Making Mexico Pay for Border Wall: Ideas Abound, and So Do Obstacles

President Trump proposed on Thursday that he plans on using Mexican money to build his wall.  Trump suggested that a 20 percent tax on imports from Mexico, totaling around 300 billion dollars will fund it.  The article explains some trouble with tariffs, starting with the fact that a 20 percent tax on imports from Mexico would violate the North American Free Trade Agreement and also the rules of the World Trade Organization.  Trump also talked about taking the United States out of the global trade accord, which would likely impose enormous costs on the American and world economies and could even start a global trade war.

            The article goes on to talk about blocking money transfers. It states that Mexico receives about $25 billion a year from Mexicans living abroad, primarily in the United States.  Trump threatened that he will change the rules of the Patriot Act antiterrorism law to forbid immigrants who cannot prove that they are a legal resident from tiring money abroad.  Trump hopes that the loss of resources will force the Mexican government to offer to pay for the wall.

The article also dives into possible ways of getting access to other money.  It suggests charging Mexicans more for visas and boarder cards, but it would take a ton of charges to be able to cover the cost of the wall.  Mexican companies have close to $20 billion dollars and nearly 12 million Mexicans investing and living in the United States so Trump could most likely find money somewhere, but he must be careful of the income tax treaty the United States has with Mexico.  The United States agreed to tax Mexican residents who are subject to income tax at a reduced rate.  Trump needs to make sure that he does not break the law.

            The article concludes by talking about the overall ultimate price, stating that Trump has acknowledged that how Mexico pays might be very complicated, which could bean that he plans on getting a majority of the money elsewhere.  Trump must be careful on how he finds funding for his wall.

https://www.nytimes.com/2017/01/26/business/economy/mexico-pay-border-wall-trump.html?ref=business

Trump's immigration ban sends shockwaves

As of Saturday, Trump's executive order will ban more than 130 million people from the United States and will deny entry to all refuges. The move sent "chaos and confusion" through law enforcement agencies, airports, and foreign capitals, as they attempt to "grasp the US's new policy." The executive order is set to ban travelers from Iran, Iraq, Libya, Somalia, Syria, Sudan, and Yemen, all of which are Muslim majority nations, earning the order the title of "Muslim ban."

Effects of the order have been seen recently at John F. Kennedy Airport where more than 300 demonstrators attended, in protest of the recent policy. Recently, protest also took place at Logan airport in Boston with over 100 demonstrators.

Trumps administration has responded to recent comments of racism by saying that this was necessary in order to improve the "vetting" process of travelers. Trump also added that he believes the government "is totally prepared" to handle the situation. President Trump has signed a large amount of executive orders in his short time as president, many of which bring have brought concern and confusion to the public and it will be interesting to see how the public and other nations react to Trump's policy.

Link: http://www.cnn.com/2017/01/28/politics/donald-trump-executive-order-immigration-reaction/index.html

Trump pulls TPP bid

https://www.bloomberg.com/view/articles/2017-01-25/r-i-p-tpp

In the first few days of Trumps administration he has taken several executive actions.  One in particularly had been in the works for many years it was also subject to attacks from both Trump and Clintom during the election campaign.   TPP or the Trans Pacific Partnership was more than just another "free trade" deal as Trump would label it.  It provided protections for labor including freedom of association, prohibitions on forced or child labor, and the right to collectively bargain.  It also would've benefited corporations as well as it allowed for them to receive intellectual protection all the way to being treated the same as local business in the countries that signed the agreement.

It seems that the very things that Trump had talked about needing to do to improve trade like protecting the American worker and more would've been covered in TPP.  Although some did question if it were possible to enforce the rules outlined in it. It still seems like it would be an improvement from the current situation. 

http://www.economist.com/blogs/graphicdetail/2017/01/daily-chart-21f

I felt that this s article fit in well with what other people were posting about. Trumps wall is huge in the news right now.

