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View Full Version : Trump supporters: are you looking forward to a recession?



Norman Bernstein
06-29-2016, 04:02 PM
It appears that Moody's Analytical is now among the economic forecasting concerns who think that Trump's stated economic policies would invite a catastrophe:


Donald Trump’s economic policies are so bad that they would produce the longest U.S. recession since the Great Depression, a report from economists at Moody’s Analytics found last week.

Assume, as the economists did, that Trump could implement his key economic policies — tax cuts skewed heavily to the one percent, mass deportation of illegal immigrants, and huge tariffs on imports from China and Mexico — during his first two years as president.

The result: the U.S. will go into recession at the start of 2018 and not emerge until 2020. Instead of 6 million new jobs being created, 3.4 million Americans would lose their jobs. Gross domestic product will fall by 2.4 percent. That’s a longer, though less severe, downturn than the Great Recession (which officially began in December 2007 and ended in June 2009).

The Moody’s economists summed up their warning:


Even allowing for some variability in the accuracy of the economic modeling and underlying assumptions that drive the analysis, four basic conclusions regarding the impact of Mr. Trump’s economic proposals can be reached: 1) they will result in a less global U.S. economy; 2) they will lead to larger government deficits and more debt; 3) they will largely benefit very high-income households; and 4) they will result in a weaker U.S. economy, with fewer jobs and higher unemployment.


http://img.huffingtonpost.com/asset/scalefit_630_noupscale/577145041500002a0073cc24.png


BUREAU OF ECONOMIC ANALYSIS, MOODY’S


To reach that conclusion, the economists took Trump’s stated policies and plugged them into their model for the U.S. economy. They noted that their model is similar to the ones used by the Federal Reserve and the Congressional Budget Office.

Of course, as The New York Times’ Neil Irwin points out (http://www.nytimes.com/2016/06/22/upshot/would-a-trump-presidency-mean-economic-disaster-lets-take-a-look.html?_r=0), forecasting with precision is very hard, and so the Moody’s report is more useful to understand the broad economic trends that would be at work in a Trump presidency. Those trends are really bad.

First, Trump’s huge tax cuts, of which one-third would go to the top one percent, would fail to durably stimulate the economy, and the U.S. national debt would balloon. Debt is not necessarily bad. It can, in fact, be a good thing when it’s paying for investments that help grow the economy. But Trump’s tax cutting binge wouldn’t do that. It would instead send debt to record levels for no greater long-term purpose than to tilt the tax code even further in the favor of the rich.

Second, Trump’s vow to get tough on trade — by, for instance, putting a 45 percent tariff on Chinese imports — would raise consumer prices 3 percent. American businesses would be left struggling to find alternative sources of goods, while China raised its own tariffs in response. Not a good scene at all.

Third, there’s the presumptive GOP nominee’s pledge to deport all 11 million undocumented immigrants. Undocumented workers, Moody’s points out, make up 5 percent of the U.S. workforce. So Trump’s plan is the equivalent of ripping all the workers in North and South Carolina, and then some more, out of the economy, and telling yourself this will have no ripple effects on businesses or local communities.

Trump’s campaign hit back in a statement last week (http://www.bloomberg.com/politics/trackers/2016-06-21/trump-campaign-moody-s-zandi-obama-adviser-and-clinton-donor) by pointing out that the lead author of the Moody’s report, Mark Zandi, is a Democrat and a donor to Hillary Clinton. That’s true, but it’s no substantive response to the economists’ predictions. The attack also failed to mention that Zandi served as an economic advisor to 2008 GOP presidential nominee John McCain.

Trump economic adviser Peter Navarro was more on point (http://money.cnn.com/2016/06/27/news/economy/donald-trump-economy/index.html?sr=twmoney062716donald-trump-economy0303PMVODtopLink&linkId=25955248) in a CNN interview. The University of California, Irvine, professor said that the candidate’s policies wouldn’t cause a recession because tax cuts mean growth and American workers would fill the (often poorly paid) jobs left vacant by deported immigrants.

Trump won’t start a trade war with China, Navarro said, because China won’t even fight back. When that nation realizes it “no longer [has] a weak leader in the White House, China ceases its unfair trade practices,” Navarro said.

Or as Trump put it last year (http://www.realclearpolitics.com/video/2015/09/09/trump_we_will_have_so_much_winning_if_i_get_electe d_that_you_may_get_bored_with_winning.html), “We will have so much winning if I get elected that you may get bored with the winning.”

Chris Smith porter maine
06-29-2016, 05:44 PM
But But But he is going to make America Great again.

Canoeyawl
06-29-2016, 06:03 PM
I see no reason to think it wouldn't. Just look what the last republican administration did to the economy. Of course trump may not be able to just start another war to cover it up. He would have to have a well thought out plan ready to go.
(Well, there is North Korea, but he is a friend to Trump, so maybe not.)

Gerarddm
06-29-2016, 06:23 PM
Let me be cynical and question whether the typical Drumpf voter could even understand that graph. Remember, as he bragged, he could shoot somebody in the middle of Fifth Ave in NYC and his voters wouldn't care.

What Norman Mailer called The Wad.

Paul Pless
06-29-2016, 06:27 PM
But But But he is going to make America Great again.

I sorta miss bobby s

Wooden Boat Fittings
06-29-2016, 07:33 PM
No, no problem with Donald causing a recession. He's going to take the US out of the EU.....

Story here (http://www.theshovel.com.au/2016/06/30/trump-calls-for-us-to-exit-eu-too/).

Mike

mdh
06-29-2016, 07:59 PM
No. They're using their computer models again. They're unreliable; you remember, the same calculations that said a bumblebee can't fly. Honestly, i think the computer has hindered as much as it has helped.