We're now only a few days out from the US presidential election, and the race is as tight as ever.

While the polls have it as a toss-up, the bookies currently have Trump as the slight favour, and this is despite the fact that he's proposed probably the most unorthodox economic policy platform in modern American history.

So in this video, we thought we'd take another look at Trump's wild economic policies, and how they'd actually affect the American economy.

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So, before we get into it, a couple of caveats.

First, we've done videos on both Harris and Trump's economic platforms in the past, but we thought we'd do an update on Trump because he's ditched some of his old policies and picked up some new ones, including getting Elon Musk to cut $2 trillion off the federal budget.

Secondly, it's worth saying that we're going off what Trump has said he would do.

In reality, it's at least possible that he ditches his more extreme policies once in office, or that Congress might block some of them.

Anyway, let's start by taking a look at Trump's economic platform.

Leaving aside his funky monetary policies, which Trump has sort of stopped talking about recently, Trump's economic policies can broadly be lumped into two buckets.

More tariffs and less taxes.

Let's start with more tariffs.

Now, Trump loves tariffs, apparently because he thinks that they help to protect American manufacturers and reduce America's bilateral trade deficits.

Accordingly, Trump has proposed a flat tariff on literally all imports coming into the US.

Most of the time, Trump says that this will be set at 10%.

But more recently, he's suggested maybe bringing it up to 20%.

And at a recent speech at the Economic Club of Chicago, he even suggested it could go to 50%.

Trump has also proposed a steeper flat tariff on Chinese imports.

The precise rate for that tariff is unclear.

Trump has said at various points that it will be 50, 60, or even higher than 60%.

Trump has also said that he wants to expand Biden's new tariffs on Chinese imports related to the energy transition.

For instance, he wants to double the current tariff rate on Chinese EVs from 100% to 200%.

Let's move on to the less taxes half of this though.

Trump likes less taxes, both because he thinks that low taxes stimulate economic growth, and because they're popular.

Specifically, Trump has said that he wants to extend the 2017 Tax Cuts and Jobs Act, which is due to expire at the end of 2025.

And he's also floated reducing corporation tax to either 20 or 15%, having cut it from 35% to 21% in his first term.

Trump has even suggested scrapping income tax entirely, and essentially replacing it with super high tariffs, an idea that he first floated in a meeting with Congressional Republicans a few months ago, but one that he's become increasingly keen on since, even repeating it on Joe Rogan recently.

So what would all of this actually mean for the American economy?

Well, there would be at least three big consequences.

More inequality, more inflation, and more debt.

Before we get into it, we should stress that this really isn't intended as an anti-Trump video.

And as we said in the intro, it's possible, if not likely, that he ends up pursuing more old school Republican policies once he gets into office.

Nonetheless, there's a strong consensus that at least in the short term, Trump's stated policies would increase inequality, inflation, and the national debt.

So let's start with inequality.

Trump's tax cuts would increase inequality for two reasons.

First, his income tax cuts directly benefit the highest earners, with those earning over $800,000 a year benefiting most.

And second, his corporate tax cuts would also benefit the wealthiest.

While Trump claimed in 2016 that his corporate tax cuts would trickle down to workers, in the form of higher wages, and trickle down to consumers, in the form of lower prices, neither of these things actually happened.

Academic work in the aftermath of those cuts found that most of the benefits actually went to corporate executives instead.

Anyway, let's move on to the second impact, more inflation.

Trump's economic policies would increase inflation for two reasons.

Firstly, tax cuts mean more disposable income, so more spending, which puts upward pressure on prices.

And second, tariffs make goods more expensive.

Because you either have to pay the tariff when you import goods, or you have to buy an equivalent good that's made in America, which will probably be more expensive.

The Non-Partisan Peterson Institute for International Economics, for instance, estimates that Trump's policies would push inflation up by somewhere between four and seven percentage points above what it would be otherwise, depending on the severity of the tariffs and other countries' responses.

Now, we should say that while tariffs would almost definitely increase inflation in the short term, the long term effects are harder to forecast.

Pro-free trade economists would say that tariff-driven protectionism will result in permanently higher prices, because America will never be able to manufacture everything as efficiently as the rest of the world can.

Conversely, more protectionist-minded economists would argue that while prices would go up a bit in the short term while the economy adapts, America would eventually be able to manufacture everything at least nearly as efficiently as the rest of the world, bringing down those prices.

On top of that, this reshoring of manufacturing will apparently create loads of great, well-paid jobs, which means that many Americans would ultimately be better off.

Anyway, the final consequence of Trump's economic plans is more debt.

America is already running a pretty large deficit on top of a pretty massive debt pile, and Trump's tax cuts would only make that worse.

Especially if Trump tries to ditch income tax entirely, because replacing income tax with tariffs would almost definitely be impossible.

In 2023, the total value of American imports was about $3 trillion, while the total value of income taxes was about $2 trillion, which means that Trump would need at least a 67% average tariff on all imports to replace income But this wouldn't work either, because as the tariff rate rises, the value and quantity of imports would fall.

Again, analysis by the Nonpartisan Committee for Responsible Federal Budget from late October found that Trump's policies would increase the debt by nearly $8 trillion through 2035, according to their central estimate.

And that's nearly double the fiscal impact of Harris' proposed policies.

This is a massive number, and in practice would mean pushing the annual deficit from a bit over 6% of GDP, or nearly $2 trillion where it currently sits, to nearly 10% of GDP, or about $3 trillion.

The big caveat worth mentioning here is that Trump said that Elon Musk would run a new Department of Government Efficiency, which would be responsible for trimming down the federal government.

Musk has claimed that he'd be able to cut $2 trillion off the roughly $7 trillion annual But that wouldn't be easy.

It would almost definitely require steep cuts to defence spending or benefit programs like social security.

And history is riddled with politicians claiming that they'd cut the fat off government bureaucracy, only to realise that once they got into office, it's not a politically easy thing to do.

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