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Is Trump Building an Economy That Will Give a Short-Term Boost to the Rich but Throw the U.S. into Economic Disaster in the Long Run?

Juks

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As president, Donald Trump lowered federal income taxes for all Americans. However, these tax cuts were temporary and will expire at the end of next year. If Trump wins the election, he plans to make his tax cuts permanent. Currently, there is a cap on how much state taxes can be deducted. If Trump wins, he plans to remove this cap, further lowering taxes for many Americans. Trump also wants to eliminate taxes on tips, income from overtime, and Social Security pensions.

Over the past year, inflation has dropped significantly in the U.S. and is now very close to the Federal Reserve's two-percent target. As a result, the Fed recently lowered interest rates. However, despite inflation seemingly being under control, both Trump and Harris continue to talk about what they will do to curb rising prices. Trump has said he will make American prices "affordable" again by eliminating costly regulations and reducing energy prices through increased production of American oil and gas. On his first day as president, he has vowed to instruct his team to "use every tool and authority available to them to defeat inflation (which has already been defeated) and to quickly bring consumer prices down."

Trump also plans to eliminate taxes on Social Security pensions. Many of Trump's tax cuts primarily benefit those with high incomes, which can exacerbate inequality and lead to wealth concentration. The elimination of the state tax deduction cap will benefit people in high-tax states like New York and California the most. Removing this cap means individuals in these states could deduct the full amount of their state taxes, significantly lowering their federal tax burden. Eliminating taxes on Social Security pensions would also benefit the wealthiest retirees more than others, as they pay the most taxes on these pensions. (The poorest retirees in the U.S. already pay little or no taxes on their Social Security benefits.)

Trump has no plan to finance his tax cuts, instead relying on the assumption that they will lead to increased growth. The U.S. national debt is projected to increase by $7.5 trillion by 2035 (according to the "Committee for a Responsible Federal Budget") with Trump's policies. Since most of the benefits from his tax cuts will go to a small group of very wealthy individuals, and because this group already has the means to consume everything they want, it's highly doubtful that Trump's tax cuts will lead to increased consumption. Instead, his policies are more likely to result in unchanged or reduced consumption, as decisions such as imposing tariffs will lead to higher prices, eating up the tax cuts for the middle class, who do not benefit as much as the wealthy.

Trump (or more accurately, his advisors—he's not that smart himself…) is aware of this, so he has a typical amateur solution to the problem. A "backup" plan that will destroy the U.S.'s potential for a strong economy in the long term and instead plunge the country into a deep recession. In the short term, it may lead to increased consumption and an "artificial" boost in GDP by taking control of FEd and the settings of interest rates. Doing this will in the short term give the US a boost in GDP, but in the long-term the U.S. would plunge into a deep recession, and the risk of stagflation would be overwhelming.
 

Is Trump Building an Economy That Will Give a Short-Term Boost to the Rich but Throw the U.S. into Economic Disaster in the Long Run?​

Short answer: No.

You make a lot of contentions here. To adequately address all of these contentions, I will quickly run into the forum's word count restrictions. Instead of doing that, I'll just say this:

Trump has established a record of low inflation, rising wages and decreasing consumer prices...especially in regard to food. In short, he has talked the talk AND he has walked the walk. He's been there and done that. There is no reason to believe that he cannot do it again, even if he is opposed by Congress as he was previously.
 
Yes. Trickle down does not work, never has. It does however build a greater divide between the rich and the lower levels, increasing poverty and struggles of anyone who isn't doing well already.
 
He isn't currently building any economy. He's trying to get revenge on a country that pissed him off. We're all basically like the Nintendo controller after he lost Castlevania again. You have to pick up the controller before you can throw it. He's trying to do that now.
 

