With the economy being one of the most important issues for the 2024 US presidential election, it is both important and relevant that Trump’s record on the economy is reviewed.. The United States has seen numerous presidents, each leaving their mark on the country's economic, social, and political landscape. Among these presidents, Donald Trump stands out as a transformative figure. Based on his economic policies and their significant impact, Trump’s presidency was an economic success. Although the COVID-19 pandemic hurt the US economy in the final year of Trump’s first term, the US economy was strong for the other three years of his term. I will list six points that illustrate why the economy under former President Trump did so well.
Tax Reforms and Economic Growth
One of Trump's most notable achievements was the implementation of the Tax Cuts and Jobs Act (TCJA) in 2017, which was the largest overhaul of the U.S. tax code in over 30 years. This act lowered the corporate tax rate from 35% to 21%, which spurred significant investment in the U.S. economy. The immediate effect of these tax cuts was an increase in consumer spending and capital investment, contributing to economic growth and a robust labor market. The TCJA also introduced changes that benefited individual taxpayers, increasing the standard deduction and adjusting tax brackets, which put more disposable income into the hands of Americans. These policies played a crucial role in driving the U.S. economy to new heights. Before the COVID-19 pandemic, the economy under Trump was characterized by low inflation and steady job growth. The stock market also reached record highs, with the Dow Jones Industrial Average increasing by 57% during his term. These achievements underscore Trump's effective economic leadership.
Job Creation and a Low Unemployment Rate
Under Trump's leadership, the U.S. saw significant job creation, continuing the positive trend initiated during the Obama administration. By 2019, the unemployment rate had fallen to 3.5%, the lowest level in 50 years. This remarkable achievement reflected the strength of the U.S. labor market and the effectiveness of Trump's economic policies, including deregulation efforts that removed barriers to business growth. While the COVID-19 pandemic posed an unprecedented challenge to the economy, leading to a temporary spike in unemployment, Trump's pre-pandemic record of job creation and low unemployment is a testament to his success in fostering a strong and vibrant labor market. Even with the disruptions caused by the pandemic, if the pandemic months are excluded, the U.S. economy added a net of 6.7 million jobs during Trump's presidency.
A Soaring Stock Market
The stock market's performance during Trump's presidency was another clear indicator of economic success. The Dow Jones Industrial Average, along with other major indices, repeatedly hit record highs, reflecting investor confidence in the U.S. economy. The stock market's bullish run, even amidst global uncertainties, demonstrated the market's positive response to Trump's policies, particularly his tax cuts and deregulatory actions. While the market did experience a sharp decline during the early stages of the COVID-19 pandemic, it quickly recovered and continued its upward trajectory, entering a bull market that lasted until 2022. This resilience highlights the solid economic foundation that had been established during Trump's time in office.
Bold Trade Policies
Trump's trade policies, including tariffs and renegotiated trade deals, were central to his economic agenda. While controversial, these policies were designed to protect American industries and workers, particularly in the face of unfair trade practices by countries like China. The imposition of tariffs on thousands of products was intended to give the U.S. leverage in future trade negotiations and to address long-standing trade imbalances. Though these trade policies were met with mixed results—some industries benefited while others faced challenges—the broader goal of protecting U.S. economic interests was clear. Trump's administration aimed to secure better terms for American businesses and workers, which was a significant departure from the trade policies of previous administrations.
Economic Growth
The economy saw significant growth in the Trump administration, with the median income rising above $65,000, marking a substantial increase compared to previous years. Household wealth, including stocks, savings, and real estate, reached record highs during this period. Economic gains were particularly notable among minorities, with African Americans and Hispanics experiencing significant benefits from these policies. The fact that minorities were better off during Trump's first term may push these voters to Trump this election cycle, which would be disastrous for the Democratic Party. A large part of both of Obama's victories in 2008 and 2012 was high turnout amongst African Americans and Hispanics, who make up the voter base for the Democratic Party. If the Democrats lose parts of their voter base to Trump, the Democratic Party's electoral fortunes will be negatively affected.
The Success of the USMCA
The USMCA is a trade agreement between the US, Canada, and Mexico. The USMCA replaced NAFTA and has benefited the US economy. The USMCA introduced significant improvements over NAFTA, particularly in areas such as labor rights, environmental protections, and the automotive industry.
One of the key benefits of the USMCA is the inclusion of stronger labor protections, especially in Mexico, which helps reduce the incentive for U.S. companies to outsource jobs. This has the potential to bring back more manufacturing jobs in the United States. The agreement requires that a significant portion of auto parts be manufactured by workers earning at least $16 per hour, encouraging companies to maintain or establish production in the U.S. rather than moving it abroad. Moreover, the USMCA addresses environmental issues more comprehensively than NAFTA by making environmental obligations enforceable within the core of the agreement. This ensures better protection against environmental degradation, which indirectly benefits the U.S. economy by promoting sustainable practices. Additionally, the USMCA strengthens intellectual property protections, which is crucial for maintaining the U.S.'s competitive edge in innovation and technology. This, in turn, supports job creation and economic growth.
In conclusion, Donald Trump has an impressive record on the economy, which could help him to gain further support amongst the electorate. With seven crucial battlegrounds this election, namely Pennsylvania, Michigan, Wisconsin, Nevada, Arizona, Georgia, and North Carolina, the worsening economy may swing voters toward former President Trump. In 2020, many voters felt that they were better off four years prior. In 2024 with high inflation especially in the sunbelt, voters will feel inclined to vote for Trump because they were better off during his term.
Sources
The Economic Impact of Donald Trump’s Presidency
Donald Trump had an economic record that will be remembered
Trump’s new trade deal with Canada and Mexico is just what we need. Democrats should support it