Lehigh Valley

Local experts react to Trump's speech, provide economic analysis

Economic issues played a central role in President Trump's State of the Union address Tuesday night.

"Over the last year we have made incredible progress and achieved extraordinary success," said President Trump, while laying out a laundry list of positive economic statistics.

The adjectives are Trump's, but the growth has been real.

"Clearly there has been an extension and acceleration of the recovery after the economic recession in 2007 and 2008," said Dr. James West, economics professor at Moravian College.

Joe Blake, an adjunct instructor of finance at Lafayette College, agreed.  

"Is it all down to him? No, there was a certain momentum that began under Obama. And we certainly accelerated," Blake said.

Both West and Blake told WFMZ they believe tax cuts and deregulation will continue to produce growth.

Next issue: the stock market.

"The stock market has smashed one record after another," said Trump on Tuesday night.

That is true, but is the growth sustainable?

"Little wary that there will be corrections in the model. But clearly there seems to be reason for belief in sustained growth," said West.

While Blake again attributed some of the stock market growth to the Obama years, he also gave credit to President Trump.

"I think it has a certain momentum that'll keep it going for the next year or two," he said.

Another prominent issue discussed in the speech was trade.

According to Trump, the era of "economic surrender" is over.

"From now on we expect trading relationships to be fair," he said.

West worries Trump's recent tariffs could ultimately lead to retaliation or even a trade war.

"On the other hand, it's clear that there are some trade issues," West told WFMZ. "In this case, we do have some evidence that there has been some unfair trade practices."

Blake was blunter about Trump and trade.

"I think he's overly protectionist. I think a lot of things he says about trade pander to people. Appeal to their fears," he said. "I don't think he really understands or cares to understand the role of trade in today's world."

On the subject of infrastructure, Trump said he wants massive spending.

"At least $1.5 trillion for the new infrastructure that our country so desperately needs," said the president.

"Clearly to move the economy into greater areas of growth," said West, "we need new infrastructure."

Blake agreed, with a caveat.

"It's a good idea," he said. "Question: how are you gonna pay for it? He didn't talk about that."

Trump only said in the speech that state, local and private investment in infrastructure should be included.

Continuing his point about spending, Blake expressed deep concern over programs like Social Security and Medicare, and what they mean for America's debt of more than 20 trillion dollars.

"If you're really concerned about the deficits, from a structural point of view, long-term entitlements have to be on the table," he said.

In the speech, Trump described no proposals to cut spending, reform entitlements, or address the debt.

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