Are you up for gambling? Your new president is about to go “all in” on the economy. He is about to make one of the biggest bets in history.
Trump team members have revealed they have been busy for months planning huge economic reforms. The very reforms their boss promised in the campaign. (This will shock old-line politicians. They try not to mix promises with actions after the election.)
Trump people have been conferring with Republicans in Congress. Republicans who had already put together big reforms.
Yes, there is many a slip ‘tween cup and lip. Yes, Congress won’t give him all he wants. But Congress will also cave in on some matters. Because they respect that Trump has a fresh mandate from voters. They won’t want to be seen obstructing him. After all, at the moment he is more popular with voters than they are. Hell, so are ptomaine milkshakes.
Trump’s bet is on behavior. The behavior of the millions of us who make up and move our economy.
He bets people will react in positive ways when they see their taxes lowered. And when they see the tax code simplified.
He bets business will do the same. He bets big business will bring hundreds of billions back here. Maybe trillions. These are profits they made offshore. And kept offshore because of our high taxes. Soon those taxes will be lower.
If Trump is right on this bet, the taxes on the profits from offshore will pour into government coffers. And companies will use some of the after-tax money to expand.
He bets that much of America will heave a sigh of relief when Obamacare is reformed. When the dozens of its taxes vanish. When the thousands of its regulations go away. He bets we can create a more sensible, more practical healthcare program.
He bets that small and mid-sized businesses will love to see fewer onerous regulations. And a simpler tax system. And lower taxes.
He bets that when you reduce taxes and regulations you encourage people in millions of ways to expand their economy.
This is an immense bet. The numbers are staggeringly huge. Yet, this is not a wild and crazy bet. A lot of history should reassure him. The Kennedy-Johnson tax cuts. The Reagan tax cuts. The Mellon tax cuts of the 1920’s. They all pumped adrenaline into the economy. Around the world tax cuts have done the same for moribund economies.
President Obama made huge bets. He bet on higher taxes. That they would not slow the economy. He bet on mountains of new regulations. That they would help more than hurt the economy. He bet on more government. That more government spending would inspire folks to stimulate their economy. He bet on more debt. That the economy would expand enough to easily handle all the debt he piled up to cover the new spending.
Obama bet that folks would warm to a behemoth known as Obamacare. He bet that small businesses would shrug off the garbage government dumped on them. He bet that entrepreneurs would perform as usual. That they would not be discouraged by the anti-business attitudes from Washington.
President Obama lost his bets. The economy never rebounded. Those who sing praises to the last eight years of recovery make a pretty thin chorus.
The President lost his bet on healthcare. And now his program will be dismantled and replaced.
Of course, President Obama’s bets will look good if President Trump’s bets go sour.
Those bets are imminent. It looks as though the reforms could come quickly in the new year. Twelve months from now you will have a good idea as to whether he bet wisely.
From Tom…as in Morgan.