, essentially passing on the tax burden to the consumer. So yes, while the taxes the government levies on citizens may stay the same, the price of goods as a whole goes up, and the citizen is left with a dollar that gets them less than it did yesterday (not accounting for inflation). In the end, it’s the average citizen who forks over the money to the government. If academic research doesn’t convince you, take it from rapper 50 Cent who, after learning about Biden’s tax plan, endorsed Trump via social media with the now-viral slogan, “I don’t wanna be 20 Cent”.
While high taxes always create drag for large corporations by imposing additional costs and curbing innovation, they can be crippling to small businesses. The more hoops entrepreneurs and nascent businesses have to jump through to stay afloat, the less likely they’ll be able to compete with big business. As many struggle to bounce back from the effects of the coronavirus shutdowns, conservative economic policy should make it easier for Americans to generate needed profit and provide businesses with much-needed relief in the form of a return of demand. Famed free-market economist Ludwig Von Mises once wrote, “Taxing profits is tantamount to taxing success.” Not just the success of corporations, but the success of all Americans.
President Trump’s record speaks for itself. Under Trump, the economy thrives. Meanwhile, Biden will suffocate any remaining life left in our economy after the coronavirus calamity. While the President is committed to upholding economic freedom, a Biden presidency will erode it. Democrats throw around extreme epithets of racism, bigotry, and sexism against Donald Trump to distract the voter from what they cannot deny and desperately try to conceal: Trump presided over an era of economic prosperity ushered in by conservative policy. Trumps’ communication style and tweeting habits, while unpalatable to some, pale in importance to the extra earnings and return of domestic industry jobs to factory towns in the Rust Belt. Conservatism has protected American business and brought good fortune to the average citizen. As Reagan asked America in 1984, we must ask ourselves again: are we better off today than you were four years ago? Vote on that.
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