Economists previously warned that if inflation is kept high for too long, it risks “hyperinflation.” If Trump is elected, he has plans to shake up the U.S. economy. Here are the possibilities.
Interest Rates Kept Too High For Too Long
Economists have previously expressed their concern about the inflation rate. A prolonged high interest can lead to job loss, economic imbalance, and possibly recession.
Not a Hot Economy
Jerome Powell has reassured us that the inflation rate is doing well and steadily ”cooling off.” In a comment, he told CNN, “This is no longer an overheating economy.” The economy had done worse in 2022 when prices were extremely high, but remained “resilliant.”
More Jobs
In June of this year, CNN reported that around 200,000 new jobs were created. Powell confirmed that the economy is “balanced.”
Balanced but Not Enough
Even when the economy is balanced, the balance will weaken if rates are too high or restricted. Joe Brusuelus, a chief economist at RSM, told CNN once an unbalanced economy occurs, it can lead to unemployment.
Corporate Tax to 15%
In an interview, Donald Trump mentioned that if he won the 2024 U.S. presidential election, he would bring the corporate tax rate to 15%. At the moment, the corporate tax stands at 21%.
Make America Great Again!
One of the many things in Trump’s mission to make America great again (MAGA) is getting the economy healthy. According to Bloomberg, it also includes tweaking business trades and imposing tariffs on Chinese imports.
Tariff Rates Under Trump Law
Bloomberg reported that Trump would impose import tariffs on all goods made in China at 60% and other imports at 10%.
Duty on Car Imports
100% car import duty is what Trump intends to instill if he wins the November elections. Analysts have described the process as “trade wars,” according to Bloomberg reports. Trade wars are bound to increase prices for the consumer, they said.
Tariff Increases = Consumer Price Increases
Bloomberg analysts say that if further tariffs are imposed on imported products, consumer prices on goods could increase by about 2.5%.
Jerome Powell To Stay in Office
The current Chair of the Federal Reserve Bank, Jerome Powell, will reportedly stay in his position as chair of the Fed should Donald Trump win the elections. According to Bloomberg, Trump said that Powell should remain to complete his term in office until 2026.
Looking Towards a Better Future and Economy
According to reports, polling shows a slight shift with American Hispanics and African Americans supporting the republican party.
According to Polls
Pew Research shows that even though a majority of Black and Hispanic voters support current U.S. president Joe Biden, there’s been a slight switch. About 20% of black men are in support of Trump for the election.
Support for Democrats Vs Trump
However, according to Pew Research, amongst registered black voters, their support for the democratic party and Biden stands at about 77%, with the balance supporting Trump and the Republican Party. With Biden dropping out of the election race, it remains to be seen if these statistics would change with Kamala Harris leading the Democrats.
Economy: Good on Both Governments?
The Washington Post reported that both governments positively contributed to the U.S. economy.
Under Former Trump Government
Trump “inherited a lukewarm economy,” but to repair the situation, large-scale tax cuts were implemented, as well as an increase in government spending. As a result, new jobs were booming until covid saw as many as 23 million U.S. people lose their income.
Under the Biden-Harris Administration
Biden took over during the pandemic and had to deal with the repercussions of the pandemic. However, he initiated government spending, and more people got jobs when covid restrictions were lifted. According to reports, as many as 15 million new jobs were created.
Worst Inflation in Decades
Many U.S. households and businesses are struggling as America faces the worst inflation in over 40 years, the Washington Post reported.
Trump VS Biden Inflation
Reports suggest that under Biden’s government, while wages were higher for American workers at 19.2%, the inflation rate steadily increased and stood at 19.4%. Compared to Trump’s government, wages were lower at 15.4%, but inflation remained low at 7.8%.
Consumers Remember Better Days
Consumers are said to remember “spending less” on essential goods and services during the Trump administration.
Both Sides Have Downfalls
People are critical of both the Democratic and Republican parties. However, there’s still plenty of time to make an impact and change the voter’s opinions before going to the polls on November 5, 2024.
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Featured Image Credit: Shutterstock / Jonah Elkowitz.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
