By Emily Stewart
Editor's note: This story was originally published in October. As Donald Trump, the Republican frontrunner, continues to gain steam in the national polls, it's worth taking another look at what the U.S. economy may look like under a President Trump.
There's no denying Trump has done a good job of making himself rich -- he's worth somewhere between $4.5 billion and $10 billion, depending who you ask . Can he make the rest of America rich, too?
Trump once again tried to make the case at last night's Republican debate on CNBC.
For a debate focused on the economy, the discussion was actually pretty economics-light, at least for Trump. His biggest moments were his earnest admission of that his winning persona could have an actual weakness , an awkward tussle over his feelings about Facebook founder Mark Zuckerberg, and his implication that he might be packing a gun . Perhaps it was CNBC's big fail on the questions ?
The billionaire did hit on some of his major campaign points, including a reduced-rate tax plan and getting corporations to bring money back into the United States. He also reiterated his promise to keep Medicare and Social Security around and untouched by creating a "really dynamic economy" and bringing jobs back from Japan, China and Mexico.
The issue of Trump's four bankruptcies , yet again, came up in conversation, and this time around, the real estate developer not only argued that Chapter 11 is par for the course in business but that it might also make him better equipped to handle America's money problems. "I came out great, but I guess I'm supposed to come out great. That's what I'm supposed to do for the country," he said. "We owe $19 trillion. Boy, am I good at solving debt problems. Nobody can solve it like me."
But perhaps Trump's biggest argument for his economic prowess came in his closing statement, when he emphasized just how artful a deal he can make. His evidence: . "In about two minutes, I renegotiated it down to two hours so we can get the hell out of here," he said. "And I'll do that with the country."
Trump has been the election's most riveting figure in the early going. He initially focused his attention on , calling for a wall to be built between Mexico and the United States and demanding the deportation of 11 million undocumented immigrants.
He has since rolled out other policies and positions: ; repeal and replace Obamacare ; renegotiate or "break" NAFTA ; stop hedge funds from " getting away with murder " on taxes; and impose import tariffs as high as 35% . All while keeping the deficit in check, growing the economy and leaving entitlement programs like Medicare and Social Security untouched.
Those who fear Trump's plans should find common cause with those who love them: "I'm not sure how much of what he actually says today will be his positions a year from now," said Michael Busler, professor of finance at Stockton University.
While Trump certainly has some grandiose ideas -- and equally lofty rhetoric to accompany them -- deciphering the exact nature of his economic policies is a complex task, according to John Hudak, a fellow in governance studies at Washington, D.C.-based think tank the Brookings Institution.
Not to mention the fact that if he does make it to the Oval Office, Trump won't have a free pass from Congress, even if it remains under the control of the Republican Party (as you'll see, many of his positions don't exactly hew closely to GOP policies).
Taking legislative hurdles out of the equation, what will the U.S. economy and markets look like if Trump becomes No. 45.
Trump's Expensive Immigration Plan
Trump's immigration plans , but they might cost the United States much more.
The American Action Forum, a right-leaning policy institute based in Washington D.C., estimates that immediately and fully enforcing current immigration law, as Trump has suggested, would cost the federal government from $400 billion to $600 billion. It would shrink the labor force by 11 million workers, reduce the real GDP by $1.6 trillion and take 20 years to complete (Trump has said he could do it in 18 months).
"It will harm the U.S. economy," said Doug Holtz-Eakin, president of the American Action Forum and chief economic policy adviser to Sen. John McCain's 2008 presidential campaign. "Immigration is an enormous source of economic vitality."
The impact would be felt on both supply and demand.
A number of industries that depend heavily on cheap immigrant labor would be devastated -- especially agriculture. "There would be an abrupt drop in farm income and a sharp rise in food prices," said John McLaren, professor of economics at the University of Virginia with expertise in international trade, economic development and the political economy.
Companies that sell to the immigrant population would be affected as well, leading to decreased revenues for local businesses and a loss of American jobs.
"Immigrants, whether they are legal or illegal, always spend a portion of their earnings in the location where they have their jobs," McLaren said. "And in a lot of our urban centers, this is actually an important part of the economy."
