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?

[MauiMan]

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.

Yes, he will create another mess, except much worse this time.

Here’s an inconvenient truth for half of America—Trump was one of the worst Presidents in American history. He’s ranked at or near the bottom:

Historical rankings of presidents of the United States - Wikipedia

en.wikipedia.org

Historical rankings of presidents of the United States - Wikipedia

en.wikipedia.org

US Presidents Study Historical Rankings – Siena College Research Institute

scri.siena.edu

https://www.usnews.com/news/special-reports/the-worst-presidents/slideshows/the-10-worst-presidents

Biden 14th in scholars' presidential rankings, Trump last

Abraham Lincoln topped the list

ny1.com

 

[Juks]

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.

This is you discussing economic politics?


There are, of course, several other angles on why Trump’s economic “proposals,” collectively, are paving the way for catastrophe, but I’m honestly doing my best to keep it short and easy to understand. One angle I haven’t addressed yet is that three quarters of US national debt is financed by domestic actors, primarily institutions like pension funds, insurance companies, and banks. If Trump gains control over the Federal Reserve and forces it to keep interest rates low despite inflation, we’re looking at an economic domestic disaster entirely on its own. Artificially low rates would decimate the value of institutional investments in US Treasuries. Imagine pension funds, insurance companies, and banks losing their returns as inflation erodes their value. These foundational institutions would struggle to meet future pension payouts or insurance claims. The traditionally “safe” investment in US Treasuries would erode. Spooked by Americas disregard for economic independence, international investors would likely dump their holdings. Capital flight could become a reality as the dollar weakens, creating a discrepancy between the FEDs low interest rates and the rates the market demands as compensation for perceived risk.

But it’s not just the trust in Treasuries that’s on the line, the entire system of long-term savings is at risk. If pension funds buckle, how will you finance retirements? This politic could lead to a society where people are forced to work far longer because retirement funds have vanished. Runaway inflation would become uncontrollable, and the US would experience a permanent loss of economic credibility.

All to prop up short-term political moves that undermine a stable, balanced economy....

 

[pelosi4tariffs96]

Trump is the best businessman in American history, and has the best instincts, that's why he was so great at tariffs in his 1st term (something most economists have no clue how to use effectively) and why America wants his economy again.

Truth Social parent company Trump Media now worth more than Elon Musk’s X as Election Day nears

Truth Social's stock market valuation is now greater than the estimated value of Elon Musk’s X as the former president's social media network soars ahead of Election Day.

www.foxbusiness.com

 

[Juks]

Trump is the best businessman in American history, and has the best instincts, that's why he was so great at tariffs in his 1st term (something most economists have no clue how to use effectively) and why America wants his economy again.

Truth Social parent company Trump Media now worth more than Elon Musk’s X as Election Day nears

Truth Social's stock market valuation is now greater than the estimated value of Elon Musk’s X as the former president's social media network soars ahead of Election Day.

www.foxbusiness.com

Please read my posts and respond to them. We’re not holding a responsorial here, we’re supposed to present arguments for our standpoints.

 

[Gatsby]

Elon Musk, to whom Trump has promised immense power to restructure the American government, has flat-out admitted that his policies will crash the economy. Utopia will be just around the corner, of course. It always is.

 

[----------]

This is you discussing economic politics?


There are, of course, several other angles on why Trump’s economic “proposals,” collectively, are paving the way for catastrophe, but I’m honestly doing my best to keep it short and easy to understand. One angle I haven’t addressed yet is that three quarters of US national debt is financed by domestic actors, primarily institutions like pension funds, insurance companies, and banks. If Trump gains control over the Federal Reserve and forces it to keep interest rates low despite inflation, we’re looking at an economic domestic disaster entirely on its own. Artificially low rates would decimate the value of institutional investments in US Treasuries. Imagine pension funds, insurance companies, and banks losing their returns as inflation erodes their value. These foundational institutions would struggle to meet future pension payouts or insurance claims. The traditionally “safe” investment in US Treasuries would erode. Spooked by Americas disregard for economic independence, international investors would likely dump their holdings. Capital flight could become a reality as the dollar weakens, creating a discrepancy between the FEDs low interest rates and the rates the market demands as compensation for perceived risk.