Trump's proposals:
  • Permanently lowering federal income taxes: Trump wants to make his previous temporary tax cuts permanent.
  • Eliminating the cap on state tax deductions: This benefits people in high-tax states by allowing them to deduct the full amount of their state taxes from their federal taxes.
  • Eliminating taxes on tips, overtime income, and Social Security pensions: These measures primarily benefit wealthier individuals, including retirees.
  • Further reducing corporate taxes: Trump aims to lower corporate taxes from 21% to 15%.
  • Increasing tariffs: Trump plans to impose tariffs between 10% and 20% on most imported goods, with a special 60% tariff on Chinese goods.
  • Deregulation and increased oil and gas production: Trump intends to reduce regulations and increase domestic energy production to lower prices.
Criticism of Trump’s Economic Proposals:

  • Tax cuts primarily benefit the wealthy: Eliminating the cap on state tax deductions and cutting Social Security taxes disproportionately benefit high-income earners, increasing wealth inequality.
  • No financing for tax cuts: Trump has no concrete plan to finance his tax cuts. This is expected to increase the national debt by $7.5 trillion by 2035.
  • Unlikely to boost consumption: The wealthiest already have enough money to consume whatever they want, so the tax cuts are unlikely to significantly increase overall consumption.
  • Tariffs will raise prices: Increased tariffs on imported goods will make products more expensive, especially for the middle class, eating up any benefits they might gain from tax cuts.
  • Deregulation and lack of investment in green energy: By eliminating support for green technology and relying on fossil fuels, Trump will damage long-term economic growth and falling behind in the global shift towards sustainable energy.
 
And as I said in my first post, Trump has a plan for this:
  • Unlikely to boost consumption: The wealthiest already have enough money to consume whatever they want, so the tax cuts are unlikely to significantly increase overall consumption.
Trump’s Plan to Control the Fed:

Trump aims to take more control over the Federal Reserve (Fed) and influence its monetary policy. Specifically, he wants to keep interest rates low even as inflation increases, preventing the Fed from acting independently to raise rates to control inflation.

Short-Term Benefits of Keeping Interest Rates Low:

  • Increased consumption: Keeping interest rates low makes borrowing cheaper, which can lead to an increase in consumer spending and investment. In the short term, this could boost GDP by stimulating demand.
  • Cheaper borrowing: Low interest rates encourage businesses and individuals to take out loans for investment and spending, which can lead to a temporary increase in economic activity.
Long-Term disaster of This Approach:

  • Inflation spiraling out of control: If inflation rises but the Fed is forced to keep interest rates low, prices will continue to rise unchecked. Wages may not keep up with these price increases, leading to reduced purchasing power for the middle class.
  • Eroding business confidence: While low interest rates might stimulate borrowing in the short term, businesses and investors will lose confidence in the long-term stability of the economy. High inflation and uncertainty make it difficult for companies to plan investments, leading to a freeze in long-term investment activity.
  • Currency devaluation and capital flight: As inflation rises and confidence in the U.S. economy falters, the value of the U.S. dollar will weaken. Wealthy individuals and businesses will begin moving their money abroad (Yes the same people that benefits from his taxcuts to begin with), further weakening the economy.
  • Deep recession and stagflation: Ultimately, keeping interest rates artificially low while inflation increases will push the U.S. into a deep recession. The risk of stagflation—where inflation remains high but economic growth stalls—will become overwhelming. This toxic combination of high inflation and low growth could cripple the economy for decades to come.
 
So...you mostly repeated yourself. As I said, to address each of your contentions I would run into the forum's word count restrictions so I won't bother.

However, you have added two new contentions that I will address.

Tarrifs.

Trump's use of tariffs do NOT result in increased consumer prices. His first term proved that.​
​
​

Deregulation, oil and gas production and green energy.

Deregulation removes oppressive roadblocks to ALL US businesses...from big to small. This unleashed US productivity.​
​
Like it or not, fossil fuel energy is the lifeblood of the US. Restrict it in favor of the Green New Deal and you will damage/kill the country. We've already seen this play out from day one of the Biden administration, starting with the Biden puke's attacks on the oil industry and the resulting massive increase in inflation.​
​
Refer to the chart above. Notice the drops in ALL energy prices. That is a direct result of Trump unleashing our US oil industry.​
 
You're responding to points that I didn't actually focus on or address in depth.