I thought that this article was interesting because trump has been promising to build this wall ever since he started running for president. He said that with building this wall the crime rate will decrease because the amount of illegal immigrants will be reduced. I feel that building the wall will not make a great impact on the crime rate because not all criminals are immigrants. Another question I have is who is going to be paying for the wall cause Mexico already stated that they will not be paying for the wall, if that's true how is the United States going to fund this. The money that will be spent could be used to better the health and education of the United States. It will be interesting to see how this all plays out 

The 12 executive actions Trump has signed (so far)

Being in office for only a week, Donald Trump has signed 12 executive actions. Among these actions we can find the order to begin building the wall and the pipelines, massive deportations, federal hiring freeze, cut funding for organization that provide abortion services and more. Most of these actions require funding which currently the U.S does not have. The action signed to begin building the wall states that aside from contracting a company to begin the construction, the U.S will hire about 5,000 new border patrol agents. That is 5,000 new salaries which is only for one operation and yet he signed the action to begin the construction of the pipelines. 

Trump also signed the executive action to begin the massive deportation of immigrants. This action also states that now law enforcement officers must act as immigration officers. Therefore, if they believe that a person is illegal they have the right to stop them and ask them for their documents. However, it doesn't end there. This action also orders the Homeland Security to block any federal grants to "sanctuary cities," such as Los Angeles, which do not enforce immigration laws. 

Some of his executive actions require funding and others cut program funding. However, those that do require funding are large projects that will require funding that we currently do not have. This will then mean that our taxes will increase in order to proceed working on these projects. 

Article: http://www.pbs.org/newshour/rundown/10-executive-actions-trump-signed-far/

Student Loans, the Next Big Threat to the U.S. Economy?

This article brings an insightful view of how student loans might be impacting the economy. The article talks about how in the third quarter of 2013, the student loan debt was a massive $1 trillion, which since then till today has increased by 11.8%. The New York Federal Reserve believes that this increase in student debt can be harmful to the economy because, "People can have trouble with the student loan debt burden—unable to buy cars, unable to buy homes—and so it can really delay the cycle.” The article also had an interesting perspective on how a student loan is linked to the university a student attends and the major they are pursuing.


However, if the US department of education decreases student loans wouldn't there be a increase in the unemployment rate and the Labor Force Participation rate because there is a shortage of skilled labor which in turn can have an impact on economic growth? Could one possible way to combat the problems associated with high student debt be decreasing the cost of attending a public university?

Link:https://www.bloomberg.com/news/articles/2014-01-16/student-loans-the-next-big-threat-to-the-u-dot-s-dot-economy

20% Mexico Tariff to Pay for Trump's Wall

How Donald Trump plans to pay for his wall on the US Mexico Border has been a huge (yuge) question throughout his campaign. He previously stated that he would negotiate with Mexico, and that they would simply pay for it. Not surprisingly, Mexico was not overly willing to do so.

Today, Trump introduced a plan to place a 20% tariff on all Mexican imports to the US. The math actually works as a 20% tax on $303 B, the amount of goods the US imported from Mexico in 2015, would yield more than enough money to pay for the wall.

While this may appear to solve the problem, Americans may end up with the burden after all. These high tariffs would cause many prices to rise, as many companies have their goods assembled and processed in Mexico. Ford, GM, Walmart, and Best Buy would likely be affected. It will be very interesting to see how everything unfolds.


http://money.cnn.com/2017/01/26/news/economy/trump-mexico-tariff/index.html

President Trump’s infrastructure plans probably involve more tolls

With the inauguration of President Trump came the 100 day countdown. Largely considered the most important time in a president's term, these first 100 days in office will set the tone for the rest of his time in the White House.

While President Trump spoke a big game on the campaign trail, it was hard to nail down any exact policy plans. The same can be said for his comments regarding rebuilding infrastructure. President Trump promised to rebuild our roads, fix our bridges, and make American infrastructure great again. Yet, he was noticeably vague when asked about how he was going to go about doing this.

In a plan just released, President Trump helped clarify. Rather than spend public money, he plans to incentivize private companies to rebuild our infrastructure in an amount he hopes will reach a trillion dollars after a decade. The problem with this, however, is that there needs to be a real and tangible incentive for these private companies. There is a reason roads, highways, etc have taken on the role of a public good; because absent tolls, there is no way to make money from building a road.

Thus, it seems that President Trump is simply shifting the economic impact around, rather than eliminating it. Sure, we may not be asked to pay more in taxes so that we can rebuild infrastructure. But if it is left to the private sector, we will most likely see an increase in the amount of tolls and costs associated with using roads, public transportation, and the like.

