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Tags: trump | tax | code | jobs | economy

Trump's 10 Million New Jobs and New Tax Code Will Save Economy

Trump's 10 Million New Jobs and New Tax Code Will Save Economy
(Paulus Rusyanto/Dreamstime)

George Mentz By Tuesday, 16 July 2019 08:19 AM EDT Current | Bio | Archive

The Federal Reserve raised rates nine times since Donald Trump announced his presidential election bid. Therefore, the deficit on President Barack Obama’s debt is now up 25%. The fault lies with Obama and Congress for overspending $10 trillion during the Obama presidency.

Now, our children and grandchildren are paying interest on Obama's debt and spending problem. In theory, the cost of interest on the debt went from zero interest during Obama’s term up to 3% on the $20 trillion debt after Obama's last day on the job.

The good news is that the U.S. has been economically lifted over the last 2 years because the value of citizens’ wealth and assets is up $10 trillion since Trump's election primarily due to stimulating jobs, the lowering of regulations and creating a globally competitive tax code.

The other miracle is that 6 million new jobs have been created in the first 2 1/2 years of Trump's leadership. Thus, there are technically 11 million less people who are receiving welfare and public assistance (including 5 million off food stamps) since Obama left office. The 10 million people were Obama's lost generation of folks who could never find good jobs.

It is now 2 1/2 years since Obama left office, and now the taxpayers are swamped with paying interest on Obama’s debt which is about $500 billion in fees per year that the U.S. owes to China and other countries. A whopping 5% of the U.S. government’s operating costs each month are due to Obama’s debt.

If you search online, there are very few economists who analyze the effect of 10 million new jobs on the deficit. The only way to dig yourself out of debt is to make money and pay it off. Thus, with 10 million less people needing subsidies, maybe the government can find a way to become more sustainable.

Long Term Benefits of Tax Reform

The long-term, domestic effect of lower taxes is that people will have more disposable income, spend more money, save more, and put more money on Main Street rather than waste money in DC or on foreign spending.

Sadly, most blue states raised taxes on their local citizens in places like New York and Colorado after Trump lowered the federal taxes on the working families. Blue states jacked up taxes on their citizens by not adjusting their exemptions for children or adjusting other state deductions to mirror the new tax code. Thus, many states’ tax haul zoomed up.

The long term effect of the Trump Tax Cuts is that business worldwide will invest more money in the U.S., keep more assets in the U.S., and establish business in the U.S.

Obama’s Big Debt Legacy

Obama added another $80,000 in new debt to each family in the U.S. in 8 years. If the Federal Reserve continues to raise interest costs on Obama's debt, the costs of running the government may double in a few months.

The Trump Compound Multiplier Effect

In economics 101 courses, they teach about money supply and multipliers. The best kept secret today is that nobody knows the how much the multiplier effect will be from the Trump "Corporate and Self Employed Rate Cuts" will create on a quarterly basis. This will have a compounding result to help local economies, Main Street, job creation, reinvestment, spending, business creation and so forth.

Corporate and Self Employment Rates

While most small businesses in the U.S. were using LLCs and other pass through entities, the bulk of the public traded companies were subject to the highest global corporate tax rates. If all of these corporations now have lower tax rates while the LLCs and other small business are getting better deductions for self-employment, then the tide of cash getting back into the economy should have a “LTCME Long-Term compounding-multiplier effect.” Basically, the U.S. went from last in the world to the middle of the pack on corporate tax rates.

Overall, we will begin to see the long term consequences of the new tax code going forward. We will finally see if the government is saving money due to the new epic employment rates under Trump. We will also find out if the tax haul by the government will be boosted by the extra 6-10 million with jobs.

In the end, the economy handed to Trump was a mess because our former leaders inattentively overspent $10 trillion while the Obama administration didn’t build anything, didn’t fix roads or repair bridges, and didn’t renew our crumbling infrastructure.

The last few times the economy had momentum, the Federal Reserve raised rates too fast and too high creating massive slowdowns because of costs to mortgage holders, loan holders, business borrowers and the like.

The only way to repair the economic damage of the past is to:

  • Stimulate jobs with long-term lower interest rates and lower taxes.
  • Keep the U.S. a safe, super business-friendly nation.
  • Keep the Trump “multiplier effect”going.
  • Prevent the Federal Reserve and Obamacare from killing family disposable income on Main Street
  • Harvest larger tax revenue with lower tax rates on a larger pool of workers, including immigrants.

George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award winning author and advisory board member to several companies around the world in education, charities, and crypto currency.

© 2024 Newsmax Finance. All rights reserved.

The economy handed to Trump was a mess because our former leaders inattentively overspent $10 trillion while the Obama administration didn’t build anything, didn’t fix roads or repair bridges, and didn’t renew our crumbling infrastructure
trump, tax, code, jobs, economy
Tuesday, 16 July 2019 08:19 AM
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