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riversedge

(69,730 posts)
Sat Aug 8, 2020, 08:47 AM Aug 2020

Nobel economist has done the math-the risk Trump & McConnell pose to the economy is 'terrifying'





Nobel economist says he’s done the math — and the risk Trump and McConnell pose to the economy is ‘terrifying’

https://www.rawstory.com/2020/08/nobel-economist-says-hes-done-the-math-and-the-risk-trump-and-mcconnell-pose-to-the-economy-is-terrifying/

Published 2 hours ago on August 8, 2020

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But with that federal aid having expired, Krugman adds, the “coronavirus slump” could deepen and go from bad to worse.


“The suffering among cut-off families will be immense, but there will also be broad damage to the economy as a whole,”
Krugman warns. “How big will this damage be? I’ve been doing the math, and it’s terrifying.”

The economist continues, “Unlike affluent Americans, the mostly low-wage workers whose benefits have just been terminated can’t blunt the impact by drawing on savings or borrowing against assets. So, their spending will fall by a lot. Evidence on the initial effects of emergency aid suggests that the end of benefits will push overall consumer spending — the main driver of the economy — down by more than 4 %…. The expiration of emergency aid could produce a 4% to 5% fall in GDP.


According to Krugman, the coronavirus pandemic decreased GDP by “around 10%” in the U.S. — and without help for the unemployed, it will fall even more.

“What we’re looking at now may be another shock, a sort of economic second wave, almost as severe in monetary terms as the first,” Krugman argues. “And unlike the pandemic, this shock will be entirely self-generated, brought on by the fecklessness of President Trump and — let’s give credit where it’s due — Mitch McConnell, the Senate majority leader.”




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Nobel economist has done the math-the risk Trump & McConnell pose to the economy is 'terrifying' (Original Post) riversedge Aug 2020 OP
This message was self-deleted by its author Chin music Aug 2020 #1
They don't care about the demand side of the equation any more, gab13by13 Aug 2020 #2
Once again, Trump is too stupid to help himself. chriscan64 Aug 2020 #3

Response to riversedge (Original post)

gab13by13

(20,875 posts)
2. They don't care about the demand side of the equation any more,
Sat Aug 8, 2020, 09:25 AM
Aug 2020

I heard Fed chair Powell say that central banks were at the ready to pump trillions of dollars into Wall Street. The stock market is still rising for a reason. If I picked a homeless person from under a bridge and gave him 2 million dollars, if someone asked him how he was doing economically, I'm guessing he would say great. That's why Wall Street is still booming. Interest rates are as low as they can go unless we go negative but I wouldn't put it past them to do that.

When farmers lost their soy bean and pork markets Trump simply gave them billions of dollars to keep their vote. He has also given money to other industries. Corporations need taken care of. Did I mention that Trump just froze the wages of postal workers?

chriscan64

(1,789 posts)
3. Once again, Trump is too stupid to help himself.
Sat Aug 8, 2020, 11:06 AM
Aug 2020

His plan to run for reelection on the economy was 86'ed by the pandemic. Instead of really dealing with it, he chose to dismiss it thinking he could just tell people the pandemic was handled so get back to work and get "his" economy back. When the extended unemployment benefits expired, he could have used his influence over republican senators to get 4 or 5 of them to vote with Democrats to pass the House bill and prevent an even worse economic downturn. Instead he chose to stonewall and try to do something with executive orders so he could say he did it on his own. He can sign orders, but it will not work and "his" great economy will resemble 1930's bread lines.

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