Drumpf's Disastrous Reaganomics

I have just discovered a December, 2016 piece in Vanity Fair written by Joseph Stiglitz, a Nobel Laureate economist, former chief economist at The World Bank. It seems worth devoting an entire post to.

It is a warning that Drumpf's economic plans strikingly resemble failed Reagan economic policies. Drumpf is calling for massive tax cuts which mostly benefit the rich. This will reduce government revenue. But he is also calling for deportarion of 11 million undocumented immigrants. On top of being indescribably inhumane, this would also be very expensive. He is calling for medicare privatization, also expensive. He is calling for increased military spending. So he is looking to spend money while decreasing government income. This means massive deficits and debt.

So he is proposing policies which will hurt people directly by forcibly removing them from their homes, or cutting their healthcare insurance, or engaging in military actions, and will hurt all of us indirectly through actual wreckless spending.

Stiglitz takes particular aim at Drumpf's infrastructure plan:

His infrastructure program is supposed to be financed out of an 82 percent tax credit to hedge funds and others who undertake this investment. But unless one is willing to be patient—to wait three to six years—one has to rely on the long discredited “shovel ready” projects, which may create jobs willy-nilly, but won’t constitute the strategic infrastructure revolution the country needs.
Hedge funds are not noted for their long-term thinking—for them, a quarter is an eternity. Their goal will be to turn a quick buck on the government’s magnanimous offer before Washington wakes up. Here’s what they’ll likely do: they’ll try to privatize whatever public assets can be sold. Of course, from a societal point of view, this is not investment—it’s just changing ownership and control of assets. With the federal government paying 85 cents of every dollar spent in privatization, we can expect a gold rush. Ordinary citizens will pay twice for this gift to the hedge funds: first through the cost of the tax credits, and second through the tolls and fees that private owners will charge to recuperate their “investment.”