OUTSIDE VIEW
Despite Davos enthusiasm, there will be a bill for Trump's tax cut
Have criticisms of Donald Trump's economic policy gone too far? Whisper it quietly, but 12 months after the beginning of the Trump presidency, several economists and business leaders appear willing to give Trump and his tax reform a chance. It may be down to the stock market highs, or perhaps to the announcements by companies such as Apple that they are willing to invest in the US and pay workers higher wages. Still, the apocalyptic fears that accompanied Trump's arrival at the White House could not seem farther away. The danger is that this early revisionism will go too far. The US economy has the winds of the global recovery in its sails. The tax reform has encouraged talk of investment and a pick-up in growth, but it is far too early to quantify the effects. Yet the dangers are all too clear: the US is boosting demand when the recovery is mature. The risk is that such a sugar rush will push up the deficit, public debt and inflation will rise, while having only a modest impact on ...
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