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Economist Mark Zandi On Why Tax Cuts Are Not A 'Game-Changer,' Rising Deficits, And Why He Is Not A 'Fan' Of President Trump’s Economic Policies

Steven Burke

Has all the political divisiveness had an impact on the economy?

I think it has, but probably more so back earlier in the expansion. Hard to remember back, but in 2012, 2013 and 2014 there were a lot of bitter budget battles. We had the fiscal cliff. We had a couple of government shutdowns. There was brinkmanship over the debt ceiling. What is going on now is not nearly an issue as it was literally back then.

The divisiveness is not new. We have been dealing with this now really since the recession. It is definitely not a plus. But at this point, I am not sure it is that much of a negative. Certainly not as much of a negative as it was just a few years ago.

Are you optimistic or pessimistic as you look out many years?

I am optimistic. We have significant core fundamental strengths. We tend to forget that. We have the rule of law. I do business all over the world and I see it. The United States has rules and we follow them. And if people break the rules or disagree about the rules we have, we have an adjudication process that everyone trusts. That is a core fundamental strength.

I think we have the best assets. Our universities are a gem. They are the best in the world and we attract the best and the brightest from all over the world to come here—just as long as we remain open and don't close our doors and make it more difficult for people to come. We get the best. They come here. They start companies. They innovate and create wealth. That is a tremendous advantage. Even simple things like the English language. It is an easy language. Everyone speaks it all around the world. I do business everywhere on the planet and it is in English. The Chinese will have a very difficult time supplanting the United States just because of that simple fact. It is very difficult to speak Mandarin.

How strong are our political institutions?

I do feel those are being challenged right now. We do have strong political institutions. I think they ultimately will hold. People have historically trusted those political institutions: a free media, a court system, the Congress. We moan about the Congress but at the end of the day they do get things done. I don't think people realize how much they actually do.

 
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