But it’s not just the trust in Treasuries that’s on the line, the entire system of long-term savings is at risk. If pension funds buckle, how will you finance retirements? This politic could lead to a society where people are forced to work far longer because retirement funds have vanished. Runaway inflation would become uncontrollable, and the US would experience a permanent loss of economic credibility.

All to prop up short-term political moves that undermine a stable, balanced economy....

This is you keeping it short? lol

And yet the four years Trump was president the economy was smokin’ right along. Just look at the disaster the economy is now. Nope I go by results and ignore the long winded people trying to educate me. All they are good at is talking.

 

[Juks]

This is you keeping it short? lol

And yet the four years Trump was president the economy was smokin’ right along. Just look at the disaster the economy is now. Nope I go by results and ignore the long winded people trying to educate me. All they are good at is talking.

It is smoking right now.... 233 000 new jobs in October

 

[----------]

It is smoking right now.... 233 000 new jobs in October

No it's not. Have you been to the grocery store lately? Tried to buy a house? Most of those jobs you talk about are migrant jobs.

 

[multivita-man]

Trump's proposals:

• 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.

The imagined offset is the return of US-based supply chains and manufacturing jobs. One problem is that it would take time during which there would be higher inflation and exporters feeling some pretty intense pain, especially in agriculture. Another problem is that the US isn't really as self-sufficient as MAGA believes we are. One argument for increased domestic oil/gas production is that we'll need it in order to support a US-based manufacturing economy and supply chains in a new era of economic, political, and military conflict.

• 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.

I think sustainable energy is a myth as long as we are wedded to economic growth as the primary scoreboard. As long as we grow, we will need surplus energy in all its forms. Paradoxically, alternative sources of energy will be needed to support fossil fuel extraction, just as fossil fuels will be required to extract and process raw materials for green energy. We're moving to an era of energy portfolios, not necessarily green energy replacing fossil fuels.

 

[Juks]

The imagined offset is the return of US-based supply chains and manufacturing jobs. One problem is that it would take time during which there would be higher inflation and exporters feeling some pretty intense pain, especially in agriculture. Another problem is that the US isn't really as self-sufficient as MAGA believes we are. One argument for increased domestic oil/gas production is that we'll need it in order to support a US-based manufacturing economy and supply chains in a new era of economic, political, and military conflict.



I think sustainable energy is a myth as long as we are wedded to economic growth as the primary scoreboard. As long as we grow, we will need surplus energy in all its forms. Paradoxically, alternative sources of energy will be needed to support fossil fuel extraction, just as fossil fuels will be required to extract and process raw materials for green energy. We're moving to an era of energy portfolios, not necessarily green energy replacing fossil fuels.

It's true that tariff policies may benefit certain domestic sectors, but this comes at the expense of others, especially crucial industries like tech and the emerging AI sector, which thrive on global collaboration and imports. The larger issue, however, is the impact of combining these policies. If inflation rises sharply while interest rates are kept artificially low (through interference with the Federal Reserve), the economy will be drained of resources before domestic industry can even be built up. This risks severely weakening the US economy in the long term, leaving insufficient capital to fund any substantial domestic industrial growth.

While energy transition is complex, a deregulated energy and industrial policy clearly risks putting the US behind in technology and innovation, especially as other countries actively invest in future energy solutions. By relying on fossil fuels and disregarding sustainable energy sources, you will miss the opportunity to develop technologies that are already becoming globally dominant. In the long term, this can harm the US's economic competitiveness and its ability to participate in future technology markets.

But the issue here is not any one economic decision but rather the totality of Trumps economic policy and where it would lead if fully implemented. The end result would be a depression similar to that of the late 1920s. Trumps approach mirrors the economic conditions that led to that era's collapse and aims to recreate similar circumstances by neutralizing the factors that set our current economy apart. While this approach could bring a brief economic boost (like the "Roaring Twenties"), it would soon push the country into a severe and uncontrollable crisis.

 

[Tensor101]

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.​

​

View attachment 67536321​

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.​

Tariffs during the Trump Presidency were mainly focused on electric cars and batteries. But, his new plan is 60% across the board increase. That;s a different animal and it will increase prices, after all, it's a tax on the pruchase of something. What Mr. Trump's plan seems to be is to load the Treasury with as much cash as possible by 1. Stop funding War in Ukraine, 2. Kill Dept of Education, 3. Stop all renewable projects currently uncompleted, 4. increase tariffs on foreign made goods.

