Obama vs Trump , A Two Part Bonus Round
Have you ever wondered how Barack Obama would stack up against Donald Trump, head to head? On tax policy and economics? We can answer that question if we follow the evidence. Because both presidents gave us an extra bonus round in the battle for the truth about supply side economics: The Obama Reversal and the Trump Rechallenge.
In January, 2009, Barack Obama entered office to focus on the crashing economy that Bush left behind. His primary tool was fiscal stimulus: an 800 billion dollar package of federal borrowing and spending, expansion of the money supply, a bailout of the automobile industry, and a tax cut for the middle-class. In other words, he stepped on the gas. Republicans complained bitterly about the stimulus, vowing that it would cause runaway inflation, devalue the dollar, and wreck the economy.
They just hammered away at Obama. It was as though they had lit the house on fire and jumped out the back window. Then when Obama came in through the front door with a big fire hose, they accused him of using too much water. But Obama was on a mission to repair the economy, which began to improve by the end of his first year. The deficit improved over the next several years, and none of the bad things happened. Inflation remained low, the dollar got stronger, and jobs growth returned.
Obama did not address supply side tax policy until 2013, when he increased tax rates for the rich just as Clinton had. Not surprisingly, this tax increase on job creators was followed by a steady reduction in the federal deficit by more than half and continuous economic growth through the remainder of Obama’s presidency as he added sixteen million new jobs in his final seven years and ended his Presidency with 75 consecutive months of jobs growth – an all-time record.
When we mark Obama’s tax increase for the rich on our timeline, we do not see any harm to jobs growth – just an improvement in the deficit. Surely, this was the end of supply side economics. Guess again. In 2017, Donald Trump became president, and by the end of the year, he had done it again – by cutting taxes for the rich at a total cost of $2.3 trillion.