Goldman Sachs: The U.S. economy is headed into a period of noticeably slower growth thanks to the tariffs

The U.S. economy is headed into a period of noticeably slower growth thanks to the tariff impact on inflation and consumer spending, according to Goldman Sachs.


The U.S. economy is headed into a period of noticeably slower growth thanks to the tariff impact on inflation and, by consequence, consumer spending, according to Goldman Sachs.

Economists at the Wall Street firm expect gross domestic product to rise at just a 1.1% annual pace through 2025 “as the growing real income drag from tariff-related price increases offsets the boost from easier financial conditions,” Goldman’s chief economist Jan Hatzius said in a note to clients.

“Even a one-time price increase will eat into real income, at a time when consumer spending trends already look shaky,” Hatzius said. Though retail sales numbers recently have been solid, the Goldman economist expects that spending on balance stagnated for the first six months, which “rarely happens outside of recession.”

GDP fell at a 0.5% annualized pace in the first quarter, with consumer spending up just 0.5%.

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Trump is an idiot.

I though funding the goverment was a net positive.

dmpi said:

I though funding the goverment was a net positive.

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Yes, we don’t need government. Gutting it will make everything better. /s

Really pleased the left is awakening to the potential downside of taxing business and commerce. Let's hope the lesson sticks.

NatMorton said:

Really pleased the left is awakening to the potential downside of taxing business and commerce. Let's hope the lesson sticks.

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So who should be taxed?

NatMorton said:

Really pleased the left is awakening to the potential downside of taxing business and commerce. Let's hope the lesson sticks.

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This is ultimately a tax on all consumers, and therefore ordinary Americans.

Democrats want low taxes for ordinary Americans and high taxes for rich people.

Republicans want high taxes for ordinary Americans, because they hate ordinary Americans, and they want low taxes for rich people because they love rich people.

ataraxia said:

So who should be taxed?

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Everyone who earns money above the poverty line.

NatMorton said:

Everyone who earns money above the poverty line.

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Including capital gains?

Idiots

The tariff negotiations with Japan caused the Dow Jones to rise 500 points today and close at 45,010.29. That doesn't seem to me to be an economy where everyone is scared, nor does it seem to me to be a situation where tariffs are hurting Americans.

W_Heisenberg said:

This is ultimately a tax on all consumers, and therefore ordinary Americans.

Democrats want low taxes for ordinary Americans and high taxes for rich people.

Republicans want high taxes for ordinary Americans, because they hate ordinary Americans, and they want low taxes for rich people because they love rich people.

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BS and the proof is the segment of the American society that just left the Democratic Party.

ataraxia said:

Including capital gains?

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Yep, and at the same rate as every other dollar of income.

Slow growth and low inflation is fine.

NatMorton said:

Everyone who earns money above the poverty line.

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Sure. Just index the Standard deduction on tax returns to the Poverty line. Problem solved.... ish. There are hard cut-offs in many public assistance programs that makes it hard for someone on low income to advance, and the tax cut off is another one of those. They create artificial barriers. Section-8 is probably the most egregious, though.

Like with Section-8 the problem becomes what incentive a person as at the low end to cross the poverty line when so many benefits and public assistance are pinned to it. I live in a fairly moderately priced x-burb of Washington DC (moderate by DC standards) and I'd guess about 10% of the homes in my neighborhood are Section-8 houses.

Section-8 eligibility has 3 hard breaks on benefit levels on 30%/50%/80% of average Household income. These determine the 3 levels of beneficiary responsibility for rent.

In my area those three levels are
Low: $40,000 --> Annual Section-8 Rent: ~$10,000
Medium: $67,000 --> Annual Section-8 Rent: ~$18,000
High: $107,000 --> Annual Section-8 Rent: ~$28,000
(numbers based on HUD valuations based on home size)

They all fall at about 25% of income, and there is room grow grow within each bracket, but you always take a hit with each graduation.

So in my neighborhood you can live in a home with an average value of $600,000 on an income of $107,000. If you make more than $107,000 you will graduate from a 4,500 square foot home in a quiet neighborhood to an apartment or a doublewide for the same monthly payment, or you ate hit with a 25% jump in rental payments in order to stay in relatively the same accommodations.

Bonus, the apartment complex that shares our zip code is rife with gang violence and illicit drug trade. We had a double shooting there just last week. That's where you'd get to go once you "graduate" from Section-8 in my area.