Last month, the analytics arm of credit ratings agency Moody’s released a report on what the U.S. economy would look like under a Donald Trump administration. Its assessment wasn’t pretty. Lead author Mark Zandi concluded that Trump’s policies would lead to a “more isolated and diminished” economy that would “suffer meaningfully.”
On Friday it was Democratic candidate Hillary Clinton’s turn to get the Moody’s treatment and her economic proposals faired much better.
After assessing her policies on taxes and government spending, foreign immigration, and the federal minimum wage, Moody’s concluded that a President Hillary Clinton would oversee a “somewhat stronger U.S. economy.”
Near-term growth would benefit from her spending plans and her proposal for much stronger foreign immigration. “Increased government spending, particularly more infrastructure investment financed primarily by higher taxes on the well-to-do, acts as an economic stimulant.”
The report praised Clinton’s plan to increased spending on infrastructure, which Trump has also said he would do.
One particularly difference between the two candidates: Clinton has pushed for paid family leave. The report also says that would lift labor participation, and more government spending on early childhood and college education “would raise the educational attainment of workers.”
But her proposals are not without costs. The higher tax rates she proposes, the report says, would reduce the incentives to save, invest, and work. Her policies would also help the low- and middle-class since their tax bill would remain largely the same and they will benefit from increased government assistance. High-income households, meanwhile, will pay much more in taxes under a Clinton White House.
Moody’s assessment of Trump said that under his proposals the U.S. economy would “avoid a recession…but growth comes to a near standstill early in [his] term.” Long-term economic growth would slow and the trade deficit would rise. At the time of the report’s publication in June, the Trump campaign disputed the assessment and took issue with its conclusion that proposed tax cuts would hamper the economy.
It should be noted that Zandi, chief economist for Moody’s Analytics, is a registered Democrat and has donated to Clinton. Nonetheless, in 2008 he served as an advisor to presidential candidate Senator John McCain, a Republican from Arizona.
What’s more, it’s important to keep in mind that Trump and Clinton’s proposals are just that, and that their implementation depends largely on how much support they could drum up in Congress as president.
