In 2020, President Trump’s advisors gave us “fifteen days to stop the spread.” Now, they’re giving us tariffs to realign the American economy and make it great again.
I don't know if this has been said because I haven't read all the comments, but I believe Trump is looking long term - beyond the 2026 mid-terms. Trump is not only trying to reorder the American economy from being a government-centric economy to a private sector-centric economy, but the world economy. I think he and Bessner have also said it.
There is going to be rocky period with this reset. The tariff reorientation, bringing Russia back into the world's economy, stopping the war in the Middle East as well as containing China.
In my opinion, Trump doesn't care about what happens in the 2026 mid-terms, he has only one term. As Erick has pointed out there will be a backlash as there always is. Trump is trying to do as much as he can before then. I would forecast that the Dems will win the House back by a slight margin because the Republicans will do as Erick talked about yesterday and highlight the crazies in the Dem party (and there a lot to choose from) to minimize the backlash. The Republicans will hold the Senate because the electoral map is very favorable to them even with a backlash.
Trump is eyeing 2028 with JD as his heir apparent. The economy will begin to roar back to life in 2027 and the world will be at relative peace with the wars in Ukraine and the Middle East ended. The Dems will continue to have their internal civil war between the sane and crazies with the crazies believing they took the House in 2026 because of their progressive policies. They will run on another crazy platform with another progressive lunatic as their presidential nominee. The 2028 election will be a bloodbath for them - with JD winning the Presidency by an even larger margin than Trump did in 2024 and the Republicans retaining the Senate and wining the House by a large margin with perhaps 230-240 seats because what sane Dems are left will move to the Republican party.
Like all upper class people just selfish of their own wealth, no doubt Erick is criticizing Trump after watching his Wall Street investments decline.
But what Erick and others disingenuously fail to do is first admit that only massive government debt spending has previously propped up US markets, and the markets themselves have grown disconnected from any evidence of how the bottom 80% are doing.
Lastly, Erick like the Democrats fails to offer any alternative other than return to the status quo. How do we improve the economic circumstances for the bottom 80% if not the Trump plan?
What is the alternative then Erick? How do we level the global trade playing field and add working class economic opportunity if not with at least reciprocal tariffs?
Because our economy was propped up by massive government spending since COVID, a correction was always going to turn into a dip in the stock market. However, I can't feel like Trump's obsession with tariffs is self-defeating. On the one hand, he's got post-liberal right wingers like Vance or Oren Cass whispering in his ear that tariffs are great with no downside. There is a reason that we moved away from tariffs after the 1930s and that's because it was bad policy. On the other, he wants to use them as a negotiating tool. In Colombia and Panama, that achieved great results for the American people. Maybe it will in Mexico as well. In Canada, I'd have to agree with NRO's Rich Lowry that the policy makes no sense. The better way of addressing problems like our $60 billion trade deficit, their lack of military spending, and the 1% of fentanyl that comes across the Northern border is not throwing a lifeline to the Trudeau government and the Democrats. I don't know what the outcome here will be but Erick is right to warn, the same forces that swept Republicans and MAGA into power can sweep them out if they govern irresponsibly.
"It won’t take long for the Democrats to seize on the comparison and tie it to President Trump’s handling of the economy."
This from the folks that kept insisting inflation was transitory even after 3+ years.
This from the same people who said nothing about the price of eggs for 4 years, but now insist Trump should have been able to bring egg prices down within the first week of his administration.
Another point of view to consider - one written by folks who understand that we are in a war between proponents of a longterm stronger private-sector economy, and those who believe in MMT and endless debt - written by folks who are capable of taking a longer perspective than do the people in the media: https://www.zerohedge.com/economics/trump-trying-push-us-recession
Interesting spin here. Thanks for posting. However, if Trump really wanted to intentionally put the economy into a recession, shouldn't he be pushing against extending the tax cuts? That plus cutting government spending and the added tax of tariffs would really do the trick.
