Can Trumps economic plan work?

[Benton]

(01-10-2017, 03:35 PM)Bengalzona Wrote: I didn't mean government spending, although that did happen during the Reagan and Bush admins and could happen again with Trump's planned public work projects and his planned Navy expansion. I meant public spending. Businesses will expand because of tax breaks and deregulation opening new opportunities. Individuals will have a little more money to spend due to planned tax breaks and due to reduced lending requirements from deregulation. The same deregulation will eventually cause a financial crisis. When that happens, traditional conservative thought is to let it "run it's course" and not have government interference. 

Ah. I getcha. 

What businesses do is concerning, but ultimately it's up to them. My first thought (and personal concern) is how much the government involves itself in that.

(01-10-2017, 10:30 PM)hollodero Wrote: Sure, that is true for the home market. I more referred to the fact that Americans pretty much have cars already and just need to replace the broken ones... but there are soo many Chinese people without one. From what I've heard more and more of them don't dig walking any longer. You want access to those markets, or your production is limited and your trade deficit is still here to stay - just with less goods overall. That would have been my point.

I should have explained it better. 

Keeping with the India example (because I already looked up the Corolla cost), there's lots of folks needing a car, as opposed to here where they're replacing cars. But the issue is, even though there's a lot of folks without a car, there's not a lot of folks who can afford one. The car is basically the same price, but the wages to buy the car are very different. In India, the 1.7 million rupees is a large sum. In America, $20k isn't as bad even for lower paid workers. You'd have to bring massive amounts of cash or assets into a society to elevate those large populations to the degree where they have the purchasing power of smaller countries. And that's not generating wealth, it's only moving it around.

There may be a lot of people to tap into in markets like India and China, but I don't know if their population with extra income will ever offset the population that's in abject poverty. America — and in most of Europe — you've got enough people making money to afford vacuum cleaners and shoes. If wages rise with the cost of goods, they can keep buying, which keeps the economy going.