Trump presidency could increase US government debt by 80% of GDP over 20 years – RBS

Research Team at RBS, suggests that the Republican candidate Donald Trump economic plans are still to be fully determined but he has been consistent on the campaign trail about his intention to significantly reduce tax rates on individuals and businesses, while being much less clear on spending cuts.

Key Quotes

“Based on campaign promises, the Tax Policy Center estimates that the planned cut could reduce federal by as much as $9.5 trillion over a decade. This study adds that if the curb is tax is not matched by spending cuts, the US debt could increase by nearly 80% of GDP by 2036.

Mr Trump’s fully-formed economic plans may differ significantly on both sides of the income statement from the Tax Policy Centre illustrations, which assume no cuts to spending. But the thrust of the economic plan seems clear: a fiscal stimulus fuelled by tax cuts.

Mr Trump’s polling figures are also clear. The markets must take the possibility of such a fiscal course seriously.”