Wow! Excellent article in your link. It makes sense to me that removing vast amounts of money (DOGE) from the economy (both in the US & in the world economy) will result in a recession. I like the author's explanation or, maybe to me, it just makes more sense than other attempts at explanations.
While I have no idea of why Trump wants to extend the tax cuts (and I’m not a Trump supporter or defender), I know that for years numerous politicians and economists have expressed the belief that tax cuts lead to more spending by the taxpayers which helps the economy.
One thing that I'm picking up on is that Trump sees the Democrats WANT to shut down government, and that will provide fresh fodder for displaying constantly what the left really is all about. This could lead to a big swing to the right in the midterms.
This is colossally stupid. If you’re going to have a recession make it now? What makes you think the government can end it quickly? The lessons of the depression era are being lost for radio show ratings, tribal loyalties, and performative nonsense.
The lesson of the Depression is the Fed is lousy at managing the economy. From the summer of 1930 to the spring of 1931, 1/3 of al US banks closed. This is a classic multiple contraction in the money supply. What did the Fed do? They delibrately reduce the money supply, making the multiple contraction worse. We faced a very similar thing in 2008. What did the Fed do? Increased the money supply. Did they go too far for too long? Sure. In 1932, the US elected FDR and got his poor ecnomic policy choices. The New Deal prolonged the depression. Similarily, we elected Obama and got his poor economic policy choices. Do you all remember the Summer of Recovery, Stimulus (Porkulus), cash for clunkers, etc.?
I am not sure Eric is on target with his critiscism of tariff policy by the US. I think it boils down to one thing--massive government spending.
Eric seems a bit lost when he talks about economics and markets. I am not say ing he is wrong. But often times people get locked into secondary facts that the market becomes fixated on and ignores the opposite.
For COVID the issue in late Feb early march was the expected death rate. Then the impact of lockdowns. If you looked at the markets back then, everything dropped. Exxon traded at $111.80 on February 1st 2020. It dropped to as low as $30.11 before rising to as high as $38.70 on April 1st, 2020. Similarly, KO traded from a high of $58.98 to as low as $36.56 back as hgh as $45.56. Obviously, KO sells soft drinks around the world. Exxon sells oil all around the world. Fewer people means fewer customers. By the end of 2020, alot of those fears had be resolved, but we were left with the COVID stimulus mess that we are still facing.
Since 2020 the US poplution has increased 2%, but spending has risen 52%. Is life pre COVID that more difficult that the US federal government needs to spend huge sums of money? Of course not. So who is getting the money? And how is spending this money imporving the economic outcome for the american citizen?
Tariffs are not a significant player in US economic activity or global trade. Can they destort trade? Sure. I have bought flat packed cabintery from a US wholeseller for over 5 years. Same product, smae company. The boxes used to say made in China. Then after Trump imposed tariffs on China, the boxes started saying made in Veitnam, Thailand, etc. Why? It is pretty easy to move a cabintry shop from one warehouse to another. This is how the market responds to tariffs. It reacts prety quick. Somethings dont like steel plants and Semiconductor plants which take years to build, staff and qualitfy for production.
The main issue is spending. and this is how I wish Eirc would look at the world. The easiest way to quantify the impact on spending is the equation for a perpituity. We use this to roughly value assets in real esate. Your income divided by the discout rate is your value. So $1 in income divided by a 5% discount rate is worth $20. Or you can say if I have $20 in the bank and they pay me 5% interst, I earn $1. Similarily, If the government spend $1 they need the economy to pay $1 in taxes. If one uses the 10 year treasury as the government discount rate and the 10 year is currently trading at 4.232%, then the economy has to allocate $23.63 in capital to generate the $1 in income to fund the $1 in government spending.
If Trump and Doge can save $100 billion in government spending, that means the economy does not need to allocate $2.363 trillion to government to generate the $100 billion in spending. One can apply this to regualtions as well. Tariffis change how the price function works which changes consumer behaviour in allocateing spending on goods and services. But the most important thing to realize is as government spending rises, the economy has to allocate more and more capital to support government spending. Inflation just moves the decible point around. But on precentage terms, as government spending rises as a precent of GDP, then more capital is trasnfered out of private market control.
