How would a Clinton win in November affect the U.S. economy?
Hillary Clinton made a case to Americans in her Thursday speech at the Democratic National Convention about why they should elect her in November, touching on her economic plans for infrastructure investment and providing debt-free college educations.
So how would those plans play out in the U.S. economy over the next decade? Her blueprint would lead to a "somewhat stronger" economy, with real gross domestic product rising 1.7 percent and 3.2 million new jobs created by the end of her term, according to an analysis from Moody's Analytics. The main beneficiaries would be Americans of modest means, thanks to a stronger economy and more government assistance, wrote chief economist Mark Zandi in the report.
Moody's analysis of Clinton's economic plan follows its bleak take on her Republican rival's policies, with Zandi saying in a June report that Donald Trump's proposals would lead to a "lengthy recession," resulting in a loss of 3.5 million jobs and raising the nation's unemployment rate as high as 7 percent.
Moody's Trump analysis has drawn some criticism because Zandi was a supporter of President Barack Obama's 2009 stimulus package and has donated to the Clinton campaign. The firm's analysis of Clinton's economic proposals was also worked on by two other economists and is based on Moody's model of the U.S. economy.
"During Secretary Clinton's presidency, the average American household's real after-tax income would increase by about $2,000, almost $300 more than under current law," the report concluded. "Those who would benefit most from Secretary Clinton's economic proposals would be low- and middle-income households. Their tax bill is the same as it is today, but they are the beneficiaries of increased government assistance and a larger economy. High-income households pay much more in taxes under Secretary Clinton's policies."
Households with more than $300,000 in income and up to $750,000 would see their taxes increase by less than $3,000, the analysis found. Those making more than $750,000 annually, or those in the top 1 percent of the income distribution, would pay about $78,000 more in taxes.
Clinton's economic platform would also create a "modest increase" in the federal budget deficit, although the policies would be almost deficit neutral if she didn't have a proposal to eliminate the so-called sequester, Moody's said. It pegged the cost of eliminating the sequester -- automatic federal spending cuts required under a 2011 budget deal -- at $560 billion over 10 years.
Trump has won support from Americans who have been struggling to gain a foothold in the recovery, especially among white voters without a college degree. In the post-recession economy, the bulk of new jobs -- especially high-paying, stable jobs -- have gone to workers with college degrees. Less educated workers have suffered from wage stagnation or are getting pushed into lower-paying jobs.
According to Moody's analysis, Trump's supporters may not see the gains they are hoping to enjoy if he is elected president. Most of his tax cuts would benefit the rich, while low and middle-income Americans would see a decline in wealth because of lower stock prices and housing values, Moody's said.
There are gaps in Clinton's plans, Moody's. a unit of the credit rating firm, pointed out. Her campaign hasn't outlined much about corporate tax reform, while her views on global trade "have been muddied by her intensifying opposition to the Trans Pacific Partnership," it noted.
"Nonetheless, the upshot of our analysis is that Secretary Clinton's economic policies when taken together will result in a stronger U.S. economy under almost any scenario," the research firm concluded.