Fact check: Donald Trump’s economic policies would cost the country nearly 3.5 million jobs

Moody’s report: “The upshot of Mr. Trump’s economic policy positions under almost any scenario is that the U.S. economy will be more isolated and diminished.” “The upshot of Mr. Trump’s economic policy positions under almost any scenario is that the U.S. economy will be more isolated and diminished.”

Moody’s report: Donald Trump’s economic proposals “will result in a more isolated U.S. economy,” with reduced cross-border trade, immigration, and foreign direct investment. “Broadly, Mr. Trump’s economic proposals will result in a more isolated U.S. economy. Cross-border trade and immigration will be significantly diminished, and with less trade and immigration, foreign direct investment will also be reduced. While globalization has created winners and losers in the U.S. economy in recent decades, it contributes substantially to the ongoing growth of the U.S. economy. Pulling back from globalization, as Mr. Trump is proposing, will thus diminish the nation’s growth prospects.”

Moody’s report: “The economy will be significantly weaker if Mr. Trump’s economic proposals are adopted.” “Driven largely by these factors, the economy will be significantly weaker if Mr. Trump’s economic proposals are adopted.”

Moody’s report: Donald Trump’s economic proposals would result in a “lengthy recession” and would shrink the U.S. economy. “Under the scenario in which all his stated policies become law in the manner proposed, the economy suffers a lengthy recession and is smaller at the end of his four-year term than when he took office (see Chart).”

Moody’s report: Under Donald Trump’s economic policies, the country would lose nearly 3.5 million jobs and the unemployment rate could rise to 7%. “By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today.”

Moody’s report: Under Donald Trump’s economic policies, incomes would stagnate and stock prices and home values would decline. “During Mr. Trump’s presidency, the average American household’s after-inflation income will stagnate, and stock prices and real house values will decline.”

Moody’s report: Donald Trump’s economic proposals would benefit high-income households disproportionately. “Those who would benefit most from Mr. Trump’s economic proposals are high-income households.”

Moody’s report: Job losses resulting from Donald Trump’s economic policies would most affect lower- and middle-income households. “Everyone receives a tax cut under his proposals, but the bulk of the cuts would go to those at the very top of the income distribution, and the job losses resulting from his other policies would likely hit lower- and middle-income households the hardest.”

Moody’s report: Donald Trump’s economic proposals will result in a less global U.S. economy, larger government deficits and more debt, disproportionate benefits to high-income households, and a weaker U.S. economy. “Even allowing for some variability in the accuracy of the economic modeling and underlying assumptions that drive the analysis, four basic conclusions regarding the impact of Mr. Trump’s economic proposals can be reached: 1) they will result in a less global U.S. economy; 2) they will lead to larger government deficits and more debt; 3) they will largely benefit very high-income households; and 4) they will result in a weaker U.S. economy, with fewer jobs and higher unemployment.”

Moody’s report: Donald Trump’s proposed policies would require massive spending cuts to avoid $1 trillion deficits. “The Moody’s analysis says Mr. Trump’s spending and tax-cut commitments, which include increases in veterans’ and border security funding but no changes in entitlement programs, would require massive spending cuts elsewhere in the federal budget to avoid $1 trillion deficits.”

Moody’s report: Donald Trump’s trade policies could raise overall consumer prices by 3%, reduce American exports, and hurt growth. “On trade, Mr. Trump has said he would use the threat of a 45% tariff on goods from China and 35% on non-oil imports from Mexico as a negotiating tool in seeking better trade and currency terms. Moody’s calculates that tariffs on imports from Mexico and China could increase goods import prices by 15%, raising overall consumer prices by 3%—all before factoring in the costs of retaliation against U.S. exporters. The Moody’s economists warn that those tariffs would raise uncertainty for businesses, reducing American exports while corroding growth. While higher tariffs would quickly lead importers to move production to other countries, this would take time and also raise costs for businesses.”

Moody’s economist on Donald Trump: “There is a gulf between what he says he wants on taxes and spending and what it will take to make the budget arithmetic work.” “‘There is a gulf between what he says he wants on taxes and spending and what it will take to make the budget arithmetic work,’ said Mr. Zandi.”