Presidential Promises: Kept or Broken?
Donald Trump was inaugurated as the first billionaire president in history. He ran on an economic agenda the first time round, and he’s doing that again leading up to this second election. It’s time to see if he has, so far, met investors’ big two expectations on this front!
First, the headline grabber: doubling gross domestic product (GDP) growth. This is about how the USA’s market value grows, and President Trump has required 4% per annum to meet his goal. GDP growth has taken a clear dive amid corona, but it topped out at 3% in 2018.
Second, the most ambitious: to eliminate $19.7 trillion in national debt in eight years. In fairness, it hasn’t been eight years, but in four, the deficit has increased to $27 trillion. It’s the opposite of what he promised, but debt lets you do things like pave roads and build airports. That’s great, though during corona, it’s been needed just to keep things together.
It’s the Federal Reserve which affects the stock market more than the government itself because the Fed has a mandate to maintain economic health. If the government could lower interest rates, it would do so just to juice the stock market before election time; no, no, no.
The White House has other powers. It needs to help citizens be productive, starting businesses or grinding hard in their engine rooms, and it can do this with strong non-economic agendas; patriotism, healthcare, reliable policing, freedom of this and that etc.
If you had to score President Trump’s performance on this front heading into the election, how would you?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.