The U.S. economy: Obama’s administration vs. Trump’s new policies

OPINION – There are many factors that contribute to the steady growth of an economy, and most economists agree that we often overestimate the influence…

OPINION – There are many factors that contribute to the steady growth of an economy, and most economists agree that we often overestimate the influence presidents have over economic growth. However, when analyzing Trump’s claims of producing lower unemployment rates, increase in GDP, and overall economic growth – its safe to say that Trump and his administration are yet to enact key economic policies that will very well impact economic growth in the way that we have seen.

With exception to the stock market; in all of it’s glorious volatility, implemented policies often take a while to take effect, and we might still be experiencing the impacts of Obama’s economic policies. However, I’m certain that Trump has much to do with the status of the stock market, as it reacts to major news announcements such as the anticipated tax reform, ACA amendment etc.

So is the positive turn in the economy as a result of Trump?  I personally don’t think so- mainly because the economy has been improving at the rate that it is before Trump got elected. Also, the total lag time for monetary policy is about 9- 12 months, where producers and consumers take the time to adjust production, expenditures, and spending. For fiscal policy- it could take one to five years, as it accounts for the time Congress takes to approve the related bill, and for consumers to react to said policy.

The fact is – unlike Obama, Trump inherited a pretty healthy economy. The Bureau of Economic Analysis reports that the GDP increased by 3.3% in the third quarter of 2017, and according to the U.S Bureau of Labor Statistics, unemployment is now down to 4.1%. In 2009, the GDP growth rate was down – 2.8%, while unemployment rate was around 9.9% percent. Let’s also keep in mind that the natural rate of unemployment has been estimated to be around 5%.

I think it’s also safe to predict that the Trump- Era will bring about an increase in political participation, especially among the youth, and an increase in conversation surrounding our political climate. While it’s imperative to keep focus on the economy with Trump in office, I’m more so worried about the Post- Trump economy. What will it look like for the middle class and low income? What will it look like for marginalized communities? How long will it take to redo what his administration has undone? And most importantly who will take office after Trump?

This is why it’s important to participate in the 2018-midterm elections, where all 435 seats in the United States House of Representatives and 33 of the 100 seats in the United States Senate will be up for election. State and local elections are just as important because they directly concern your state, district, and city.

By: Bianca Onwukwe

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