My main argument in the previous posts was centered around Trump's tariffs, tax cuts, and his desire to control the Federal Reserve—all of which are economic policies with potential long-term consequences like inflation and stagflation. While I did briefly mention deregulation, oil, and gas production as part of Trump's broader political platform, they weren’t the core of my argument.

Your response about energy prices and deregulation seems somewhat tangential to the points I raised. You're shifting the conversation to focus on energy policy (deregulation, oil, and gas) and green energy, likely because this is an area where you feel more confident in defending Trump's policies. However, the chart you included (which lacks a clear source) supports your claim about energy prices but doesn't address my primary argument about the lack of financing behind Trump's tax cuts or the inflationary risks associated with his tariffs and his plan to control the Federal Reserve.

In short, you're focusing on energy, which wasn't central to my argument, and sidestepping the deeper critique about Trump's overall economic policies and their long-term risks.
 

We are producing more oil now than when Trump was president.
 
sigh...

I told you...twice...why I won't address all of your contentions.

How about this...you choose one of Trump's proposals and your criticism from post #5 and I'll address it.
 
Mycroft said:
sigh...

I told you...twice...why I won't address all of your contentions.

How about this...you choose one of Trump's proposals and your criticism from post #5 and I'll address it.
Click to expand...
It's a bit ironic that you’re asking me to pick just one of Trump's proposals when my argument has been that many of his policies are interconnected and have cumulative consequences—particularly when it comes to tax cuts, tariffs, and his approach to the Federal Reserve. It’s the combination of these that leads to the long-term risks of inflation, stagflation, and the ballooning national debt.
 
If Donald were to win the Presidency again, he will certainly abuse his power in order to benefit the wealthy, simply in order to benefit himself.

Much like his own financial history of poor performance and business failures, his actions would result in a long term disaster for our country. His business failures include a string of efforts that are no longer working businesses, along wit a half dozen bankruptcies. How you manage to bankrupt a business where your customers intentionally bring you cash - knowing full well they will very likely leave it with you - is a tribute to his incompetence and a question for the ages.

His poor performance is obvious, as he inherited hundreds of millions of dollars - decades ago - and a simple investment in an S&P index fund would have vastly outperformed his alleged ‘stable genius’ facade of being competent. His penchant for lawsuits is legendary if not expensive. His habit of not paying his bills has also cost him along the way, not to mention such highly questionable tactics like stealing money from a charity he started himself.

He telegraphs deep character flaws by having fake magazine covers created and displayed at his properties, ostensibly to impress visitors (more likely to soothe his fragile ego and low self esteem) and using his ‘charity’ to buy large portraits of Himself, and even referring to himself as “the chosen one”.

Beyond these, his ‘ideas’ are often ridiculous and based on ignorance. Donald continues to suggest across the board tariffs on all imported goods which would result in an immediate rise in prices and inflation. Donald describes these incorrectly as a ‘tax on foreign nations’ when they would be an immediate and devastating tax on all Americans. Our enemies would very much appreciate such a serious blow to our nation and its stability.

There is no question that another Trump presidency would result is disaster for the US economy.
 
shrug...

It's your choice. Make it...or don't.
 
BabaVoss said:
There is no question that another Trump presidency would result is disaster for the US economy.
Click to expand...
The problem, as I see it, is that he is focused on implementing policies that will boost the economy in the short term, only to then throw it into total chaos. This means that he won't be the one facing the situation when the US enters stagnation, and when the devaluation of the dollar sends the country into a deep recession while borrowing to jumpstart the economy again will be both limited and at unreasonably high costs. It will be those who come after him who will have to deal with the fallout.