One last point. US tariffs on other countires are not higher than tariffs imposed by other countries on american goods and serivces. So if the US mathces tariffs on other countries that they impose on us, then the distortion of tariffs on global trade is neutralized and the flow of goods and services would approach normal market dynamics free of government tariff policies.
Less spending- if I remember correctly a recession is often caused by reduced in confidence /less spending.
Just maybe with high credit card debt people (my sister n law) will not make her weekly purchase of clothes/purses etc that she already has in her closet not ever worn. And for companies they will delay spending on stuff they currently have that can produce more if the employee did not play on they computer 17 times a day.
Recessions happen for many different reasons. But they are almost always a result of falling employment. Why? Employment is allocated to the worng things for too long and changes needed to be made. Or capital is allocated to the worong thing. Emplloyment began to fall in late 2007, 6 months before the market turned down. Housing construction ground to a halt by late 2008 becasue the ability to finance a purchase had cratered--the subrpime loan fisco. But in reality, emplyment fell in late 2007 casuing enough people to reduce spending and thus reduced economic output. In 2000, we allocated to much money to the Dot.com mania. Some stocks had a PE of 150 meaning that the price include all possible future profits for decades. Then the maket tanked, distroying capital with reduced the productive capacity of hte ecnomy. Thus empolyment fell as business stopped paying people to produce a good or serivce that would not be purchased by the economy. A particular case would be routers. Cisco was the king of routers. They sold them like hotcakes up unitl 2000. Then their sales fell. So they had to lower production. More unemployment. If you look at the auto industry, in 1929 we could produce about 5 million cars. But in 1929 we only sold 4 million cars. What do you do with the 25% excess capacity? close it down. more unemployment. If you also look at the consumer credit levels in the 1920's you will see it expand to the point where the consumer could not pay the debt once they lost their job.
In short, growing the economy on creidt is ok up to a point. I need to issue 30 year bonds to build a power plant or steel mill. I dont need to issue lots of consumer debt so people can buy some bling.
The case today is the rise of the "grifting economy". When government spending rises 52% when population rises 2%, one has to ask who got the money. The grifters. Peope who convinved government to give them money without having to do anything of value. For instance, Stacy Ambrams received a $2 billion grant to buy new appliances for underserved communities. There was nothing particularily worng with the appliances these underserved communities owned. They did use more energy and this increased utility bills. The new applainces probably reduced energy consumption. great.
But if you ask how much money was used to run the program verus just giving a check to the underserved community, I think you will find that the grant money was largely spent on adminstrative tasks rather than on paying and delivering the applainces. So we will enter a recession, or already have done so except for the higher governmet emplyment and grifting operations. You elliminate that and the true picture develops. If the federal government work force is 2 million and we fire 20%, that is 400,000 unemployed, a small number in comparision to the overall employment levels. Might have localized impacts, like around the Washington DC metro area, or localized to Decatur Ga where the CDC is located. But you might have to double that number as DEI is reduced across the country and these people will have to enter the workforce where there skills are not highly valued. Thus local disruptions in economic activity where these DEI individuals are concentrated lose a job and get emplyed at a lower salary.
I wouldn't say Rob Schmitt is praising Trump for the stock market slump. That's kind of absurd - nobody would praise a stock market tank. Instead, he's praising him for having the courage to tackle a problem that nobody else ever wanted to tackle, and this market slump is the result. Seeing my 401K lose large chunks of value, especially when I was intending to retire soon, is nerve-wracking to say the least, and I wish Trump wasn't so sold on tariffs. And I really wish he hadn't gotten Canada's knickers in a twist - but honestly, they are totally overreacting. Nevertheless, Trump is instigating change. When given a chance, 99% of people prefers status quo because it's comfortable and predictable. This is the type of resolve we need to tackle the problem of Social Security, our biggest entitlement program that's bankrupting us and the issue that's guaranteed to explode heads in both parties. I doubt Trump's going to change his mind soon on tariffs so I guess we'd better buckle up and prepare for a wild ride. I guess if Elon can be threatened, have his businesses attacked non-stop and not even get paid for it, I can grit my teeth and bear it. And yes, Congress needs to get off their collective rears and pass the tax cuts, etc.
