J. Tankersleys Article About the Economic Situation in US

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J. Tankersleys Article About the Economic Situation in US

Even though under the Trump administration there has been some improvement in traditional economic indicators such as employment growth, increase in the number of jobs and decrease in unemployment, in the long term, the US economy faces a protracted crisis. This, in particular, is noted by Jim Tankersley in his article, published recently in The New York Times. The author claims that the United States experiences the worst economic situation in about 75 years (Tankersley, 2020). Trumps approach, already preparing for a new election race, shocks observers, as Tankersley rightly notes in his article. One gets the impression that he does not care much about the need to find ways out of the crisis. Instead of offering a comprehensive plan for discussion and a reasonable compromise between Democrats and Republicans, the President is proposing costly and macroeconomically ineffective measures. The article notes that Trumps proposals are populist.

While promoting his achievements in boosting the American economy, Trump argues that the US economy is at its best in the history of the country. He believes that this is a direct consequence of his policies. However, the presidents rosy promises do not help citizens in real improving their well-being (Tankersley, 2020). Democratic economists are trying to prove that this result was achieved not thanks to, but despite the presidents policy, and its consequences will be extremely grave.

Meanwhile, the author cites expert opinions that a powerful recession in the economy may begin before the next presidential election, and experts are increasingly criticizing Donald Trump. Trade wars hit the American business, and tax reform failed to increase the income of the population, analysts say. At the same time, the growing national debt and budget deficit require new cash injections.

The rationale behind Trumps corporate tax breaks is simple: they should stimulate the development of companies that not only increase output but also create new jobs. This approach  tax cuts for corporations and wealthy people  have been used dozens of times over the past eighty years. The logic behind Trumps explanations is that tax cuts will cause companies and citizens to earn so much that the total amount of taxes paid will not decrease, but even increase. This means that it will be possible to increase government spending without increasing the budget deficit. However, Trump, unlike his predecessors, did not cut budget spending in proportion to the shortfall in revenues. Spending on health care and education fell, while spending on defense and infrastructure rose.

It is usual now to say that the 2020 crisis is unique, special, and unprecedented in modern American history, and one can agree with this point of view. Along with the usual cyclical economic recessions, the United States from time to time goes through much rarer, but more acute systemic cataclysms. For example, the era of the Great Depression (1929-1933) should be attributed to systemic crises. Another such shock was the period of the seventies of the last century, which included the oil shock of 1973, the defeat in Vietnam, Watergate, and the mid-decade stagflation.

America responded to the first crisis in the form of Roosevelts New Deal, and the second  in the form of Reaganomics. It is important to note that in both cases, overcoming the systemic crisis required much more than just restoring economic growth. Both Roosevelt and Reagan contributed to the restructuring of the American economy, offered their fellow citizens a new social contract, and drastically changed their foreign policy. However, Trump did not undertake such efforts  on the contrary, his economic policies further contributed to the deepening of the systemic crisis catalyzed by the COVID-19 epidemic, the trade war with China, among other problems. In this context, the article by Tankersley, despite the lack of proper depth of research, raises important questions about the prospects for the American economy shortly right on the eve of the new presidential election in the United States.

References

Tankersley, Jim. Does Trump Want to Save His Economy? The New York Times, 2020, Web.

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