Whenever there is an election campaign, the war of words start among the candidates. History has it that the election candidates in their war of words have gone to such an extent that it has completely demeaned the character of an election candidate. But, who cares as the main objective of each candidate in the election is to just win, win and win.
And the latest example of character assassination Donald Trump, who was recently called a “phony” Mitt Romney. The use of term “phoney”, the latter means that the former holds the destructive potential of causing a recession in the U.S. economy.
Adding more fuel to the fire, Romney said, “His domestic policies would lead to recession. His foreign policies would make America and the world less safe. He has neither the temperament nor the judgment to be president,”
He clearly feels that Donald Trump “has a kindergarten view of economics” and doesn’t even know about the very essence of the economy to run it well. “The stuff that comes out from his mouth just astonishes me.”
The question is, is Mitt Romney right? Could Donald Trump’s plans actually send the U.S. economy crumbling into a recession? Let’s take a look at his economic policies and the possible flaws that can lead to such a travesty:-
Relations With China And Mexico
On several occasions, Donald Trump has threatened to raise the tariff rates by almost 45%. This naturally affects countries that have trade relationships with America. Chief among these affected nations are China and Mexico. Business circles fear that Trump’s plans will jeopardize trade relationships with China and Mexico, and subsequently may even lead to a rise in tension between these nations.
“One of [Trump’s] themes is we’re going to give it to China, et al. If we get into a trade war, that’s not good for the markets or the economy,” says Bob Doll, chief stock strategist at Nuveen Asset Management.
A big majority feels that Mr. Trump can get quite unpredictable at times. This causes business leaders and investors to end up in a situation that is filled with endless uncertainties. You must understand that it is not entirely favorable for all since businessmen like to remain in control of what they own. However, Trump’s unpredictability causes people to trust, invest and subsequently spend less.
“The simple answer is the market is going to get worried or have its uncertainty concerns anytime there is a non-establishment candidate,” says Jason Pride, director of investment strategy at Glenmede.
U.S. Population Shrinking
We are well aware of Trump’s intentions to deport more than 11 million undocumented immigrants off from America. This would cause a three percent decrease in the U.S. population. The strength of workers that subsequently powers the economy will get affected, as well. This can end up being a big hit to the U.S. economy.
Rising National Debt
Mr. Trump’s tax policies aim toward helping Americans save more money by paying less tax. However, this idea can cause the national debt to go skyrocketing into recession. An analysis conducted by the Tax Policy Centre has predicted an addition of $9.5 trillion to the national debt in the first decade itself. This figure is terrible for any economy. In the beginning, the growth rate would remain at its peak; however, over time, the debt would eventually end up choking the growth rates.
Ending his speech, Romney warned: “If Donald Trump’s plans were ever implemented, the country would sink into a prolonged recession.”