When there occurs enough cash in the Treasury, it becomes time for a corporate tax break that will favor Real Estate Investment companies. Mr. Trump will be laughing all the way to the bank while the rest of the country pays higher prices in the form of tariffs. Y/N?

 

[Juks]

Tariffs during the Trump Presidency were mainly focused on electric cars and batteries. But, his new plan is 60% across the board increase. That;s a different animal and it will increase prices, after all, it's a tax on the pruchase of something. What Mr. Trump's plan seems to be is to load the Treasury with as much cash as possible by 1. Stop funding War in Ukraine, 2. Kill Dept of Education, 3. Stop all renewable projects currently uncompleted, 4. increase tariffs on foreign made goods.

When there occurs enough cash in the Treasury, it becomes time for a corporate tax break that will favor Real Estate Investment companies. Mr. Trump will be laughing all the way to the bank while the rest of the country pays higher prices in the form of tariffs. Y/N?

The key is the takeover of the FED. If Trump were to gain control of the FED, it would politicize monetary policy, leading to unpredictable consequences for inflation, interest rates, and global confidence in the US economy. While his other economic measures, such as tariffs, tax cuts, and budget reductions, may have significant effects, it is the takeover of the FED that not only could but will create a historic economic downturn comparable to the one in the early 1930s.

So why would he do it, and will he even follow through? Yes, he will, for the same reasons politicians did so in the past: to create a temporary economic upswing. (Think "the Roaring Twenties.")

For high tariffs and the dismantling of the social safety net not to have immediate negative consequences for consumption and the economy, Trump would need to keep interest rates low. And that practically requires control of the FED.

Without low interest rates, high tariffs risk driving up import costs, fueling inflation. At the same time, tax cuts for the wealthy and cuts to social programs reduce demand from the groups that spend the largest share of their income. If the FED then attempts to raise interest rates to combat inflation, it could lead to a double blow: rising living costs and declining economic activity.

This is why Trump’s threat or promise to take control of the FED is so central. For his short-term economic policies to "look good" during his term, an artificially stimulated economy through low interest rates is necessary. But this is a ticking time bomb long-term, it risks creating a deep and unmanageable economic crisis akin to the one in the 1930s.

 

[Brack]

Nope.

We'll see.

 

[Peter]

Trump is the best businessman in American history, and has the best instincts, that's why he was so great at tariffs in his 1st term (something most economists have no clue how to use effectively) and why America wants his economy again.

Truth Social parent company Trump Media now worth more than Elon Musk’s X as Election Day nears

Truth Social's stock market valuation is now greater than the estimated value of Elon Musk’s X as the former president's social media network soars ahead of Election Day.

www.foxbusiness.com

You think Trump is the best businessman?
All his companies go bankrupt, that doesn't shout great businessman to me.

 

[BabaVoss]

No it's not. Have you been to the grocery store lately? Tried to buy a house? Most of those jobs you talk about are migrant jobs.

Are you not capable of looking at the big picture economy? If you have to resort to cherry picking to "prove" your point, you lose. By almost every measure, our economy is doing well right now.

 

[----------]

We'll see.

Yep

 

[----------]

Are you not capable of looking at the big picture economy? If you have to resort to cherry picking to "prove" your point, you lose. By almost every measure, our economy is doing well right now.

Nope.

 

[rickc]

Yes!

 

[BabaVoss]

"Are you not capable of looking at the big picture economy? If you have to resort to cherry picking to "prove" your point, you lose. By almost every measure, our economy is doing well right now."

Nope.

As I figured.

 

[----------]

"Are you not capable of looking at the big picture economy? If you have to resort to cherry picking to "prove" your point, you lose. By almost every measure, our economy is doing well right now."

As I figured.

Same for me too. I guess the "big picture" hasn't made it to the grocery store yet or the housing industry.

 

[BabaVoss]

Same for me too. I guess the "big picture" hasn't made it to the grocery store yet or the housing industry.

Focus on the price of eggs.

 

[uptower]

"Building" is too kind a word. He's taking a wrecking ball to it.