Several eminent economists believe that without a concrete budget plan or legislative strategy, President Donald Trump’s pro-growth agenda could turn out to be what Silicon Valley calls ‘vaporware’ or promises without a product.
The tepid pace of growth of the U.S. economy in the fourth quarter coupled with stretched valuations are making bulls skittish and giving hopes to bears. In such uncertain times, income seeking investors should look for funds that are exposed to stocks providing handsome dividends.
Trump’s Impractical Budget
In his speech to the Congress, Trump assured that he will keep the several campaign promises made to voters. However, the President’s pro-growth agenda is already in troubled waters on grounds of being inconsistent and impractical.
Hints of lower tax rates along with relaxed regulations have helped the stock markets soar. Yet, his lofty promises are a long way from being delivered on. Trump had pledged to construct a wall on the Mexico border, invest $1 trillion in infrastructure and provide better health insurance at low prices, all without trimming social security or Medicare. In fact, budgeters from both the Republican and Democrat parties said that fulfilling such promises is next to impossible, while arithmetically it simply doesn’t add up. Republican leaders in the Congress believe that Trump can’t balance the budget without opting for deficit spending.
Trump’s willingness to hike defense spending by almost 10% by exacting deep cuts from the State Department and the Environmental Protection Agency (EPA) has also raised eyebrows.The math simply doesn’t work here either. The combined budget of State and EPA comes to around $67 billion, so extracting about $54 billion, as promised, looks impractical. When White House officials added that they will target foreign aid to boost defense spending, indicating a politically popular target, some leading Republicans were at a loss.