Short-term effects (6 months to 2 year):
  • Boost in consumption and borrowing
  • Asset inflation
Medium-term effects (2 to 4years):
  • Rising inflation
  • Weakened currency

Long-term effects (5 years and beyond):
  • Hyperinflation risk: If the Federal Reserve is unable or unwilling to raise interest rates to combat inflation, the U.S. economy could enter a dangerous cycle of hyperinflation, where prices spiral out of control and the purchasing power of the dollar collapses.
  • Debt crisis: As inflation continues to rise, the government would find it increasingly expensive to borrow money. Investors might demand higher interest rates to compensate for the loss in value of the dollar. This would put significant pressure on the U.S. government, especially given the ballooning national debt from unfunded tax cuts.
  • Stagflation: The risk of stagflation—a combination of stagnant economic growth and high inflation—becomes a serious concern. The economy would struggle with high prices, low productivity, and rising unemployment, making it difficult to recover without extremly drastic measures.
In summary, the immediate benefits of low interest rates, such as increased borrowing and spending, could begin to show within 6 months. However, the negative long-term effects, such as rising inflation, currency devaluation, and potential stagflation, could take a few years to fully develop.
 
Yesterday, we discussed how Trump's economic policies—especially his plan to control the Federal Reserve and keep interest rates artificially low might give the economy a short-term boost, but could lead to long-term economic chaos. With rising inflation, a weakened dollar, and the government facing crippling debt, a deep recession and stagnation seem inevitable. But what we didn’t fully explore is the additional impact of the welfare cuts that Trump has already proposed or implemented and how those cuts will exacerbate the economic fallout when the recession hits.

1. Welfare Cuts Amplify Economic Hardship:​

Trump has proposed significant cuts to programs like Medicaid, food stamps (SNAP), Social Security Disability Insurance (SSDI), and housing support. These cuts, many of which are designed to go into effect before the deep recession takes hold, will leave millions of vulnerable Americans without a social safety net at the very moment they need it most. When people lose access to basic services like healthcare and food assistance during a recession, consumer spending plummets, further depressing the economy.

Without a robust welfare system, low-income households will have little choice but to drastically reduce their spending, which only accelerates the economic decline.

2. A Weak Safety Net in Times of Crisis:​

When the recession hits, the middle class will also be affected by job losses, wage stagnation, and rising living costs. But with welfare programs slashed, there will be fewer resources available to help these families stay afloat. History shows that countries with weaker safety nets tend to suffer more during economic downturns because there is less to cushion the blow for those most affected by the crisis.

This creates a vicious cycle: as more people fall into poverty, government revenues from taxes shrink, making it even harder to finance economic recovery efforts.

3. Debt Crisis and Limited Borrowing Options:​

As we talked about yesterday, by the time Trump’s policies lead to a deep recession, the U.S. government will already have ballooned its national debt through unfunded tax cuts. At this point, the government will face serious challenges in borrowing more money to stimulate the economy. Lenders will demand higher interest rates to compensate for inflation and the devalued dollar, making it incredibly expensive (and potentially unfeasible) for the U.S. to take out new loans to fund any recovery programs.

Combine that with a weakened welfare state, and you're looking at a situation where the government has neither the funds nor the social infrastructure to effectively respond to the crisis.

4. Long-term Stagnation and Widening Inequality:​

The inequality gap will widen even further, as those who relied on welfare programs will be the hardest hit. Without access to healthcare, food assistance, or housing support, poverty will deepen, while the wealthiest—who benefited most from the tax cuts—will be better positioned to weather the storm. This economic stagnation could last for years, as the lack of a functional safety net prevents recovery for a large portion of the population.

So, when the recession hits, the situation will be far worse than a typical downturn because the safety net won't be there to soften the blow. Trump's welfare cuts will leave the country vulnerable to deeper, more prolonged economic pain, and recovering from such a crisis without social support or the ability to borrow could be near to impossible.
 
The blanket elimination of taxes on tips is a particularly bad idea. High income bonuses will be treated as gratuities to avoid taxation. Unfortunately both candidates are proposing this.
 
Parallels Between the 1920s and Trump’s Economic Policies:

When discussing welfare cuts and economic policies, it's worth looking back at the 1920s, often remembered for its prosperity but which ultimately led to one of the worst economic crises in US history—the Great Depression.

