With the upcoming presidential election just a few months away and the first debate set for June 27, discussions and tensions surrounding the leading candidates – Joe Biden and Donald Trump – are beginning to intensify.
Considering the current state of inflation, interest rates, and stock market volatility it’s no surprise that the economy is in sharp focus. While Republicans often tout their acumen – with some of Trump’s popularity stemming from his billionaire status – prominent economists to favor Joe Biden.
A noteworthy event occurred late on June 25 when a letter signed by 16 Nobel Prize-winning economists was unveiled. The letter urged for second term the Democratic candidate.
Why are economists warning against a Trump presidency? Experts agree that Trump’s economic plans are significantly inferior and potentially lead to an inflation surge. The Republican candidate is expected to extend tax cuts permanently while also increasing tariffs. Pressuring the Fed to lower interest coupled with additional cash from tax policies may lead to inflation spiking yet again.
Furthermore, Trump’s tariff proposals have been criticized they could result in a stronger U.S. dollar – contrary to his intentions considering USD already risen significantly under Biden’s administration. Additionally, these tariffs could adversely impact companies heavily reliant on foreign imports, particularly those the technology sector.
It is pertinent to recognize that under a potential Trump presidency, China could face tariffs ranging from 60-100%. Since China is a major exporter of various minerals crucial for big tech firms – this move may impede such companies’ operations significantly.
Analyzing historical data reveals that another term under President Donald Trump might escalate national debt levels further despite Republicans being known for fiscal responsibility. On average, Republicans have borrowed more than Democrats; thus continuing tax cuts might exacerbate national debt accumulation during his administration.
Contrastingly,
research focusing on U.S. national debt increase following the 2008 crisis suggests that over his first three years in office,
Biden
has increased
the burden by similar levels as seen throughout
Trump’s entire first termFinally,
concerns expressed by Nobel Prize-winning economists along with historical records cast doubt on stock market performance prospects under President Donald Trump given its historical performance trends under Democratic presidents.