This will be an interesting term for many reasons, but it will be especially interesting to see what role the private sector will play throughout President Trump's presidency, and if it will actually save tax payer dollars.

http://www.economist.com/blogs/gulliver/2017/01/pay-you-go

Five Potential Improvements to NAFTA

This article by Christopher Wilson outlines five elements of NAFTA the President could and should address during his eminent renegotiation of the Agreement.  Many obstacles faced by the working class (unemployment, job insecurity, etc) have been attributed in part to free trade agreements like NAFTA by the President and many other sources. Therefore, a renegotiation or possible withdrawal from the Agreement is imperative for the Trump Administration.  A complete withdrawal from NAFTA would be incredibly costly for the United States; thus, the article explores renegotiation options on a bedrock of liberalizing trade and the necessity for investment in workforce development.  

The first item on the list for improvement is a general overhaul encompassing the modern technology we use to do business; issues like transnational flows of data, as well as the exportation of digital products should be included (Wilson).  Second, the simplification of customs paperwork, and raising the threshold for the value of shipments before they face customs revisions would encourage small businesses to venture into foreign trade with Canada and Mexico (Wilson).  As technology improves, business is becoming more impersonal, this would act as a material incentive for small businesses to increase their gains from trade.  Third, the article proposes that the rules of origin for qualifying for tariff benefits to be strengthened in certain regions and industries, resulting in higher job growth and investments.  The fourth improvement the President could make to NAFTA would be the strengthening of NAFTA labor rights, maneuvering the issue into NAFTA itself instead of as a side agreement.  The North American Agreement on Labor Cooperation stipulates that North American countries should follow their own labor laws; however, the enforcement of labor rights in certain areas is lacking (Wilson).  This would incentivize companies to remain in the United States instead of moving to Mexico at the cost of workers’ rights (Wilson).  Fifth and finally, emphasis in NAFTA should be placed on eliminating obstacles to services exports; according to the article, the United States already has an advantage in the trade high skill service industries, and has maintained a surplus in this trade with Mexico (Wilson).  Overall, the renegotiation of NAFTA allows for the visible hand to make a potential improvement in the policies of our economic system in our increasingly globalized world.

http://www.forbes.com/sites/themexicoinstitute/2017/01/23/trump-to-announce-plans-for-renegotiation-of-nafta-five-ways-to-improve-the-agreement/#5cf6d9f3302b

Wilson, Christopher. "Five Ways Trump Could Improve NAFTA." Forbes. Forbes Magazine, 23 Jan. 2017. Web. 25 Jan. 2017.

Federal Policy Will Shift. Not All States Will Shift With It.

https://www.nytimes.com/2017/01/20/upshot/federal-policy-will-shift-not-all-states-will-shift-with-it.html?ref=economy

With the arrival of an unprecedented Trump presidency comes many unknowns. How will the world react? How will the markets react? How will the states react? This article explores the differing reactions states are having to Trump. For example, Gov. Jerry Brown of California has increased efforts in California to combat climate change by negotiating carbon emission reduction agreements with other states and countries in response to Trump's declared skepticism of climate change. In reaction to the threat of a Republican Congress withdrawing support of Planned Parenthood, states have increased state levies to maintain funding for the organization. Some states, such as California, are raising the marginal income tax rate to fund healthcare and other programs at risk of ending. Though the arrival of new President Trump will carry repercussions, states have always had the power to experiment and do their own thing in reaction to the federal government. Part of the United State's economic system is the separation of power between the states and the federal government. This decentralized structure of power allows for reactions to a new leader, especially now. 

To be relevant, economists need to take politics into account

This article details the importance of integrating economic models with politics or process. This allows models to be more comprehensive and predictive when it comes to explaining economics in the real-world.  Recently, the push has been to incorporate this into the American Economic Association Conference so researchers can be on the forefront of discussing and disseminating this information.  Many economist think that these political issues are often outside the scope of their research and it is not realistic to include them.

This article sheds light on some potential shortcomings of the current research pertaining to economic research that coincides closely with policy.  However, it seems that much of these issues are tremendously complex, so adding more variables to the mix may only dilute the current research.  Particularly, when it comes to macroeconomics and trying to sift out causal relationships amongst a vast system of institutions and players.  I am curious to see how economic models with a policy bent will fare in strengthening the existing research...



To be relevant, economists need to take politics into account http://www.economist.com/news/finance-and-economics/21714363-advent-trump-administration-finds-economics-profession-crisis