Nobel laureates warn: Trump's second term could spike inflation
Axios reports that sixteen Nobel Prize laureates in economics warned in an open letter that a second term of Donald Trump would lead to a resurgence of inflation and lasting damage to the US economy. The economists believe that Joe Biden's economic program is significantly better.
8:32 AM EDT, June 26, 2024
The Nobel laureates expressed concerns that a second term of Donald Trump could negatively affect the US economic position and destabilize the national economy. In a letter released on Tuesday, they wrote that such a scenario would likely boost inflation due to Trump's fiscally irresponsible budgets. The document was initiated by Joseph Stiglitz, former chief economist of the World Bank and 2001 Nobel Prize laureate.
Nobel laureates call Donald Trump's ideas "unrealistic"
According to the Nobel laureates, many Americans are concerned about inflation, which, although decreasing rapidly, could rise again under Trump's administration.
Axios quoted the letter's signatories as also stating that despite differences in evaluating the current president's economic policy, his program is significantly better than Trump's plans.
George Akerlof, Angus Deaton, Claudia Goldin, Oliver Hart, Eric S. Maskin, Daniel McFadden, Paul Milgrom, Roger Myerson, Edmund Phelps, Paul Romer, Alvin Roth, William Sharpe, Robert Shiller, Christopher Sims, and Robert Wilson signed the letter.
The letter highlighted several questionable proposals from Trump, including tax plans to extend or increase tax cuts from his first term, favoring the wealthiest. These actions could increase the US debt by over 4 trillion dollars. Trump even suggested abolishing income tax altogether and replacing it with tariffs on imported products, which experts deem unrealistic.
Other controversial proposals from Trump include implementing universal tariffs on all imported goods and 60% tariffs on products from China. For comparison, Biden's program proposes, among other things, introducing a minimum 20% tax on wealth over 100 million dollars, raising the corporate tax rate from 21% to 28%, and increasing the child tax credit to 3-3.6 thousand dollars per child.
Over the past two years, the annual CPI inflation rate in the US has fallen from 9.1% to 3.3% in May, while the core PCE index stands at 2.75% and still exceeds the 2% target set by the central bank. Despite the decrease in price growth, solid economic growth, low unemployment, and rising wages, most Americans have a negative view of the state of the economy, blaming Biden for the inflation. However, according to a recent Fox News poll, Biden's economic policy evaluations are improving. Although more voters still trust Trump more than Biden on financial issues, his lead has decreased from 13 to 5 percentage points over the past month.
