Obama vs. Trump: Economic Policies

Republican Donald J. Trump was the 45th leader of the United States. He was in office from 2017 to 2021. He made similar promises to most Republican presidents, including lowering taxes, reducing trade and budget deficits, reducing the national debt, and increasing defense spending. Democratic candidate Barack H. Obama was the 44th president. He served for two terms, from 2009 to 2017. He made similar promises to other Democratic presidents, including raising taxes on wealthy individuals and families, expanding access to health care, and tightening regulations. Here is a comparison of their positions on seven key economic issues: trade, regulations, national debt, health care, defense, and recovery from the recession and climate change.

Defense

More money was spent on the military under both presidents than under any government since World War II. Trump set aside $576 billion for the Department of Defense in Fiscal Year 2020. The DoD budget, however, is only one aspect of military spending. Additionally, there is emergency money that is not affected by sequestration. That money is allotted by Congress for foreign wars. Trump allocated $174 billion out of his $750 billion defense budget. The National Nuclear Security Administration of the Department of Energy also conceals military spending. The FBI is supervised by the Department of Justice. The Departments of Homeland Security and State also assist in supporting national defense. The total amount spent on the military in FY 2020 was $989 billion. Osama bin Laden, who carried out the 9/11 terrorist attacks, was killed by Obama. The al-Qaida leader's compound in Pakistan was bombed on May 1, 2011, and later that year, Obama ordered the withdrawal of US forces from the Iraq War. Troops had to return three years later because of new threats from the Islamic State organization. With their prolonged dispute over the Strait of Hormuz, the Sunni-Shiite division has an impact on the American economy. Although it is a religious conflict, Saudi Arabia and Iran's conflict in the Middle East is of economic consequence to the entire world. Whoever gains control of the waterway through which 20% of the world's supply of crude oil flows is at the center of the conflict. Obama formally ended the Afghan war in 2014. The cost of the military should have decreased once the wars in Iraq and Afghanistan were over. But it did not significantly diminish it. Military spending was the largest discretionary budget item for FY 2014, totaling over $600 billion, and one of the main contributors to the national debt and budget imbalance. By 2020, the War on Terror's spending will have increased the U.S. debt by almost $2 trillion. Obama employed a non-military strategy to lessen the possibility of a nuclear exchange with Iran. On July 14, 2015, Obama brokered a nuclear peace pact with Iran. Iran's economy significantly improved as a result of the United Nations easing the economic sanctions it had imposed in exchange for the nuclear accord in 2010.8 Trump, though, decided to withdraw America from that agreement. His efforts to strengthen international diplomacy and inter-peoples' cooperation contributed in part to his 2009 Nobel Peace Prize, which he received for his "extraordinary efforts to strengthen international diplomacy and cooperation between peoples." 10. Despite his "peaceful" reputation and actions, the Obama Administration spent more on defense than any previous president.He allocated $531 billion to the DoD in FY 2010, his first budget, and reached a peak of $708 billion in military spending in FY 2011.

Recovery and Recession

Trump won the election in 2016 by persuading supporters that economic development ought to be improved. He projected a growth rate of at least 4%. His supporters were unaware that such rapid growth is risky and unsustainable. It develops into a bubble and prompts a downturn. These boom and bust cycles can be seen in many different situations. The United States began a recession in February 2020. The GDP shrank by 5% in the first quarter of 2020. The March 2020 stock market meltdown was brought on by uncertainty regarding the pandemic's effects. It began a bear market, bringing to a halt the longest expansion in American history. In response to the COVID-19 epidemic, President Trump proclaimed a national emergency on March 13, 2020, ordering Americans to stay indoors. Both non-essential businesses and Schools were closed. This was carried out to prevent the virus from spreading and hospitals from becoming overcrowded. The following laws were passed by the US Congress:

H.R. For their response to the pandemic, federal agencies received $8.3 billion from 6074.
H.R. Paid sick leave, insurance coverage for coronavirus testing, and unemployment compensation totaled $3.5 billion under 6210.
H.R. Act to Aid in the Relief and Economic Security from Coronaviruses (748), (CARES Act). The $2 trillion aid plan includes assistance for businesses and local governments, as well as stimulus checks for eligible households and enhanced unemployment insurance.
The H.R. Paycheck Protection Program and Health Care Enhancement Act of 266 provided $483.4 billion for hospitals, testing, and small businesses.
After losing 881,000 jobs in March, the U.S. economy shed an amazing 20.5 million jobs in April 2020, causing the unemployment rate to increase to 14.7 percent. Without accounting for seasonal effects, retail sales in the United States fell 12.66 percent in April 2020 compared to the previous month.
Obama dealt with the recession of 2008–2009. To fight it, he adopted an expansionary fiscal strategy. The recession ended in the third quarter of 2009 as a result of the American Recovery and Reinvestment Act, which he signed into law.
On March 30, 2009, Obama bailed out the American car industry by taking over General Motors and Chrysler, saving three million jobs.
President Obama established the Home Affordable Refinance Program using the Troubled Asset Relief Program. Homeowners who were in default on their mortgages were saved.

Medical Care

25 supporters of the Affordable Care Act claim that his administration's approach to healthcare was designed to undermine the legislation.He increased the cost of premiums by 20% and expanded the market for short-term insurance. Obamacare is more expensive, but it doesn't offer the same advantages. He also permitted the imposition of work restrictions on Medicaid applicants by the states. The Tax Cuts and Jobs Act was also signed by Trump. The ACA's requirement that everyone have health insurance or face a penalty was abolished. That gave insurance firms access to expensive sick people while allowing healthy people to abandon their plans. As a result, premiums will inevitably increase. Trump's supporters were angry over the cost of healthcare. The culprit was Obamacare. Many of them had lost their insurance from their employers. When using the health care exchanges, they later discovered that individual coverage was more expensive. Others believed it was unfair that they were required to accept insurance plans that included maternity care as one of the 10 basic benefits. The ACA forbade annual and lifetime limits and required insurers to provide coverage to everyone, including individuals with pre-existing diseases. Medicare underwent modifications as a result of the ACA. One improvement was the expansion of prescription drug coverage. Trump's health care plans did not make an attempt to modify these specific elements of the ACA. It also started compensating hospitals for quality of care rather than for each test or procedure. The ACA taxes were to be repealed by Congress. The ACA started taxing those who made $200,000 or more in 2013. In 2014, a tax was paid by anyone without health insurance. Obama fought for the ACA's passage in 2010 with the intention of bringing down medical expenses. Healthcare costs are among the most frequent reasons for people to declare personal bankruptcy, even for those who have insurance. Many policies at the time had annual and lifetime limits that were readily exceeded by chronic sickness. The Medicare and Medicaid bills threatened to eat the budget alive. Most of the Act's benefits didn't take effect until after 2014. In addition to closing the Medicare "doughnut hole," Obamacare also made health insurance available to everyone. It slows the growth of the expense of health care nationally. More people can now afford preventive healthcare thanks to it. They can take care of themselves before they need to go to the emergency room, which is pricey. The cost of Obamacare was predicted by the Congressional Budget Office to be slightly under $1.1 trillion in 2012. A large portion of these expenses went toward extending Medicaid and the Children's Health Insurance Program to cover more people in low-income brackets.

Trade

Trump declared that he preferred bilateral deals and disagreed with many multilateral ones. Under Trump, he renegotiated NAFTA under a new name—the U.S.-Mexico-Canada Pact (USMCA)—and withdrew from the Trans-Pacific Partnership, the largest free trade agreement in history. The TPP was negotiated by the Obama administration prior to the Trump administration's withdrawal. Additionally, the Obama administration completed bilateral agreements with South Korea in 2010, Colombia in 2011, Panama in 2011, and Peru in 2009, 37, 38. The Transatlantic Trade and Investment Partnership, which the Obama administration started but didn't complete negotiations for, effectively died under the Trump administration's inaction. Trade protectionism was advocated by Trump.With a variety of tariffs in 2018, he started a trade war with other countries. In January 2018, he placed tariffs and quotas on Chinese imports of solar panels and washing machines. He announced a 25% tax on imports of steel and a 10% duty on imports of aluminum in March 2018. Trump's tariffs on $34 billion of Chinese imports went into effect on July 6. The administration announced a 25% tariff on Chinese goods worth $16 billion on August 2, 2018. But Trump departed office without definitively ending the trade battle, although he did roll back some tariffs, so the outcome is still up in the air. Many economists, however, believe that a protracted trade battle will ultimately harm American consumers and businesses and may even trigger an economic recession. In order to put pressure on China to lower its trade surplus with the United States, Trump also pledged to brand the country as a currency manipulator. He implemented tariffs as president without formally designating China as a manipulator. The history of dollar to yuan conversion showed that China's currency is, in fact, overpriced.

