Posen: Trump Infrastructure Needs 1% of GDP Per Year

The transcript discusses the potential impacts of Trump's economic policies, known as Trumponomics, focusing on infrastructure investment and tax reform. It highlights the importance of fiscal policy and its effects on markets and trade deficits, drawing parallels with past administrations. The challenges of managing the budget under Trump's administration are explored, along with strategies for job creation and economic growth. The discussion also covers corporate tax reform and ways to encourage investment.

What is the main concern if Trump's policies focus on glamorous infrastructure projects and open-ended tax cuts?

• Higher economic growth

• Improved trade balance

• A real budget problem with no tangible benefits

• Increased job creation

According to the discussion, what happens if a government runs an excessively loose fiscal policy?

• It will have no impact on the economy

• The bond market will penalize it

• It will lead to a trade surplus

• The bond market will reward it

What is a potential issue with Speaker Ryan's fiscal agenda under Trumponomics?

• It has unanimous support from both parties

• It focuses solely on tax increases

• It may lead to increased deficits despite Medicare cuts

• It aligns perfectly with Trump's spending plans

How much of GDP in real infrastructure spending is suggested to be necessary for job creation?

• 0.5% of GDP

• 1% of GDP

• 3% of GDP

• 2% of GDP

What is a key factor in ensuring that infrastructure spending leads to future job growth?

• Reducing corporate taxes

• Increasing trade deficits

• Building up human capital and infrastructure

• Spending on tax cuts

What is one strategy mentioned to encourage CEOs to invest in job creation?

• Offering tax holidays without any conditions

• Repatriating profits with meaningful tax reform

• Increasing corporate tax rates

• Focusing solely on share buybacks

What is the argument for infrastructure investment according to Larry Summers?

• It has no impact on business confidence

• It can crowd in investment and boost economic confidence

• It should be avoided to reduce deficits

• It is only beneficial in the short term