Should we continue the tax cut when we have a $36 trillion debt? Why not let them go back to where they were and use the $2 trillion in revenue to balance the budget?
Problem is that starving them of revenue does not cut spending either. That's why we have a $36 trillion national debt. Trump is cutting spending now and that's good, but, as in any household, sooner or later you have to also pay down the credit card.
Alternative is trump does nothing no tariffs the artificial economy crashes anyway trump gets blamed for not doing anything.
I to think tarrifs weren’t the way to go but given the bidens drunken sailor spending which has setup fake green industry like EV stoves and that led to a massive trade deficit with Europe not sure what else he could have done. America had nothing else to fight with.
So do we rebuild the boat or let it sink?
The ship was going down before trump made office. He’s trying to save what he can better to crash it now than wait till just before the midterms.
One way to make sure that people panic about the possibility of a recession after two months is to repeatedly tell them to worry and compare the reversal of Obamas pretty well accomplished "transformation" of America to the actual transformation. I think a "wait a bit and see", "give it a chance" approach would be nice. Even though we see signs that our elected congress people will do everything they can to maintain the status quo and not make the necessary cuts and adjustments to the budget.
Exactly! Erick and others cause people to panic by continually pointing out the negatives and telling us to panic. They think they're being realists and telling it like it is, but it's not helping at all, and it's creating more panic in the long run. That's why I miss Rush Limbaugh so much. He always gave everything a positive spin, calming our fears even in the darkest days of Clinton and Obama.
Exactly. Ericks page has turned into doom and gloom media.
Main point I’m not a Pom Pom waving trump supporter but if Erick really believes the voters will go running back to the blue haired insanity that is the dems. Yeah good luck with that bet.
In my immediate circle of friends/family there a lot of us that are former Dems including my wife, mother, dozens of friends and myself. I don't see any of us ever voting Dem again at this point. As the saying goes, "we didn't leave the party, the party left us".
Tiring. Best way to put that for sure. And the belief that somehow that tiring response will lead to a massive voter backlash?
I don’t know. But I can have a distaste for trump but none of that makes me look at the other side and go “oooo shiny”. Maybe a few. But I just don’t see that happening nationwide.
The dems got trounced in 2010 not because of some economic reason but because of Obama care. Economy does matter but so does cultural and moral beliefs. People still care about what’s taught at their schools and what happens in the streets.
Also everyone needs to realize the world is not perfect. I didn’t expect to get everything. A recession is tough to take but if we get a closed border and crazy mental patients off the sports field of my daughters sports. Fine.
I don't know if this has been said because I haven't read all the comments, but I believe Trump is looking long term - beyond the 2026 mid-terms. Trump is not only trying to reorder the American economy from being a government-centric economy to a private sector-centric economy, but the world economy. I think he and Bessner have also said it.
There is going to be rocky period with this reset. The tariff reorientation, bringing Russia back into the world's economy, stopping the war in the Middle East as well as containing China.
In my opinion, Trump doesn't care about what happens in the 2026 mid-terms, he has only one term. As Erick has pointed out there will be a backlash as there always is. Trump is trying to do as much as he can before then. I would forecast that the Dems will win the House back by a slight margin because the Republicans will do as Erick talked about yesterday and highlight the crazies in the Dem party (and there a lot to choose from) to minimize the backlash. The Republicans will hold the Senate because the electoral map is very favorable to them even with a backlash.
