Has Trump promised too much on US economy?

BBC:

Donald Trump has promised big changes for the world’s largest economy.

An “end to the devastating inflation crisis”, tariffs and big cuts to taxes, regulation and the size of government are all on the agenda.

This combination, he says, will ignite an economic boom and revive withering faith in the American dream.

“We’re at the beginning of a great, beautiful golden age of business,” he pledged from the podium at Mar-a-Lago earlier this month.

But looming over the president-elect are warnings that many of his policies are more likely to hurt the economy than help it.

And as he prepares to set his plans in motion, analysts say he is about to run into political and economic realities that will make it hard to deliver all his promises.

“There’s no clear path forward at this time for how to meet all these goals because they’re inherently contradictory,” said Romina Boccia, director of budget and entitlement policy at the Cato Institute.

Here’s a closer look at his key promises.

Tackling inflation

What Trump promised:

“Prices will come down”, he said repeatedly.

It was a risky pledge – prices rarely fall, unless there is an economic crisis.

Inflation, which measures not price levels but the rate of price increases, has already come down significantly, while proving tough to stamp out completely.

What complicates it:

Trump pinned his claim to promises to expand already-record US oil and gas production, reducing energy costs. But the forces that affect inflation, and energy prices, are mostly outside presidential control.

To the extent that White House policies make a difference, analysts have warned that many of Trump’s ideas – including tax cuts, tariffs and migrant deportations – risk making the problem worse.

Economist John Cochrane of the right-leaning Hoover Institution said the big question facing the economy is how Trump will juggle “tension” between the more traditional pro-business parts of his coalition and the “nationalists” who are focused on issues such as border control and rivalry with China.

“Clearly both camps can’t get what they want,” he said. “That’s going to be the fundamental story and that’s why we don’t know what’s going to happen.”