He pointed to the case of Postville, Iowa , where in 2008 U.S. Immigration and Customs Enforcement (ICE) raided a slaughterhouse and meat packing plant, detaining 389 undocumented workers (and jailing 300 of them). The raid caused most of the more than 1,000 immigrants not caught to leave the town of 2,300, devastating the local economy in the process.
He also noted his own research , which suggests each immigrant creates 1.2 local jobs for local workers, most of which go to U.S. natives. "Obviously, those jobs would disappear if the undocumented were just yanked away," he said.
Trump has also discussed reducing the number of jobs held by legal immigrants, namely by increasing the prevailing wage requirements for H-1B visas (visas that allow U.S. employers to recruit and employ foreign professionals). The Republican contender's thesis is that doing so would force companies to give jobs to domestic employees instead of overseas workers. The maneuver would benefit some, but not most.
"If I'm an American software programmer, I probably would benefit somewhat from making it harder for highly-skilled software programmers from elsewhere," McClaren said. "It's really hard to argue that the country, as a whole, benefits from that. It would be bad for most Americans, and it certainly would be bad for corporations."
An extreme anti-immigration policy could also cause collateral damage to the American image. "What's the American brand after we've rounded up 11 million people and sent them packing?" said Jim Pethokoukis, a columnist and blogger at the American Enterprise Institute, a center-right think tank based on Washington, D.C. "Do people still view America the same way?"
Tax Cuts for Everyone, and Deficits, Too
, unveiled in September, is perhaps the most detailed proposal he has put forth yet. It essentially entails implementing tax cuts across the board and literally sets forth a scenario in which the lowest earners get to send a form to the IRS reading, "I win."
"His tax plan is one of the most dynamic and pro-growth tax plans out there," said Merrill Matthews, resident scholar at the Institute for Policy Innovation, a Texas-based, right-leaning think tank. "You would find a huge amount of new business investment and companies willing to put their money out there to begin growing the economy."
But there's a catch: Trump's tax plan would reduce revenue enormously, and the federal budget deficit would almost inevitably skyrocket.
Nonpartisan tax research group the Tax Foundation calculates that Trump's plan would cut taxes by $11.98 trillion over the course of a decade. It would lead to 11% growth in the GDP, 6.5% higher wages and 29% larger capital stock as well as 5.3 million jobs. However, it would also reduce tax revenues by $10.14 trillion, even when accounting for economic growth from increases in the supply of labor and capital.
"That tax cut would produce faster economic growth and a bigger economy -- as long as you pay zero attention to the fact that it would dramatically increase the deficit and budget debt," said Pethokoukis.
Trump has promised to reduce spending, though he hasn't explicitly said how. Moreover, he has said he will maintain entitlement programs like Social Security and Medicare, two of the costliest parts of the federal budget.
"It reduces federal revenue by maybe a quarter. You can construct the United States at 75% revenue, but you have to have a plan for how you'd get there," said Alan Cole, an economist with the Center for Federal Tax Policy at the Tax Foundation, a non-partisan research think tank, based in Washington, D.C. "If there weren't any spending cuts that materialized, you would see the deficit widen substantially the moment the plan was enacted."
In the face of such an enormous deficit, creditors might begin demanding higher interest rates on U.S. bonds, and the markets would be spooked.
"I can't imagine markets would react well to it. I can't imagine global investors looking to relocate will look on a United States that is driving deliberately over a fiscal cliff," said Holtz-Eakin. "Sending the U.S. into a debt spiral where you're borrowing interest on previous borrowing will generate a market reaction that will be far from benign and that will, I think, in the end overwhelm the beneficial effects."
Of course, just because Trump hasn't yet explained how he will cut spending doesn't mean he won't. "It's not unusual for a politician to say, 'I'm going to cut spending,' and not give specifics," Matthews said.
Unclear on Health Care
In his 2000 book, The America We Deserve, Trump universal health care and laid out an ideology on the subject that, frankly, looks pretty un-Republican. He hasn't exactly been shouting for health care for all in his presidential campaign, but he has said he still wants to " take care of everyone ."