Trump is eyeing 2028 with JD as his heir apparent. The economy will begin to roar back to life in 2027 and the world will be at relative peace with the wars in Ukraine and the Middle East ended. The Dems will continue to have their internal civil war between the sane and crazies with the crazies believing they took the House in 2026 because of their progressive policies. They will run on another crazy platform with another progressive lunatic as their presidential nominee. The 2028 election will be a bloodbath for them - with JD winning the Presidency by an even larger margin than Trump did in 2024 and the Republicans retaining the Senate and wining the House by a large margin with perhaps 230-240 seats because what sane Dems are left will move to the Republican party.
You heard it here first.
It truly is as the song goes: clowns to left of me, jokers to the right, here I am stuck in the middle with you.
Like all upper class people just selfish of their own wealth, no doubt Erick is criticizing Trump after watching his Wall Street investments decline.
But what Erick and others disingenuously fail to do is first admit that only massive government debt spending has previously propped up US markets, and the markets themselves have grown disconnected from any evidence of how the bottom 80% are doing.
Lastly, Erick like the Democrats fails to offer any alternative other than return to the status quo. How do we improve the economic circumstances for the bottom 80% if not the Trump plan?
Wow I see you are drinking the coolaid hard. Maybe you should go back to school and learn economics.
Congrats, Frank. Erick just explained on radio why you are nuts.
Sure Frank. That's it.
What is the alternative then Erick? How do we level the global trade playing field and add working class economic opportunity if not with at least reciprocal tariffs?
What percent of that 80% have a 401K? Probably at least 50.
Nope
I don’t recall Trump campaigning on a promise to crash the stock market.
Because our economy was propped up by massive government spending since COVID, a correction was always going to turn into a dip in the stock market. However, I can't feel like Trump's obsession with tariffs is self-defeating. On the one hand, he's got post-liberal right wingers like Vance or Oren Cass whispering in his ear that tariffs are great with no downside. There is a reason that we moved away from tariffs after the 1930s and that's because it was bad policy. On the other, he wants to use them as a negotiating tool. In Colombia and Panama, that achieved great results for the American people. Maybe it will in Mexico as well. In Canada, I'd have to agree with NRO's Rich Lowry that the policy makes no sense. The better way of addressing problems like our $60 billion trade deficit, their lack of military spending, and the 1% of fentanyl that comes across the Northern border is not throwing a lifeline to the Trudeau government and the Democrats. I don't know what the outcome here will be but Erick is right to warn, the same forces that swept Republicans and MAGA into power can sweep them out if they govern irresponsibly.
No one can debate that a component of the Democratic Party support insane leftist policies and causes. But so what?
Trump's economic illiteracy is infinitely more important and disastrous. Markets validate that reality.
And on Ukraine, Trump has done the impossible - the US is now aligned with Russia?
So much for moral clarity.
How long before this site acknowledges this reality.
Republicans need to revolt to nullify this Presidency
Republican house members need to lead an impeachment. Their constituents will soon demand it.
Go back to Bluesky please. It is there you will find solace with your status quo dreams.
Looking at the Dow the last few days, the status quo looks pretty good.
"It won’t take long for the Democrats to seize on the comparison and tie it to President Trump’s handling of the economy."
This from the folks that kept insisting inflation was transitory even after 3+ years.
This from the same people who said nothing about the price of eggs for 4 years, but now insist Trump should have been able to bring egg prices down within the first week of his administration.
They disgust me.
And Trump is passing them ammunition.
Unfortunately, he is.
Another point of view to consider - one written by folks who understand that we are in a war between proponents of a longterm stronger private-sector economy, and those who believe in MMT and endless debt - written by folks who are capable of taking a longer perspective than do the people in the media: https://www.zerohedge.com/economics/trump-trying-push-us-recession
Interesting spin here. Thanks for posting. However, if Trump really wanted to intentionally put the economy into a recession, shouldn't he be pushing against extending the tax cuts? That plus cutting government spending and the added tax of tariffs would really do the trick.
