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A Brexit Negotiated by Trump Would Have Been a Wild Ride

January 8, 2019 in Economics

By Ryan Bourne

Ryan Bourne

How would Donald Trump have approached negotiating Brexit?

A few months ago, several commentators mused over this exact
question.

The current game of chicken between the President and Democrats
in Congress, resulting in a partial US government shutdown, is
perhaps the best insight we’ll get.

And it shows the wild ride that a Prime Minister Trump would
have taken us on.

May — or whoever
comes after her — should be wary of following the lead of the
US President.

Unlike Theresa May, when Trump implies “no deal is better
than a bad deal,” he appears to mean it. The President is
still refusing to sign legislation to fund parts of the government
unless Democrats grant $5.6bn for his desired concrete border wall
with Mexico.

As a result, the shutdown now runs into its third week.

There has been some talk of eventual compromise, trading off
wall funding for protections for immigrants. But the President has
taken a resolute public position, claiming that he’d keep the
government shut for “months, maybe even years” to
deliver the wall.

His team teased commentators last weekend with talk of taking
the concrete wall off the table, only to clarify that they’d
be willing to settle for a steel structure instead.

Should the stalemate continue, Trump has even threatened to
declare a national emergency, using military funds to push ahead
with the project.

My Cato colleagues David Bier and Alex Nowrasteh have ably
demonstrated that such a wall would be costly and ineffective.
There are good reasons for the Democrats to oppose it as a matter
of principle, and they are right to dig in.

But for Trump, this is a rare matter of high principle as well:
meeting an important 2016 campaign promise. “Wall means
wall,” some might say (even if he did claim that Mexico would
pay for it.)

The partial closure may only affect a quarter of government
spending, but that still means that 800,000 employees are impacted,
most of whom are currently sat at home without pay. Having so many
people suddenly finding themselves unclear of when they are about
to be paid is going to delay consumption decisions.

Just one in eight workers employed by America’s tax
collection agency (the Inland Revenue Service) are currently
working too, meaning that taxpayers and businesses won’t be
getting answers to questions that could determine important
financial decisions.

Then there’s the role that (sadly) the government plays in
facilitating other economic decisions.

The Small Business Administration and the Department of Housing
and Urban Development are affected by the closures, and these dish
out a bunch of loans and grants, applications for which are
currently in limbo.

As a result, even …read more

Source: OP-EDS

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