The announcements of the new president-elect continue: the new administration will have Elon Musk and Vivek Ramaswamy as co-heads of the Department Of Government Efficiency (DOGE). The goal? Boost growth by eliminating unnecessary regulations. What is the economic impact of deregulation? Although it appears to be an extreme guessing exercise, the Harvard report on the link (https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/working.papers/AWP_148_final.pdf) reviews different studies on the issue and summarizes the results on the table below. In the friendliest environment scenario, where regulations are reduced to its minimum expression, the U.S. economy could receive a boost of 2.2% on its GDP growth, which if true, combined with a potential pickup in inflation could be enough to reduce the deficit and the debt to gdp in a meaningful way. And that doesn’t take into account the potential impact from AI. Proponents of regulations argue they exist to protect consumers, and critics argue that they have accumulated so much burden they not only don’t protect the consumer, but actually harms them. We’ll see.
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