The economy would grow even stronger and create more dividends for low- and middle-income households in a Hillary Clinton administration than it would on its current track and far more than under a Donald Trump administration, according to a new analysis from Moody’s Analytics. And they found that the Clinton economy would benefit in particular from uncommon policies like paid family leave and universal preschool.
The independent firm ran the numbers on a variety of proposals that Democratic nominee Clinton has put forward, and it concluded that her plans would boost GDP growth and create more jobs, increase incomes particularly at the middle and bottom of the income scale, and would not end up being costly or significantly increasing the deficit.
Moody’s looked at what would happen if her plans were fully or partially implemented through the year 2026. Some of it is standard fare: it found that her proposals to spend government resources on infrastructure would stimulate the economy and that financing the spending by levying more taxes on the wealthy would not have a significant economic impact. It also warned of a minimal negative effect on jobs stemming from her call for a higher minimum wage (although there is good evidence that the economy can swallow minimum wage increases without significant job losses).
But the economy would also benefit greatly, according to Moody’s, from more unique aspects of Clinton’s agenda. Long-term growth would be particularly fueled by expanding the country’s workforce and giving people access to better education and skills. That would be accomplished in large part through a national guarantee of paid family leave — which has been shown to keep people in the labor force — and investments in expanding preschool to all four-year-olds and making college more affordable. Moody’s also notes that immigration reform would be a significant factor for increasing the workforce and thus boosting productivity.More ...