Vern Sumnicht for USA Today, Post-Crescent – Investment opportunities still persist
Posted on: 03/11/2017
Vern Sumnicht, For USA TODAY NETWORK-Wisconsin
By all accounts, President Trump’s first address to Congress on Feb. 28 was well received. Considering the Dow Jones Industrial Average climbed over 300 points the next day, it’s safe to say the markets agreed. So far, the markets have added $3 trillion in value since Election Day.
The positive market reaction to President Trump’s proposed policies is great to see. However, even with a Republican president and a Republican majority in the House and Senate, current proposals to cut taxes, reduce regulation, reform health care, rebuild the military and renovate our infrastructure are going to be difficult to accomplish.
The current president is sometimes compared to former President Ronald Reagan. However, in the early 1980s when President Reagan was trying to pass tax cuts, the environment was much different than it is today. Democrats were willing to participate because Reagan’s proposal was revenue-neutral and included closing loopholes that Democrats saw as tax breaks for the wealthy. Today we don’t have nearly as many loopholes to be closed, and President Trump’s tax cuts aren’t likely to be perceived as “revenue neutral.” This will make it difficult for Democrats and some Republicans to support a bill to cut taxes. Rebuilding the military, health care reform and spending $1 trillion on infrastructure while cutting taxes will certainly be a challenge considering the excessive U.S. government debt.