During the 1920s, there was a strong push for deregulation, tax cuts, and reduced government intervention in the economy. Just like Trump's approach, these policies boosted the economy in the short term, creating a sense of stability and growth. However, they also created deep vulnerabilities:

  • Growing inequality: The wealth gap widened, with the wealthy benefiting disproportionately from tax cuts while workers faced stagnant wages and less access to social services.
  • Lack of safety nets: The social welfare system was weak, and when the Great Depression hit in 1929, there was little government support to cushion the blow for millions of Americans.
When the stock market crashed, unemployment soared, and there were no substantial welfare programs in place to help those affected. It wasn't until FDR's New Deal in the 1930s that the government introduced widespread social safety nets to stabilize the economy and help people survive.

Fast forward to 2008: While the financial crisis had a significant impact globally, social safety nets like unemployment benefits, food assistance, and government bailouts helped prevent a complete economic collapse. The U.S. recovery, though slow, was largely supported by these government programs.

Could Trump's Cuts Lead to a 1929-Style Crisis?

Trump's proposed cuts to Medicaid, food stamps, and other welfare programs echo the laissez-faire policies of the 1920s.
With no safety nets in place, a future recession—combined with high inflation and a devalued dollar—could lead to a crisis similar to the Great Depression. By gutting welfare systems before a recession hits, the U.S. could face the same problems it did in the 1930s, where millions were left without support during the worst economic downturn in history.

The question remains: Do we really want to repeat the mistakes of the past by cutting the very programs that protect the most vulnerable during times of economic hardship?
 
This is the thread to discuss it on:

I don't think you've taken the time to understand what Trump will do and what the consequences of his policies will be. If you had, no American would judge him as having the better economic policies, yet according to your own polls, you do. It's truly astonishing. And when you are surprised when yet another high-profile Republican ends their long-term career by going public and announcing they’re voting for Kamala, I understand perfectly why they do so. The long-term effects of Trump’s economic policies are devastating for the country, and they want to continue living in America more than they care about their future careers as politicians. They, not the Democrats, will be the first to leave your country if Trump wins (well they will wait for a couple of years before doing so...). It's called self-preservation.


When it comes to Kamala Harris’s policies, they are much more modest, and she doesn’t have any agenda items that would affect the controls of the economic system on a larger scale. She primarily supports economic policies focused on strengthening the middle class and improving financial conditions for working families. This approach could actually promote growth more effectively than increasing wealth among the already rich because it is more likely to boost consumption. The wealthy can, and already do, consume all they want.

Her platform often includes initiatives such as:

  1. Increased access to healthcare – she supports measures to reduce healthcare costs, both through reforms to the Affordable Care Act and proposals for federal assistance to keep insurance costs down.
  2. Investments in education – particularly aiming for free community college and expanded grants for low-income students. Harris also advocates for improvements in childcare to reduce the financial burden on families.
  3. Tax policy – Harris has emphasized her aim to increase taxes on high-income earners and large corporations while providing tax relief for middle- and low-income earners, which she believes would reduce income inequality.
  4. Sustainable jobs and green investments – she advocates for investments in renewable energy and sustainable infrastructure to both create jobs and address climate issues.
Her campaign also stresses the importance of strengthening labor rights and minimum wages and implementing economic justice measures that support diversity and include minority groups to a greater extent. So when these old-school Republican representatives go public and say they are going to vote for her, against their own political beliefs, it should tell you something. But apparently, you choose to ignore it.
 
What we need is a president who has the will to do what it takes to secure the border. We need a president who won’t cause inflation but prevent it. We need a president who will keep our country out of war.

See there I made my point without having to write a book or use AI.
 
Watch Bitcoin if he is elected.
 
---------- said:
What we need is a president who has the will to do what it takes to secure the border. We need a president who won’t cause inflation but prevent it. We need a president who will keep our country out of war.
Click to expand...
Trump's plan for tariffs will very likely reignite inflation
 
Trump doesn't have a plan. He has "wants" like a toddler. He 'wants" tax cuts for the rich because he's rich. He "wants" tariffs because his uninformed crowds cheer for it. He's thought neither of these through.

But after becoming president these laws must eventually pass congress. The Republicans will make tax cuts for the rich permanent but not for everyone else. Tariffs will be quietly dropped because they're not good for business.

Trump won't care either way because he'll get another want - to call himself president .
 
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