In January, the White House set aggressive goals of 4% annual US economic growth. This growth would supposedly be a result of large federal tax cuts, fewer regulations, and a huge infrastructure plan.
Economists in the new administration appear to be using mind-altering substances. To put this into perspective, the average growth for the 2010-2016 recovery was 2.1% annually. Rather than almost doubling the Obama recovery growth rate, I believe that proposed GOP policies will actually cut current growth. In fact, new GOP rules will likely lead to a new recession.
The economy runs in cycles. Periods of business growth are followed by contraction- as inevitably as night follows day. The average post-WWII recovery has lasted 58 months. At 91 months, the current recovery has lasted considerably longer than most. This recovery may soon collapse simply due to old age. But many proposed Republican policies will certainly hasten the process.
Messing with Healthcare. Healthcare is a huge sector of our economy. In 2015, health expenditures were $ 3.2 trillion, or 17.8% of GDP. Current GOP plans to muck-up Medicare, Medicaid, and Obamacare will wreak havoc on more than a sixth of US economic activity.
Certainly, fewer people will have insurance. Hospitals will face massive lay-offs and closures. Insurance will cost more to those who can still afford it, sucking money out of other sectors of the economy. As a result of only Obamacare repeal, the Economic Policy Institute estimates that 1.2 million US jobs will be lost.
And Republican schemes to privatize/couponize Medicare and slash Medicaid with inflict even more economic damage. Republican healthcare plans will be dramatic and effective job killers.
Anti-Labor Policies. GOP politicians are doing what they love best- taking money out of the hands of lower-paid workers. Already, the White House has announced that they will not defend (in court) Obama's executive order making as many as 12.5 million workers eligible for overtime pay.
With the GOP lock on Washington, the likelihood of a long-overdue increase in the national minimum wage is slim-to-none.
GOP politicians continue their efforts to lower American wages through their unrelenting war on unions. Corporate-shill Republicans have introduced a union-busting national Right-to-Freeload bill in the House. One-trick-pony, Scott Walker, has discussed a national version of Wisconsin's infamous Act 10 with the White House.
Every one of these actions will lower the take-home pay of those most likely to spend the money. Every one of these actions will efficiently put brakes on the economy by drastically curtailing consumer spending.
Xenophobic policies. The new mass round-ups and deportations of undocumented workers are exacting a serious human toll. But these actions will also have a huge negative impact on US economic growth. A recent study estimated that undocumented workers contribute 3% of private sector GDP and would have added nearly $5 trillion in economic growth over the next ten years.
The Muslim ban is also having unintended economic consequences. Scientific research will suffer because Muslim students and technologists cannot continue their work. Non-Muslim students and scientists will reconsider coming to the US, thanks to our current xenophobic government. We will lose our scientific dominance and the accompanying high-pay, high-tech jobs.
Our $2.1 trillion travel industry is already starting to suffer as people from all over the world are reconsidering their US visits. Travel booking sites report flights to the US down as much as 17% since 45's Muslim-banning executive order. Fully one in nine US jobs depend on the travel industry.
Other Job Killing Policies. In addition to the three major job-killing initiatives, the GOP has many other dandy ideas. House pols are pushing for a benign-sounding "border adjustment tax". These new tariffs would ignite a trade war, gutting US exports and inflating the cost of many needed imported goods. We already tried this idea during the Great Depression. It didn't work so well.
The fast-growing solar industry employs over 260,000 Americans. Wind employs another 88,000. The strange anti-science beliefs of Republican politicians will harm US leadership in renewable energy. A party that deletes all mention of global warming from government websites will have no problem in cutting energy research and in ending tax incentives for wind and solar power.
GOP politicians are trying to re-mold America into their own ideological Fantasyland. Screwing-up the healthcare industry, adopting xenophobia as governmental policy, and a continuing effort to depress workers' wages will all have a hugely negative effect on US economic growth. We are entering a new recession of the Republicans' own making.