Wow! Excellent article in your link. It makes sense to me that removing vast amounts of money (DOGE) from the economy (both in the US & in the world economy) will result in a recession. I like the author's explanation or, maybe to me, it just makes more sense than other attempts at explanations.
So why does Trump support extending his tax cuts rather than balancing the budget?
While I have no idea of why Trump wants to extend the tax cuts (and I’m not a Trump supporter or defender), I know that for years numerous politicians and economists have expressed the belief that tax cuts lead to more spending by the taxpayers which helps the economy.
True, but using tax cuts to fight recessions and/or printed money payouts only puts us deeper into debt.
One thing that I'm picking up on is that Trump sees the Democrats WANT to shut down government, and that will provide fresh fodder for displaying constantly what the left really is all about. This could lead to a big swing to the right in the midterms.
This is colossally stupid. If you’re going to have a recession make it now? What makes you think the government can end it quickly? The lessons of the depression era are being lost for radio show ratings, tribal loyalties, and performative nonsense.
The lesson of the Depression is the Fed is lousy at managing the economy. From the summer of 1930 to the spring of 1931, 1/3 of al US banks closed. This is a classic multiple contraction in the money supply. What did the Fed do? They delibrately reduce the money supply, making the multiple contraction worse. We faced a very similar thing in 2008. What did the Fed do? Increased the money supply. Did they go too far for too long? Sure. In 1932, the US elected FDR and got his poor ecnomic policy choices. The New Deal prolonged the depression. Similarily, we elected Obama and got his poor economic policy choices. Do you all remember the Summer of Recovery, Stimulus (Porkulus), cash for clunkers, etc.?
I am not sure Eric is on target with his critiscism of tariff policy by the US. I think it boils down to one thing--massive government spending.
This is literally Trump Administration officials are saying, including the President.
Eric seems a bit lost when he talks about economics and markets. I am not say ing he is wrong. But often times people get locked into secondary facts that the market becomes fixated on and ignores the opposite.
For COVID the issue in late Feb early march was the expected death rate. Then the impact of lockdowns. If you looked at the markets back then, everything dropped. Exxon traded at $111.80 on February 1st 2020. It dropped to as low as $30.11 before rising to as high as $38.70 on April 1st, 2020. Similarly, KO traded from a high of $58.98 to as low as $36.56 back as hgh as $45.56. Obviously, KO sells soft drinks around the world. Exxon sells oil all around the world. Fewer people means fewer customers. By the end of 2020, alot of those fears had be resolved, but we were left with the COVID stimulus mess that we are still facing.
Since 2020 the US poplution has increased 2%, but spending has risen 52%. Is life pre COVID that more difficult that the US federal government needs to spend huge sums of money? Of course not. So who is getting the money? And how is spending this money imporving the economic outcome for the american citizen?
Tariffs are not a significant player in US economic activity or global trade. Can they destort trade? Sure. I have bought flat packed cabintery from a US wholeseller for over 5 years. Same product, smae company. The boxes used to say made in China. Then after Trump imposed tariffs on China, the boxes started saying made in Veitnam, Thailand, etc. Why? It is pretty easy to move a cabintry shop from one warehouse to another. This is how the market responds to tariffs. It reacts prety quick. Somethings dont like steel plants and Semiconductor plants which take years to build, staff and qualitfy for production.
The main issue is spending. and this is how I wish Eirc would look at the world. The easiest way to quantify the impact on spending is the equation for a perpituity. We use this to roughly value assets in real esate. Your income divided by the discout rate is your value. So $1 in income divided by a 5% discount rate is worth $20. Or you can say if I have $20 in the bank and they pay me 5% interst, I earn $1. Similarily, If the government spend $1 they need the economy to pay $1 in taxes. If one uses the 10 year treasury as the government discount rate and the 10 year is currently trading at 4.232%, then the economy has to allocate $23.63 in capital to generate the $1 in income to fund the $1 in government spending.
