Minute Statistics

[hermansia12]

10th November, 2016


That moment when Simpsons Predicts the future...

But what does Trump Have to do with Economy?

Short Answer, EVERYTHING; But in particular:

- His economic policies may act as a “Test” of whether large budget deficits will be good for the economy, esp. one that has been experiencing relatively slow growth
- Proposal of large budget deficit -> Cutting taxes, Increased spending on infrastructure and military;
-Increasing tariffs on Chinese Exports (45% tariff)
-Risk of increasing interest rates and inflation -> Dampen the intentions of the increased spending and move towards deficit budget
-Retaliation effect as result of tariffs(decrease in US aggregate demand-> slowing down economic growth) as China buys 18% of US exports
-Tax cuts mainly to the higher earning population -> Widen the income inequality gap which could stifle long term growth and lower overall quality of life (Lower income earners will have less propensity to spend leading to lower aggregate demand)
-Economists concerned that this combined may lead to recession in 2019 (Reflected in speculator confidence as stocks dropped when it was apparent Trump may win election)

Articles Summarised:
http://www.smh.com.au/business/world-business/can-budget-deficits-be-good-for-the-economy-well-soon-find-out-under-trump-20161109-gsm0i4.html

http://www.smh.com.au/comment/the-consequences-of-a-donald-trump-win-are-disastrous-for-the-australian-economy-20161108-gsl5dj.html


What do you guys think about Trump being president and the effects on the economy? Comment in the thread I am curious about your opinions!