For the Americans who cast their votes for President-elect Donald Trump, the issue of inflation has been a major concern. Many individuals feel frustrated by the soaring prices of almost everything in the US from vehicles and gasoline to dairy products. The situation ultimately led them to cast their vote based on their economic situation.
Specifically, the states where real wages have decreased, leaving people with diminished purchasing power shifted towards Trump significantly in the hope of him managing rising costs.
Nonetheless, some economists have argued that if Trump implements his campaign proposals, his second term may lead to a rise in inflation to the same level that helped him secure victory in the presidential race. The level to which the incoming administration might drive inflation is based on how many of the proposals of the campaign will come to fruition.
However, there is a growing agreement that prices could increase if Trump continued with his aggressive agenda. This idea has been challenged by Trump’s team, during his speech during his campaign in August, he assured citizens that his plans would have no adverse effect on US prices and vowed to reduce them.
Taylor Rogers, the spokesperson of the Republican National Committee stated to BI that if Trump is elected, he would once again reduce taxes to bring down the high prices of groceries and other products.
The proposals of Donald Trump that seem to likely cause inflation include widespread deportation of immigrants, tariffs on imports and reduction in taxes. Economists believe that if Trump delivers all these plans, the rise in inflation is almost inevitable. Nobel Prize winner, Paul Krugman reading the tariff proposal states that every action taken through federal policy clearly has an inflationary impact. Whether or not the inflation will increase or not, will be known when Trump begins his second term.
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