If Trump and Doge can save $100 billion in government spending, that means the economy does not need to allocate $2.363 trillion to government to generate the $100 billion in spending. One can apply this to regualtions as well. Tariffis change how the price function works which changes consumer behaviour in allocateing spending on goods and services. But the most important thing to realize is as government spending rises, the economy has to allocate more and more capital to support government spending. Inflation just moves the decible point around. But on precentage terms, as government spending rises as a precent of GDP, then more capital is trasnfered out of private market control.
One last point. US tariffs on other countires are not higher than tariffs imposed by other countries on american goods and serivces. So if the US mathces tariffs on other countries that they impose on us, then the distortion of tariffs on global trade is neutralized and the flow of goods and services would approach normal market dynamics free of government tariff policies.
This ^^^
Very very well said. Our economy only grew in the last three years because of government spending and transfers. That has to stop!
I've already written three posts about the spending side of the equation and growth of the private sector if the public sector contracts.
Less spending- if I remember correctly a recession is often caused by reduced in confidence /less spending.
Just maybe with high credit card debt people (my sister n law) will not make her weekly purchase of clothes/purses etc that she already has in her closet not ever worn. And for companies they will delay spending on stuff they currently have that can produce more if the employee did not play on they computer 17 times a day.
Recessions happen for many different reasons. But they are almost always a result of falling employment. Why? Employment is allocated to the worng things for too long and changes needed to be made. Or capital is allocated to the worong thing. Emplloyment began to fall in late 2007, 6 months before the market turned down. Housing construction ground to a halt by late 2008 becasue the ability to finance a purchase had cratered--the subrpime loan fisco. But in reality, emplyment fell in late 2007 casuing enough people to reduce spending and thus reduced economic output. In 2000, we allocated to much money to the Dot.com mania. Some stocks had a PE of 150 meaning that the price include all possible future profits for decades. Then the maket tanked, distroying capital with reduced the productive capacity of hte ecnomy. Thus empolyment fell as business stopped paying people to produce a good or serivce that would not be purchased by the economy. A particular case would be routers. Cisco was the king of routers. They sold them like hotcakes up unitl 2000. Then their sales fell. So they had to lower production. More unemployment. If you look at the auto industry, in 1929 we could produce about 5 million cars. But in 1929 we only sold 4 million cars. What do you do with the 25% excess capacity? close it down. more unemployment. If you also look at the consumer credit levels in the 1920's you will see it expand to the point where the consumer could not pay the debt once they lost their job.
In short, growing the economy on creidt is ok up to a point. I need to issue 30 year bonds to build a power plant or steel mill. I dont need to issue lots of consumer debt so people can buy some bling.
The case today is the rise of the "grifting economy". When government spending rises 52% when population rises 2%, one has to ask who got the money. The grifters. Peope who convinved government to give them money without having to do anything of value. For instance, Stacy Ambrams received a $2 billion grant to buy new appliances for underserved communities. There was nothing particularily worng with the appliances these underserved communities owned. They did use more energy and this increased utility bills. The new applainces probably reduced energy consumption. great.
But if you ask how much money was used to run the program verus just giving a check to the underserved community, I think you will find that the grant money was largely spent on adminstrative tasks rather than on paying and delivering the applainces. So we will enter a recession, or already have done so except for the higher governmet emplyment and grifting operations. You elliminate that and the true picture develops. If the federal government work force is 2 million and we fire 20%, that is 400,000 unemployed, a small number in comparision to the overall employment levels. Might have localized impacts, like around the Washington DC metro area, or localized to Decatur Ga where the CDC is located. But you might have to double that number as DEI is reduced across the country and these people will have to enter the workforce where there skills are not highly valued. Thus local disruptions in economic activity where these DEI individuals are concentrated lose a job and get emplyed at a lower salary.
