No. of Recommendations: 7
Interesting Economy Wrecker commentary. I think we are going to stumble our way into inflation and/or recession.
SNIPPEE
Here are my (Dean Baker) eight favorite economy wreckers, in no particular order:
1. Stock market crash - likeliest, P/E ratios are near 90s peak bubble
2. Mass deportation - not certain to happen, will make prices soar if it does
3. Tariffs run wild see(A)below
4. Pandemic wipe out - problem only if highly contagious and severe
5. Global warming disasters & LA Fire - big hit if insurance companies stop insuring areas
6. Splurge of spending cuts - 7% of GDP cut to Gov budget = Great Recession
7. Debt limit crisis - higher interest and gov debt costs
8. Messing with economic data - Trump fires people to get better numbers, disaster for financial markets and economy.
(a)
As a simple approximation, our goods imports come to roughly $4 trillion a year, or 13 percent of GDP. If we imposed an import tax of 20 percent, we would be paying $800 billion a year ($6,000 a family) as a result of the tariffs. (This assumes no reduction in imports, which clearly would not be the case.).....As with mass deportations, this would directly push inflation higher, in addition to pulling money out of our pockets. If the Fed raised rates in response, we again would face a serious risk of recession.
https://cepr.net/publications/can-trump-tank-the-b... 