Trump has not yet put forth a specific plan on health care, but his stance is at least somewhat clear: repeal the Affordable Care Act (Obamacare) and replace it with something else. As for that something else, it's not entirely clear, but he has said it would be " terrific ," entail a lot of deal-making, and allow for the purchase of health insurance across state lines.
"I don't think [Trump's health care proposal] is based on economic analysis, I think it's based on channeling a populist dislike of insurance executives," said Roger Feldman, professor of health policy and management at the University of Minnesota. "If he really tried to do the things he said he would do the insurance industry would be in the crosshairs."
The ability for consumers to buy their health insurance in other states is perhaps Trump's most carefully thought-out proposal in the health care arena. The idea is not new -- such a bill was introduced in Congress a decade ago -- but it is impactful.
"I think it could be a potentially significant improvement in insurance," Feldman, who in 2011 co-authored a paper on consumer response to a national marketplace for individual health insurance, said. "It would do that by allowing people to buy insurance in states with fewer regulations, and that would, in turn, cause a restructuring of the health insurance industry."
Based on a pre-Obamacare baseline, Feldman and other researchers concluded such a system would result in seven million more people being insured by opening up the insurance markets to more competition.
Of course, not everyone agrees.
"It doesn't actually achieve you much," said Matthews, pointing out that a policy in another state may not translate to access to the network of physicians and pre-negotiated prices locally-purchased policies often afford. "It's not a bad idea, but it is no panacea."
Too Tough on Trade?
Trump likes to talk trade. And while has said he is a "free trader," he has also clarified he doesn't like the deals the U.S. has done, such as NAFTA and the . The Art of the Deal author has promised to negotiate better agreements.
"One of the things that's often lost is that [Trump] has a strong business background, he understands how commerce works," Hudak said. "He has more business training than any American president we've ever had."
But the ramifications of some of Trump's proposals might be less than ideal.
Take China, . He has proposed negotiating with the country to prevent it from manipulating its currency and keeping it too low for American manufacturers -- and workers -- from competing.
"The reality is that when China devalues its currency, the goods that they produce become cheaper, and as a result, while we may lose some manufacturing jobs, the rest of the population gets to buy things a lot cheaper than they would if the products were made [in the U.S.]," said Busler. "The jobs he would bring back are yesterday's jobs."
Trump has also pinpointed imposing tariffs on imported goods, for example, suggesting a 35% tax on automakers that manufacture cars in Mexico. Such a maneuver might bring jobs back stateside, but it might not. Instead, it could just mean people paying more for what they're buying.
"If he puts 35% taxes on products, the manufacturing will still not come back to the U.S., and all it will mean is U.S. consumers have to pay 35% more for the products that are made outside the country," said Busler.
"American consumers would end up paying more for things, and that hurts the economy if you're putting tariffs on those other things," said Matthews.
The Trump Effect
Trump's brand has contributed an enormous amount to his net worth -- he says more than $3 billion . But how will that Trumpiness translate to the White House? Perhaps not well.
"That off-the-cuff, gruff, tell-it-like-it-is approach that Donald Trump has may be great for headlines and a stadium full for supporters, but what unguarded comments like that from a president do is make dramatic fluctuations in the world economy, in stock markets in the United States and in the world," said Hudak. "Think about how much the market reaction is to the choice of two or three words from the Federal Reserve chairman."
The words chosen by American officials can have serious economic repercussions, and the country -- and the world -- have equally high expectations for their commercial and diplomatic capabilities. The blunt way of speaking that has made Trump so popular among Republican voters could be detrimental once he's in the Oval Office.
"His brand of rhetoric would actually make for profound economic instability," Hudak said. In an October interview with The Hill , Trump warned of a looming recession and stock market bubble and targeted Federal Reserve Chairwoman Janet Yellen in his comments. "She's keeping the economy going, barely," he said. Such comments coming from a presidential candidate are one thing -- coming from the president of the United States they would be another.
But Trump is a smart guy, and may be able to adjust. Matthews pointed to the Clinton administration, which took a few months to settle in.
"You wonder if the Trump administration would be the same until they got things under control, or got him under control," he said.
Not everyone agrees.
"I think Donald Trump is good for the Republican Party, and I think he's good for the country," Busler said. "Donald Trump is not afraid to face the public and raise his voice, even if it is politically unpopular."