The Economy
What will happen to the economy if Donald Trump becomes president again?
To help Mr. Trump get into the White House one way or another, his campaign will blame Biden for “runaway inflation and crazy socialist welfare spending to help the illegal immigrants.” Actually, the inflation number is at about 3.3%, about the lowest in the world. However, it’s easy to blame any increase on Biden by saying that “It happened on your watch.” If a hurricane hits Miami or a volcano erupts in Oregon, is it the fault of the sitting president?
The real issue is how the president handles the situation. Inflation has been a disease since 1790. At that time gold was less than $20 per ounce. It’s now $2,320. A gallon of gas cost 17 cents when I was young. Inflation has eaten away at the economy since 1790. A few people still alive can remember when it cost a penny to mail a postcard and that included the cost of the card itself.
The prior Trump administration addressed the economy with reduced taxes so that the middle class received about $1,400 in benefits which gave them some extra money to counter inflation, but the rich received about $60,000 each. However, the middle class hasn’t complained. They don’t seem to care about what the rich corporate donors received in “payback” benefits to offset their political donations, so long as the middle class “got a break.” They are not economists. Even the dumbest economist will tell you that because of the tax reductions of the Trump administration the national debt was increased by $8,100,000,000,000 (EIGHT TRILLION ONE HUNDRD BILLION!). “What’s that to me?” you may ask. It is a debt, like a mortgage that you are passing on to your children and grandchildren. Each person in the country has a debt of between one hundred thousand and one hundred and thirty thousand dollars. We all pay interest on the national debt when we pay our taxes. About 40 cents of every tax dollar goes just to pay the interest on the national debt. Only the funds that are left are available to the military to pay for defense, the government, its’ bureaus like the State Department, the FBI, and the IRS, the Courts, the Border Patrol, and immigration, maintaining the infrastructure of roads, bridges and tunnels, the subsidies to industry, plus Medicaid, Medicare and Social Security shortfalls, with about thirteen safety net social programs plus foreign aid. To maintain our lifestyle, we ultimately will have to increase taxes.
If we don’t try to reduce the national debt, we will get fewer benefits for our tax dollars. This is why Mr. Trump and his MAGA crowd keep talking about reducing the so called “socialist” benefits that we pay out. They are referring to Medicaid, Medicare, Social Security, and other programs designed to be a safety net to help us all. Maybe we can get the wealthy corporations to pay their fair share, but they usually are able to lobby and buy their way out of this obligation with hidden political donations. So, there you have it. Increasing the national debt is a cause of inflation. The greater the debt, the lower our international credit rating gets, the higher the interest rate will be on it. With irresponsible tax cuts we tend to spend more than we take in. Inflation is also caused by supply chain issues, increases in the costs of labor, foreign imports and raw materials and corporate greed. Handouts during the pandemic contributed to inflation by flooding cash into the marketplace without adequate controls. Then there is outright personal greed and corruption. Compare your income to what the CEO’s are grabbing from public corporations. They pay off the board of directors with large fees and in return get huge salaries, wild bonuses, and other significant benefits. Many of these CEO grifters get large stock options which create capital gains at a low tax bracket, or they just borrow money, tax free, instead of showing taxable income. Their tax rates are probably lower than yours, but they have multiple homes, get around in private jets, limos, foreign sports cars, and mega yachts and want to cut Medicaid, Medicare, and your Social Security. Expect emergency rooms to close and nurse run clinics will require a credit card before they treat you. The qualifying age for Social Security, which is money that YOU PAID in, will probably be increased to 70 and the benefits will be reduced. The average person will have a tough time retiring on it and may be forced to move in with the kids.
Venezuela was a very rich country. Its’ oil fields and natural gas deposits are extensive, maybe the largest in the world, yet it is suffering from the worst inflation, 56% per month. Over time it comes to one million percent. Why? Probably because of the instability of the government which changed from a democracy to a dictatorship and is rife with corruption. The country’s assets are being stolen. Venezuela is now poor. Believe it or not, we are facing a comparable problem with the future possibility of corrupt policies to maintain political power.
Argentina is also a country with rich mineral assets, but it continued to spend more than it took in, creating a fiscal deficit which caused a 100% inflation rate, which in turn caused Argentina to default on the payment of its national debt nine times, which resulted in a very high interest rate on the debt. They are now confronted with austerity and the reduction of their pension payments, loss of government subsidies, loss of personal savings and the devaluation or disappearance of their peso.
Right now, inflation in the U.S. is about 3.3%. The Federal Reserve, which is independent of the government would like the inflation rate to be 2% and will keep interest rates high in order to cool down the economy. However, they will probably reduce the interest rate at their September meeting, which should make housing, apartment rentals, car and major purchases and gasoline a little less expensive and should help Biden and the democrats. Unemployment is low, well under 4%. The job market is good. The price of gasoline is down from $3.65 a year ago to $3.07 this morning at Costco. The food basket which cost $100 five years ago now costs $120. Which is a 4% per year increase. However, wages have gone up about 5% per year. Remember, in 2009 the minimum wage was $7.25. It’s now almost double. Still, workers should not have to exist paycheck to paycheck and food prices must be reduced.
The American economy is probably the strongest in the world. Our output is 40% better than China, way better than Russia, and beats out European countries including Great Britain.
If Mr. Trump gets elected you can expect a tax reduction, benefitting mostly the very rich, increases in prices, a reduction of Social Security benefits, privatization of Medicare and Medicaid with deductibles and copayments, higher drug costs, relaxation of restrictions on health insurance companies, closing of emergency rooms and nurses substituting for doctors. Families will have to chip in to pay for grandpa’s retirement and medical bills and surgery. There will be little tolerance of unions. The minimum wage rate will be stabilized. That is, not be increased.
The bottom line is that the rich and powerful Trump supporters will do quite well. The middle class will “survive.” And the poor will pretty much be on their own because Donald trump believes that “They don’t vote anyhow.”
GOD BLESS OUR WAR HEROES AND GOD BLESS AMERICA!