Trump deportation policies will drag on GDP: Economist

President-elect Donald Trump is set to serve his second term in the White House in January, with plans to employ immigration reform through mass deportations. The Hamilton Project director and Brookings Institution senior fellow in economic studies, Wendy Edelberg, joins Seana Smith and Madison Mills on Catalysts to examine the impact of Trump’s proposed deportations “Economies generally don’t do well with abrupt changes, and this would be no different,” Edelberg says, noting that if Trump “tried as hard as he could under current law without Congress’s help to do mass deportations, we’d see potentially hundreds of thousands of people being involuntarily deported next year and that, along with a bunch of other economic effects and changes in the labor force that would come alongside those deportations, would mean less GDP [Gross Domestic Product] growth next year to the tune of as much as a half a percentage point.” The economist says the decline in GDP “comes not just from [the] less economic output because we [the US] would simply have fewer workers in the economy, but a lot less consumer spending and businesses responding to that reduction in consumer spending.” Edelberg believes Trump’s odds of pulling off the level of deportations he promised on the 2024 campaign trail to be “implausible… even with the aid of congressional action…” “If he took the kinds of actions that he’s promised to take and that state and local officials across the country look quite amenable to [them], we could see maybe 450,000 people being deported next year… [And] I think we would see several hundred thousand more people voluntarily leaving. We would make this country a pretty unpleasant place to be.” The economist says Trump’s proposed immigration policies would stall job growth, impact wages, reduce activities in some sectors, and raise prices for consumers. To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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