Trump Would Make America’s Inflation Crisis Worse, 16 Nobel Economists Warn

In today’s economy, inflation is the public enemy number one. Americans are fed up with the high cost of living, and former President Donald Trump promises to assist.

However, 16 Nobel Prize-winning economists warn that Trump’s policies will not only fail to address inflation but will exacerbate the problem.

“We, the undersigned, are deeply concerned about the risks of a second Trump administration for the US economy,” the economists said in their Tuesday letter, which Axios first reported.

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Trump Would Make America’s Inflation Crisis Worse, 16 Nobel Economists Warn

The letter, spearheaded by renowned economist Joseph Stiglitz, stated that there are legitimate concerns that Trump’s plan may “reignite” inflation.

The academics specifically point to Trump’s “fiscally irresponsible budgets” and nonpartisan studies from the Peterson Institute, Oxford Economics, and Allianz, which conclude that the Trump program, if implemented, will boost inflation.

According to the Committee for a Responsible Federal Budget, Trump has approved $8.4 trillion in new 10-year borrowing during his term, about twice as much as President Joe Biden has thus far.

Not only does Trump want to extend his 2017 tax cuts, which the Congressional Budget Office estimates will cost over $5 trillion, but the former president also told CEOs in a closed-door meeting that he wants to lower corporate tax rates even further.

However, lowering taxes risks speeding up an economy at a time when the Federal Reserve is working hard to slow it down to combat inflation.

“The outcome of this election will have economic repercussions for years, if not decades,” the economists wrote in their letter. “We believe that a second Trump term would have a negative impact on the US’s economic standing in the world and a destabilizing effect on the US’s domestic economy.”

The Stiglitz-led letter did not directly mention Trump’s trade or immigration plans, but several mainstream economists worry they will also be inflationary.

Trump has asked for higher tariffs on China and all other trading partners, which Moody’s Analytics predicts will destroy jobs and increase inflation. Trump claims that tariffs will save jobs while punishing China for trade abuses that both parties are fed up with.

Biden has maintained the vast majority of Trump-era tariffs while recently lifting some tariffs on China but in a more targeted manner.

Some economists also fear that Trump’s intentions to undertake an immigration crackdown, including record deportations, will overheat the labor market and raise consumer prices.

In their letter, the 16 Nobel laureates expressed concern about the rule of law and stability if Trump is elected president again.

“Among the most important determinants of economics success are the rule of law and economic and policy certainty,” according to the letter. “Donald Trump and the vagaries of his action and policies threaten this stability and the US’s standing in the world.”

Beyond Stiglitz, the letter was signed by Robert Shiller, who notably predicted the mid-2000s housing bubble, Paul Romer, former World Bank head economist, and George Akerlof, the husband of US Treasury Secretary Janet Yellen.

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Trump Would Make America’s Inflation Crisis Worse, 16 Nobel Economists Warn

Economists, on the other hand, praised Biden’s economic efforts, stating that his substantial investments in infrastructure, manufacturing, and climate will reduce long-term inflationary pressures and facilitate the transition to sustainable energy.

“While each of us has different views on the particulars of various economic policies,” the letter’s authors said, “we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s.”

In response, Trump’s team slammed economists and blamed Biden for soaring inflation.

“The American people don’t need worthless out-of-touch Nobel Prize winners to tell them which president put more money in their pockets,” Karoline Leavitt, the Trump campaign’s national press secretary, said CNN. “Americans know we cannot afford four more years of Bidenomics, and when President Trump is back in the White House, he will reimplement his pro-growth, pro-energy, pro-jobs agenda to bring down the cost of living and uplift all Americans.”

To be sure, both economists and Nobel Prize recipients have a crystal ball.

And voters give Trump stronger scores for the economy.

According to CNN’s Harry Enten, the average of surveys shows that Trump is leading Biden by 18 points in inflation and 13 points in the economy.

In a May ABC News/Ipsos poll, more than 80% of respondents said the economy and inflation were major factors in their vote, with Trump leading Biden by 14 points on both subjects.

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Trump Would Make America’s Inflation Crisis Worse, 16 Nobel Economists Warn

Voters have expressed worries about Biden’s economic policies. In a late April CNN poll, only 34% of Americans supported Biden’s economic policy, and even fewer (29%) supported Biden’s stance on inflation.

However, other analysts are concerned about what Trump’s ideas may imply for the economy.

Last week, Moody’s Analytics warned that if Republicans win power in November, a toxic combination of higher tariffs, fewer immigrants, and tax cut-fueled stimulus will force inflation to reaccelerate, unemployment to rise beyond 5%, and the US economy to enter a recession.

In contrast, Moody’s discovered that if Biden wins and Congress is divided, the Fed will decrease interest rates, inflation will return to normal, and the US economy will avoid a recession.

SOURCE – (CNN)