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Biden’s Status Quo vs Trump’s Immigration Plan
Coming to grips with what’s not working: President Joe Biden’s blaming corporate greed for inflation woes. Alysa Finley in the WSJ notes how the president’s “chihuahuas in the press” are running with the lines demonizing Donald Trump:
“Trump’s inflation bomb: How his second-term plans could make it worse,” reads an Axios headline. The Atlantic warns of Mr. Trump’s plan to “supercharge inflation,” while the New York Times states: “Trump Vows to Lower Prices. Some of His Policies May Raise Them.”
Voters know they’ll get more of the same in a second Biden term. A second Trump term carries more uncertainty because of his unpredictable nature. But when you’re losing financially, you might be inclined to make a bigger gamble.
Recession Exacerbated by Policy Mistakes
Ms. Finley recognizes the risk in Trump’s policies …
… though they pale in comparison with a second Biden term. The biggest danger if either wins is a recession exacerbated by policy mistakes.
Mr. Trump is promising to deport undocumented immigrants en masse. That has the potential of reducing the supply of workers, especially in such industries as construction and agriculture.
A worker shortage would push up wages and prices. It could also reduce the availability of some goods and services, which would have the same effect.
In our road trip between Key West, Florida, and Newport, RI, by far the #1 complaint Dick and I hear is the lack of workers, qualified or not. Covid decimated many industries that still struggle to regain their pre-Covid footing.
Resistance by progressive “sanctuary” cities and states, as well as limited government resources, could hinder Mr. Trump’s deportation plans, advises Ms. Finley.
He’s more likely to succeed at reducing the flow of migrants across the southern border, though it’s doubtful doing so would hurt the economy.
The current flood of migrants—around six times as high as during the Obama and Trump administrations—is unsustainable. Increased foreign immigration helped ease a worker shortage during the early years of Mr. Biden’s presidency, but most recent migrants aren’t working. They’re stretching the government safety net to a breaking point.
Biden’s Blue State Bailout
Demand for unskilled workers is cooling, especially in Democrat-run cities and states where unemployment is higher. New York, Chicago and others are begging Washington for aid to care for migrants as they face growing budget shortfalls. Don’t discount the chances of a blue-state bailout during a second Biden term.
Donald Trump’s proposal for 10% tariffs on goods across the board would doubtless precipitate or magnify a recession, as the Hoover-era Smoot-Hawley tariffs did.
They would raise prices, lead to reprisals by other countries, and harm U.S. businesses.
Joe Biden’s main thrust is on taxes. Trumps is extending his 2017 tax cuts.
(Trump) also floated slashing taxes even more, though details remain fuzzy. While most of the 2017 corporate-tax reforms are permanent, most individual tax cuts expire in 2025.
According to the NYT:
Biden’s administration contends that extending tax cuts would expand the deficit and “amount to fiscal stimulus with more spending money in the pockets of especially wealthier consumers than would otherwise be the case.”
Nice of the liberal media to acknowledge that loose fiscal policy can fuel inflation, mocks Ms. Finley.
(That’s) a point the media ignored when Democrats shovel out trillions of dollars in transfer payments and climate largess. But the media economic analyses get about everything else wrong.
Not all fiscal “stimulus” is equal. Government handouts, of the kind Mr. Biden favors, boost consumption but do little to stimulate the supply side of the economy. That was the problem early in the pandemic: People had more money to spend but fewer goods and services were available. Broad-based tax cuts increase the incentive to save, work and invest.
President Joe Biden is campaigning on extending most individual tax cuts to the benefit of lower and middle-income Americans. How will the Biden White House pay for that?
(With) trillions in handouts—with more than $6 trillion in tax hikes on corporations, capital gains, small businesses and those (Biden) deems rich.
(Biden’s) tax hikes would dampen the incentive to save and invest and thus depress an economy already slowing amid weak business investment. The result: higher unemployment and lower tax revenue.
(Biden) would insist on more government handouts, which would further swell the deficit. GOP control of one chamber in Congress might hamper Mr. Biden’s tax ambitions, though his relentless regulatory fusillade would have a similar depressive effect.
