Trump’s recovery plans to boost the economy are optimistic, and as pandemic restrictions loosen, his administration is gearing up to “Make America Great Again.”
Trump's Plans Boost Economy
Trump’s presidential plans, and greatest political strength, have been centered around a robust economy. But with the economy being so affected by the coronavirus pandemic, his best electoral hope is that it comes back quickly.
Trump tweeted positively last week – “I feel more and more confident that our economy is in the early stages of coming back very strong.” He added – “Not everyone agrees with me, but I have little doubt.”
More than 40 million Americans have filed for unemployment aid since many businesses began to temporarily shut down or close months ago due to public health restrictions set by the government.
As more negative employment statistics are released, the number of laid-off workers seeking unemployment benefits declined slightly to 1.48 million last week. The economy contracted 5% in the first quarter of 2020 but is expected to shrink at around 30% (annual rate) in the second quarter. That would be the worst quarterly contraction since records began in 1948.
Trump continues to encourage governors to reopen their states’ economies to keep small businesses going and getting people back to work. Larry Kudlow, a White House economic adviser, has also mentioned that payroll tax could be cut to get more money into workers’ pockets.
Tax deduction for restaurants and other sectors, such as the tourism industry, is being considered by the White House and provides liability protection to businesses.
Trump’s administration has also awarded hundreds of millions of dollars to boost the medical research industry, including medicines used to treat COVID-19 in the United States. Virginia start-up Phlow Corp. received $354 million in a bit to return pharmaceutical manufacturing from overseas.
Second Stimulus Package
Since the start of June, 159 million American households have received stimulus payments of up to $1,200 per person on earnings less than $75,000. The CARES (Coronavirus Aid, Relief, and Economic Security) Act was part of a $2 trillion financial stimulus package set to support individuals and businesses affected by COVID-19.
Trump has told aides he is in support of sending US citizens the second round of stimulus checks hoping that the money will boost the economy and help his chances of reelection. Though some senior White House officials are skeptical, only wanting to send payments to those in need, and not the nearly 106 million people previously.
Stock markets rose around the world after Kudlow said that the stimulus checks could include “tax rebates and direct mail checks,” although he cautioned that nothing had been settled. Investors were encouraged by expectations.
“I think the tax rebates or the direct mail checks are on the table. … There are a lot of discussions going on … Probably, we would want to target those folks who lost their jobs and are most in need. All right, that’s the speculation on my part, but I think that’s where it’s going,” Kudlow said.
Many Americans have chosen to save their stimulus checks instead of plowing the money back into the economy, leading some congressional Republicans to oppose the second wave of checks. Not only because of this but also because of the tremendous levels of the deficit.
Sen. Mitt Romney spoke about his opposing views on another round of stimulus payments. Instead, it would favor extending unemployment benefits at a lower level than approved by Congress in March and modifying the Paycheck Protection Program for small businesses.
Work Visa Suspension
Trump has also just suspended new work visas, at least until the end of the year, citing that the visa programs “pose an unusual threat to the employment of American workers” – his bid to boost economy figures.
The decision has been met with anger from many industries who feel that highly skilled professionals could add to America’s economic recovery.
United States and China Trade Deal
The President’s trade advisor, Peter Navarro, said last week in an interview with Fox News about the trade war pact reached between the US and China in January, that “it’s over.”
Due to the pandemic, China’s promises to increase purchases of American goods were put into doubt. Financial markets became turbulent for a while until Mr. Trump took to Twitter to clarify the statement, and confirming that the pact was still in force, saying “The China Trade Deal is fully intact.”
Just months away from November’s elections, Trump’s approach to boosting the economy amounts to a high-risk tactic that has Republicans nervous and economists worried that the administration could be taken by surprise if the economy does not bounce back quickly enough.
Do you believe Trump’s plans will boost the economy? What are your thoughts around a second stimulus check? Let us know in the comments section below.