Yahoo Finance Nobel Prize-Winning Economists Worried Second Trump Term Could ‘Reignite’ Inflation
Sixteen Nobel prize-winning economists released a grave warning in a joint letter on Tuesday, detailing a potential economic fallout if former President Donald Trump wins the White House in November.
“We the undersigned are deeply concerned about the risks of a second Trump administration for the U.S. economy,” the letter began, which was published in full by CBS News. The economists wrote that it was imperative for the United States, which is “embedded in deep relationships with other countries,” to maintain “normal and stable relationships with other countries.”
“Donald Trump and the vagaries of his actions and policies threaten this stability and the U.S.’s standing in the world,” they continued. “While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s.”
“During Joe Biden’s presidency we have also seen a remarkably strong and equitable labor market recovery — enabled by his pandemic stimulus. An additional four years of Joe Biden’s presidency would allow him to continue supporting an inclusive U.S. economic recovery,” the experts explained. “There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets.”
If reelected in November, Trump has vowed to implement a 10 percent tariff on all imports and raise the tariff rate on Chinese-made goods to 60 percent or more. The former president has also indicated that he may pressure the Federal Reserve to lower interest rates. Economists and analysts have warned that his proposals could lead to a tax increase for American consumers and re-inflate prices.
Trump has also threatened mass deportation throughout his campaign, which many economists say that along with devastating the U.S. workforce and families, the proposal could exacerbate inflation and lead to labor shortages in crucial industries such as construction and agriculture — causing costs for consumers to spike.
The letter published Tuesday was signed by Nobel winners George A. Akerlof, Sir Angus Deaton, Claudia Goldin, Sir Oliver Hart, Eric S. Maskin, Daniel L. McFadden, Paul R. Milgrom, Roger B. Myerson, Edmund S. Phelps, Paul M. Romer, Alvin E. Roth, William F. Sharpe, Robert J. Shiller, Christopher A. Sims, Joseph E. Stiglitz, and Robert B. Wilson.
The economists ended their message with a final note: “The outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world and a destabilizing effect on the U.S.’s domestic economy.”
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