ECO 231 ASSIGNMENT #5 - Danah Aeda ECO 231 Assignment No 5...

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Danah Aeda ECO 231 - Assignment No. 5 16 November 2018 National Economic Issues With the recent midterm election, many economic issues were overshadowed by the several social issues. However, there are a few possible major economic changes that will stem from trying to solve the social ones. Of these developments, it is important to take note of possible tax and trade policies. Before getting into these possible transitions, it is important to point out that the results of the election are as follows; the Senate is still mostly Republican, however, the House of Representatives has come under the control of Democrats. Obviously, we still have the same president. In terms of tax policies, many factors play into them. First, there’s the issue of tax cuts. According to the New York Times article titled “What Democratic Control of the House Could Mean for Your Wallet”, the House Democrats want to focus on stopping Trump from giving further tax cuts to businesses and, instead, give them to the middle class. President Trump has actually somewhat agreed, stating, “ If Democrats come up with an idea for tax cuts, I would certainly be willing to do a little bit of an adjustment.” The tax cut in question would be awarding the middle class with a 10% tax cut. Another tax issue would have to do
with entitlement programs such as Medicare, Medicaid, and Social Security. While Republicans have been working to decrease spending on such programs, Democrats will now be putting in the effort to make sure those programs are still up and functioning at a better capacity. Whatever happens with this issue will definitely have an impact on the taxes the everyday working citizen must pay. When it comes to trade policy, the president can pretty much set tariffs without Congressional approval. The goal of the Democrats is to change this so that the president’s influence over trade can somewhat be more controlled. This will be difficult and most likely not possible anytime soon because approval would require at least a 60-vote majority from the Senate (which is mostly republican), according to the same New York Times article. However, to point out the most prominent trade issue, I would like to discuss the tariffs on Chinese goods. President Trump has imposed a tariff of 10% on over $250 billion worth of Chinese goods. He plans to increase this tariff to 25% within less than two months, depending on how progress goes at the next summit meeting with China. Considering the fact that China is our biggest trading partner, this will affect American consumers in a way that will have to do with companies taking on the extra burden by increasing their prices to the public. I would like to close this out with a word on elections and their impact economically. This election obviously revolved around social issues which, as I
mentioned before, almost completely overshadowed the economic issues. No matter how anyone voted, the impacts of this election will be felt by every citizen

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