President Joe Biden’s plans for the economy are much better than those of Donald Trump, according to a new study from Moody’s Analytics.
If Trump wins and can implement his plans, including extending his tax cuts for millionaires and tariffs on imported goods, Moody’s expects America to tumble into a recession in 2025. Long term, Trump’s announced economic plans would depress economic growth and drive up prices.
Everything would be made worse under a “Republican sweep scenario” where Republicans capture Congress as well as the White House and enable Trump’s other plans, such as a mass deportation of immigrants. Under that scenario, Moody’s sees not just a prolonged slowdown in the economy, but a sharp increase in inflation and interest rates.
On the other hand, if Biden wins, inflation is expected to drop below 2% while the economy continues steady growth.
Trump’s plan for mass deportation would choke an already tight labor market, making it hard for companies to find workers. That could be good for remaining laborers in some jobs, as companies are forced to fight over a shortage of workers. But for everyone else that would mean increased inflation and product shortages.
The shortage of immigrant workers could hit agricultural production especially hard. Florida’s efforts to limit immigrant workers on farms in that state are already generating “ghost towns” where farmers are unable to find the help they need and a major industry has been disrupted. If Trump were to take such policies nationwide and carry through on anti-immigrant threats, Americans might see the nation’s abundance of food that is produced in this country—an abundance that means they spend less of their income on food than any other country—sharply reduced.
“Biden’s policies are better for the economy,” Mark Zandi, chief economist of Moody’s Analytics told USA Today. “They lead to more growth and less inflation.”
Moody’s also worries that, if Trump wins, the Federal Reserve might be forced to increase interest rates even more to address rising labor costs and renewed inflation. That raises the chance that Trump could generate a double-dip recession where the economy drags along for years.
They also project that Trump’s policies would lead to an overall loss of jobs. By the end of a second Trump term, Moody’s projects over 3 million fewer jobs than if Biden is reelected. Extending his tax cuts would also add $5.2 trillion to the nation’s debt.
If Biden wins the White House, Moody’s projects inflation to continue to fall and return to the Fed’s 2% target by summer 2025. Additionally, growth accelerates, jobs continue to be added and the deficit goes down.
It’s an enormous contrast.
As USA Today notes, Trump’s policies frighten even the libertarian economists at the CATO Institute. They predict that Trump’s policies would be highly damaging to the U.S. economy.
With Biden, Americans get:
With Trump they get:
This is just one more area where it seems like the choice should be blindingly obvious. And that’s before even considering the other effects, like the damage done by tearing apart immigrant families and destroying environmental progress.
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