I wouldn't say Rob Schmitt is praising Trump for the stock market slump. That's kind of absurd - nobody would praise a stock market tank. Instead, he's praising him for having the courage to tackle a problem that nobody else ever wanted to tackle, and this market slump is the result. Seeing my 401K lose large chunks of value, especially when I was intending to retire soon, is nerve-wracking to say the least, and I wish Trump wasn't so sold on tariffs. And I really wish he hadn't gotten Canada's knickers in a twist - but honestly, they are totally overreacting. Nevertheless, Trump is instigating change. When given a chance, 99% of people prefers status quo because it's comfortable and predictable. This is the type of resolve we need to tackle the problem of Social Security, our biggest entitlement program that's bankrupting us and the issue that's guaranteed to explode heads in both parties. I doubt Trump's going to change his mind soon on tariffs so I guess we'd better buckle up and prepare for a wild ride. I guess if Elon can be threatened, have his businesses attacked non-stop and not even get paid for it, I can grit my teeth and bear it. And yes, Congress needs to get off their collective rears and pass the tax cuts, etc.
Should we continue the tax cut when we have a $36 trillion debt? Why not let them go back to where they were and use the $2 trillion in revenue to balance the budget?
Starve them of revenue. You and I both know Congress rarely and mostly never cuts spending.
Problem is that starving them of revenue does not cut spending either. That's why we have a $36 trillion national debt. Trump is cutting spending now and that's good, but, as in any household, sooner or later you have to also pay down the credit card.
Agree I just don’t see them doing it with tax revenue.
How do we pay down credit cards? By generating additional revenue and applying it to the balance. How is paying down the national debt any different?
You are a normal person - Congress as a whole isn’t normal.
Cool story bro. Now do the border.
Alternative is trump does nothing no tariffs the artificial economy crashes anyway trump gets blamed for not doing anything.
I to think tarrifs weren’t the way to go but given the bidens drunken sailor spending which has setup fake green industry like EV stoves and that led to a massive trade deficit with Europe not sure what else he could have done. America had nothing else to fight with.
So do we rebuild the boat or let it sink?
The ship was going down before trump made office. He’s trying to save what he can better to crash it now than wait till just before the midterms.
Your investments value is only revelent on the day you cash them in. The same for the value of your house. It is worth what you get for it.
One way to make sure that people panic about the possibility of a recession after two months is to repeatedly tell them to worry and compare the reversal of Obamas pretty well accomplished "transformation" of America to the actual transformation. I think a "wait a bit and see", "give it a chance" approach would be nice. Even though we see signs that our elected congress people will do everything they can to maintain the status quo and not make the necessary cuts and adjustments to the budget.
Exactly! Erick and others cause people to panic by continually pointing out the negatives and telling us to panic. They think they're being realists and telling it like it is, but it's not helping at all, and it's creating more panic in the long run. That's why I miss Rush Limbaugh so much. He always gave everything a positive spin, calming our fears even in the darkest days of Clinton and Obama.
Exactly. Ericks page has turned into doom and gloom media.
Main point I’m not a Pom Pom waving trump supporter but if Erick really believes the voters will go running back to the blue haired insanity that is the dems. Yeah good luck with that bet.
Voters proved they aren’t that stupid.
In my immediate circle of friends/family there a lot of us that are former Dems including my wife, mother, dozens of friends and myself. I don't see any of us ever voting Dem again at this point. As the saying goes, "we didn't leave the party, the party left us".
I am not a pom pom waving Trump supporter either. The people who go off the rails either in support or against him are very tiring.
Tiring. Best way to put that for sure. And the belief that somehow that tiring response will lead to a massive voter backlash?
I don’t know. But I can have a distaste for trump but none of that makes me look at the other side and go “oooo shiny”. Maybe a few. But I just don’t see that happening nationwide.
The dems got trounced in 2010 not because of some economic reason but because of Obama care. Economy does matter but so does cultural and moral beliefs. People still care about what’s taught at their schools and what happens in the streets.
Also everyone needs to realize the world is not perfect. I didn’t expect to get everything. A recession is tough to take but if we get a closed border and crazy mental patients off the sports field of my daughters sports. Fine.