President-elect Donald J. Trump is Time’s 2016 Person of the Year, the magazine announced Wednesday on the “Today” show.
In the Time article accompanying the announcement, the president-elect once again appeared to reiterate his support for expensive new infrastructure spending and tax cuts as economic stimulus.
This thinking is more closely aligned with President Barack Obama’s back in 2009 than with that of fiscal conservatives, who argue the government should keep debts lower.
“Well, sometimes you have to prime the pump,” he told Time. “So sometimes in order to get jobs going and the country going, because, look, we’re at 1% growth.”
(Trump made the comments for the magazine the day before the second estimate of third-quarter gross domestic product showed the US economy expanded at 3.2% clip, according to Time.)
Trump has proposed to invest $550 billion into US infrastructure (down from his previous proposal of $1 trillion) through a mix of private and public investment.
Markets have reacted positively to these initiatives. The US dollar, for example, strengthened against other major and emerging-market currencies after his election.
A team from HSBC previously argued that his looser fiscal policy would be a positive for the greenback because it believes the boost to interest rates would be greater than any negatives resulting from higher inflation and a wider current account deficit.
But other economists were less optimistic. At a meeting attended by Business Insider, David Kelly, the chief global strategist at JPMorgan Asset Management, said the plan was like "taking a well-done steak and putting it on broil."
More specifically, he argued that with a tight labor market, improving inflation, and slow but improving economic growth, the Trump plan had the danger of kicking the economy to an unsustainable level. This would include soaring inflation and the possibility of massive interest-rate hikes by the Federal Reserve to offset the price increases.