The shutdown has exposed the disaster that is Trumponomics

Robert Reich

When the president is proud to close government and proud to slash taxes for the rich, American workers get shafted

One of the least talked-about consequences of the partial shutdown of the US government – courtesy of Donald “I’m proud to shut down the government” Trump – is its negative effect on the US economy.

Federal spending accounts for just over 20% of the total economy. When that spigot is turned halfway off, as it is now, demand for goods and services necessarily drops. The result is less investment and slower growth.

Right now some 800,000 government employees aren’t collecting paychecks. Nor are hundreds of thousands of government contractors being paid. None of them can buy as much as before.

It’s just another aspect of Trumponomics, which stands for the highly dubious proposition that prosperity comes from cutting taxes on corporations and the wealthy, while squeezing American workers – the people who do most of the buying.

https://www.theguardian.com/commentisfree/2019/jan/20/government-shutdown-trump-tax-cuts-trumponomics


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So where will demand for goods and services come from? Don’t count on exports. The global economy is slowing. And the Chinese aren’t buying lots of things produced in America these days. That’s the fallout from Trump’s trade war.

Trumponomics is an abject failure because its premises are flawed. Cutting taxes on big corporations and the wealthy doesn’t stimulate investment. It only creates a bigger national debt that has to be paid off somehow, sometime.

And who’s going to have to pay it off, either in higher taxes or fewer government services? You guessed it. Average Americans, who are already being shafted by Trump’s policies.

Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good.


November 3, 2020 cannot get here fast enough.......................