Moody's: Trump's economic plan would cause lengthy recession, higher debt load

An analysis by Moody’s finds that, if implemented, Trump’s economic plan would likely result in an extended recession and increased debt. From The Hill:

Moody’s tested Trump’s plans under three scenarios: one in which Trump is taken at face value and his plans are enacted exactly as he has described, a second where his policies are adopted but at a more modest level, and a third where a skeptical Congress scales back Trump’s plans due to “political realities.” Moody’s described the third as the most likely case if Trump were elected.

But even under that scenario, Moody’s predicted the U.S. economy would effectively freeze under Trump and job growth would be roughly halved from its current pace.

If Trump’s plans are fully enacted, Moody’s said the U.S. economy would dive into a recession that would last over two years — longer than the downturn caused by the financial crisis, although less severe. Trump’s policies would also slash U.S. job growth by 3.5 million jobs compared to the current trajectory.

Here’s the conclusion from the report:

His tax and spending proposals will result in very large deficits and a much higher debt load. A future Congress may be able to rein in this profligacy, but it will not be easy, as there is a gulf between what he says he wants on taxes and spending and what it will take to make the budget arithmetic work.

He is also very suspicious of globalization. His willingness to threaten higher tariffs on U.S. trading partners and his sharp criticism of major trade deals signal a reversal on the long-running expansion of U.S. trade and foreign investment. Requiring millions of undocumented immigrants to leave the country also signals less openness to the rest of the world.

The upshot of Mr. Trump’s economic policy positions under almost any scenario is that the U.S. economy will be more isolated and diminished.

One of the core elements of Trump’s appeal is his skill as a deal-maker and businessman. A big part of his promise to “Make America great again” is the assumption that, if elected, he would help the sputtering American economy roar back to life. So his campaign will need to explain why Moody’s analysis of his proposals got it wrong. In the meantime, this report represents one more avenue of attack the Clinton campaign can take against Trump.

Moody’s states a similar analysis of Hillary Clinton’s economic proposals is “forthcoming.”