16 Nobel economists have warned that Trump will worsen America’s inflationary crisis


Inflation is public enemy number 1 in today’s economy. Americans are fed up with the cost of living, and former President Donald Trump says he’s helping.

Yet 16 Nobel Prize-winning economists have warned that Trump’s plans won’t just fail to fix inflation — they’ll make things worse.

„We the undersigned are deeply concerned about the risks of a second Trump administration to the U.S. economy,” the economists wrote in the Tuesday letter, which was first reported Axios.

The letter, organized by renowned economist Joseph Stiglitz, argued that there are good reasons to worry that the Trump agenda will „rekindle” inflation.

In particular, economists point out that Trump’s „fiscally irresponsible budgeting” and nonpartisan research from the Peterson Institute, Oxford Economics, and the Alliance that found the Trump agenda — if successfully implemented — would increase inflation.

Manuel Pauls Seneta/AP

Republican presidential nominee former President Donald Trump speaks at the Road to Majority conference, Saturday, June 22, 2024, in Washington.

Trump approved $8.4 trillion New 10-year borrowing during his tenure — twice as much as President Joe Biden has so far been in office, according to the federal budget committee, which is in charge of the financial watchdog.

Not only does Trump want to extend his 2017 tax cuts — a move the Congressional Budget Office warns would cost nearly $5 trillion — but the former president recently said the CEO during a closed-door meeting He wants to further reduce the corporate tax rate.

However, cutting taxes will boost the economy at a time when the Federal Reserve is working hard to fight inflation.

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„The outcome of this election will have economic consequences for years, and for decades, to come,” the economists wrote in the letter. „We believe a second Trump term will have a negative impact on America’s economic standing in the world and destabilize the United States’ domestic economy.”

The letter, led by Stiglitz, did not directly address Trump’s trade and immigration policies, but some prominent economists warn they could also be inflationary.

Trump has called for tariffs on China and all other trading partners — a move that has Moody’s Analytics predicted Destroy jobs and worsen inflation. Trump argues that the tariffs will save jobs and punish China for trade practices that both sides find tiresome.

Biden has kept tariffs in place for most of the Trump era and recently raised some tariffs on China in a more targeted way.

Some economists are also concerned about Trump’s plans to launch an immigration crackdown and unprecedented deportations. Heat up the job market and raise consumer prices.

JC. Hong/Pond/AP

A vehicle drives along the U.S. side of the U.S.-Mexico border wall in Nogales, Ariz., Tuesday, June 25, 2024.

In the letter, 16 Nobel economists expressed concern about the rule of law and stability if Trump wins the White House again.

„The rule of law and economic and policy certainty are among the most important determinants of economic success,” the letter says. „Donald Trump and his vagaries of action and policies threaten this stability and America’s standing in the world.”

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

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In contrast, economists praised Biden’s work on the economy, arguing that his major investments in infrastructure, manufacturing and climate would ease long-term inflationary pressures and facilitate a clean energy transition.

„While we each have different views on the details of various economic policies, we all agree that Joe Biden’s economic agenda is far superior to Donald Trump’s,” the economists wrote in the letter.

In response, the Trump campaign blasted economists and blamed Biden for high inflation.

Carolyn Leavitt, the Trump campaign’s national press secretary, said in a statement to CNN, “The American people don’t need a Nobel laureate to tell them that any president has put more money in their pockets. „Americans know they can’t deliver four more years of Bitenomics, and when President Trump returns to the White House, he will re-enact his pro-growth, pro-energy, pro-jobs agenda, lower the cost of living, and raise all Americans.”

Of course, economists don’t have a crystal ball, not even Nobel Prize winners.

And voters give Trump high marks on the economy.

As CNN’s Harry Enton reported, average polls have Trump ahead of Biden by 18 points on inflation and 13 points on the economy.

In an ABC News/Ipsos poll in May, More than 80% of the respondents The economy and inflation are key in determining their vote — and on both counts. Trump leads Biden by 14 points.

Voters have made clear their concerns about Biden on the economy. Just 34% of Americans approve of Biden’s economic policies A CNN poll in late April Even fewer (29%) approve of Biden on inflation.

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Still, some experts worry about what Trump’s policies will mean for the economy.

Last week Moody’s Analytics warned that if Republicans take office in November, a toxic mix of higher tariffs, fewer immigrants and tax cut stimulus could accelerate inflation again, cause unemployment to rise above 5% and the US economy to falter. Depression.

By contrast, Moody’s finds that if Biden wins and there is a divided Congress, the Fed will start cutting interest rates, inflation will return to normal and the U.S. economy will avoid recession.

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