Voters are left with a hard choice between Hillary’s assortment of micro-proposals and Trump’s promises to downsize the government.
The US presidential candidates Hillary Clinton and Donald Trump sparred for a final time on television this week, before the elections on November 11th and once again got to make their statements on the country’s economy among other things. In terms of diagnosis of the economy, both differ as Trump sees the decline in American manufacturing as the key issue and jobs going overseas or to immigrants as the main issue affecting the US economy. Clinton, as a member of the Obama government’s administration, wants to get the economy going too but maintains that, “We’re standing, but we’re not running.”
As diagnoses differ, prescriptions differ too and widely so. Clinton champions the continuation of the existing system and incrementally making it more democratic and accountable. She promises to increase tuition aid for higher education, expand government-supported healthcare and increase spending on infrastructure to create more jobs and making the wealthy pay their “fair share” through tax hikes on the super-rich. Clinton also sees tighter regulation on financial institutions and corporations as necessary to contain disruptive risk-taking and improve working conditions for employees. Her specific proposals have caused much discomfort in business circles, terming the measures as “excessive” and giving further boost to bureaucratic controls on businesses. However, her vision for a debt-free college education programme and reducing out-of-pocket healthcare expenditures will find support as a long-term beneficial measure.
Trump on the other hand promises a significant overhaul of taxation by simplifying the tax code and providing substantial tax relief across the board while on the spending front, he stresses on drastically increasing defence and infrastructure spending. However, he is otherwise in favour of downsizing the government welfare programmes by repealing the Affordable Care Act and altering the current financing system of Medicaid. Unlike Clinton’s proposals for energy regulations that will depress the coal mining sector, Trump is in favour supporting the blue collar jobs that drive the drilling and fracking sector, something that has made the United States the largest producer of oil. All this has made Wall Street and many others think Trump’s proposals are better for boosting growth and job creation even though economists have pointed at the ineffectiveness of such ‘trickle-down’ economics in the past. But where Trump curries much disfavor is over his scare-mongering rhetoric on immigration and trade. He promises to build tariff walls to block Chinese and Mexican manufactured goods and also renegotiate existing trade agreements which he believes have taken jobs out of the country. Apart from the obvious retaliatory measures that this would court from trading nations and sharp increases in domestic prices, he effectively misdiagnoses the problem as one of trading nations trying to outsmart the US even though it is likely corporate interests and lobbying that have shaped these deals. Anti-immigration policy also goes against the libertarian stance and something that Wall Street definitely doesn’t want.
Even as most predict (or fervently hope for) Hillary’s election victory, it would be sad if the liberal political class ignores the issues of over-regulation and complex tax regulation, something that has been shown to be a hidden burden on low-income Americans and simply continues Obama-era controls by bluster over income inequality.