the Monetary doping have created the economic tailwind that is sweeping across the united states as Donald Trump moving into the White house.
President Barack Obama leaves power in a favourable economic position. But Obama has the most U.S. central bank to thank for the recovery, according to economists. Arkivbild.
– When Obama took office was the U.S. economy in a boat without both a rudder and keel. He had no room for manoeuvre in their first year, ” says Robert Bergqvist, chief economist at SEB.
the Recovery from the great recession was sluggish and slow, despite a huge stimulus package of 800 billion dollars and hundreds of billions of dollars in aid to krisföretagen on Wall Street and in Detroit.
After the acute crisis bet Obama everything on one card: the contentious health care reform Obamacare, which was signed in march 2010.
Obamacare has given millions of previously uninsured americans access to health care. But then the reform is based on subsidies, taxes and regulations has been teasing real mad at many republicans. The more than six years that have passed since then have primarily been about confrontation, not least about AMERICA’s contentious debt ceiling.
“I don’t think you will remember the Obama that much for what he’s done to economic policy,” says Bergqvist.
instead, he, like most, stimulus measures from the US Federal Reserve (the Fed) as crucial to the USA’s economy is in the good condition it does.
Johnny Bo Jakobsen, chief analyst at Nordea, agrees:
– the U.S. economy is in significantly better condition today than eight years ago. But it depends more on monetary policy than on Obama’s fiscal policies.
Dissatisfaction with the result of Obama’s fiscal policies is widespread. In addition to that mountain of debt, there are many who criticize the growing income gap in the united states, during Obama’s years in power has run riot away to the largest since the 1920s.
What to expect with Trump in the White house is difficult to predict. He will inherit a mountain of debt on approximately 20 000 billion dollars, to 104 percent of GDP. And with leveraged bets and tax cuts, he learns to hit in the debt ceiling already after a few months in power.
– Then is the the tax cuts he plans to implement for households no that goes to medium – and low-income groups. So it will surely not reduce the economic inequality in the united states, ” says Bergqvist.
He add that the risk is great that most of the cuts go to savings instead of consumption.
Vallöftena on major infrastructure projects at the same time takes time to realise. The concern is also a big economic setback if Trump executes its protectionist threats – like the wall against Mexico, and punitive tariffs on products from China.
Neither Bergqvist or Jakobsen believe that Trump, as promised, can double the growth from this year to about 1.6 per cent. Bergqvist believes that it can land at around 2.5 per cent this year and next year. Jakobsen expects just over 2% in the first two years in power, and warns that it rather creates inflation, the growth of the bets Trump is talking about.
And then, the Fed must neutralize the stimulus with tighter monetary policy.
the Facts: table for Trump
You have to go back to the end of the 1980s, and George Bush the elder to find a president-elect in the united states that have better economic conditions for the seizure of power than Donald Trump.
the U.S. unemployment rate amounted in december to 4.7 percent, slightly above the novembers level of 4.6 per cent – the lowest level in nine years.
Inflation is on the way up and the growth lifted to 3.5 per cent annual rate in the third quarter. At the same time revolves the stock markets on Wall Street close to the historical record, while housing demand has increased to the highest level in many years.
In comparison, it was a krishärd as the outgoing Barack Obama took over after George W Bush eight years ago. The subprime mortgage crisis, which culminated with the Lehman Brothers crash in september 2008, had ruined big parts of the financial industry and created a global recession. The US car industry went on his knees and during Obama’s first year in the White house, went 800 000 jobs in the united states up in smoke.
the Unemployment rate peaked at 10 percent in October 2009.
Source: the Financial Times
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