Economist Arthur Laffer simplified the four keys to a sound economy.
- Low taxes
- Low regulation
- Sound currency
- Free trade
Trump has delivered on the first two and he is undoing the benefit with the last two.
Treasury Secretary Steve Mnuchin has expressed approval for a weaker dollar. Trump is promising higher tariffs. These moves threaten to undo the benefits of his work on tax cuts and regulations.
When the economy stalls the media and the Democrats will hoist all the blame on the first two.
A weakened dollar and tariffs may have short term benefits but added to the tax breaks may provide too much stimulation too quickly. Long term a weak dollar and tariffs hurt the consumer and the economy.
The irresponsible deficit may cause a loss of control over the interest rates. Once short term treasury rates exceed 3.5% there is a lot of money that will leave a stock market rising into the clouds. It will cause a spiraling of the deficit as interest costs consume a greater portion of the budget.
Trump is building only half a bridge. It will cost a lot of money and will not get you where you need to go.