Regulations

In 2010, Obama approved the Dodd-Frank Wall Street Reform Act. It reduced the likelihood of another financial catastrophe by regulating complex derivatives and non-bank financial institutions like hedge funds. Additionally, Dodd-Frank controlled prepaid, debit, and credit cards. With the Consumer Financial Protection Bureau, it put an end to payday loans. Dodd-Frank wanted to entirely repeal it. According to him, banks are unable to extend more loans to small enterprises. On May 22, 2018, Congress approved a reduction of some Dodd-Frank regulations for these banks. The Economic Growth, Regulatory Relief, and Consumer Protection Act relaxed regulations on "small banks," which are defined as institutions with assets of between $100 billion and $250 billion. Because of the reversal, the Fed can no longer declare these banks to be "too large to fail." They don't need to hold as many assets to safeguard against a cash shortage. These smaller banks no longer need to comply with the Volcker Rule, and they may not be subject to the Fed's "stress tests."

Deficit and Debt

Both presidents racked up fiscal deficits that broke records. The highest deficit in American history was produced by Obama's stimulus plan, which increased President George W. Bush's final budget by $253 billion. The recession caused a nearly $600 billion drop in revenue. The outcome was a $1.4 trillion budget deficit for FY 2009. The Obama tax cut extension increased the budget deficit to $1.3 trillion in fiscal years 2010 and 2011. The deficit decreased yearly as the economy grew. By FY 2016, it had reached $585 billion. But the deficit by the presidency soared under Trump's budgets, even before the COVID-19 outbreak. The deficit reached $3.1 trillion in FY 2020. The debt is increased by the budget deficit each year. However, an economist at the St. Louis Federal Reserve discovered that the whole sum owed to the Social Security Trust Fund, or off-budget, is not included in the reported deficit. Each administration employs this deception to make deficits appear lower. As a result, analyzing debt by the president offers a more accurate indicator of government spending. Trump broke his election-year pledge to pay off the debt. Trump, like other Republicans, thought tax cuts might encourage that level of growth. His proposal to decrease the debt hinged on raising economic growth to 6%. However, the data demonstrates that, even prior to the epidemic, Trump's tax cuts had no impact on the budget or debt. Trump vowed to reduce waste. However, some of his tactics are in conflict with the five untruths about reducing government spending. These include reducing foreign aid, boosting growth by raising defense spending, and reducing entitlement programs. According to research, these methods aren't the best for reducing expenditure or growing the economy.

Changing Climate

Obama oversaw international efforts to complete the Paris Climate Agreement on December 12, 2015. Countries reached an agreement to promote carbon trading and decrease carbon emissions. Members voted to set a 2-degree limit on global warming above pre industrial levels. Developed nations are committed to giving emerging markets $100 billion annually. Typhoons, rising sea levels, and droughts are the most common effects of climate change in many developing countries. The deal must now be ratified by at least 55 of the 196 member nations before it can take effect. At the 2016 G20 summit, China and the United States decided to ratify the deal. Around 40% of the global greenhouse gas emissions come from these two nations. In 2014, Obama made regulations to reduce carbon emissions public. He implemented the Clean Power Plan in 2015. The goal of the plan is to cut carbon dioxide emissions by 32% from 2005 levels by 2030. Setting carbon reduction targets for the country's power plants accomplishes this. By 2030, power plants will produce 30% more renewable energy to comply. By enabling states that emit less than the caps to swap their excess with states that emit more than the limitations, it promotes carbon emissions trading. Trump declared the United States would leave the Paris Climate Agreement on June 1, 2017. Although President Biden ultimately undid many of these actions by rejoining the Paris Climate Agreement, cancelling the permit for the Keystone XL pipeline, and more, he pulled back Obama-era climate initiatives and approved the project.

Questions and Answers (FAQs)

How long will the economy be referred to as "Obama's" or "Trump's"?

Due to the size and complexity of the American economy, it can be challenging to pinpoint the precise moment at which one president's policies begin to have greater influence than those of their predecessor. Instead of attempting to determine the consequences of a full administration, it might be simpler to gauge the influence of individual programs.