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Trump's Tariffs helping keep US out of a Recession
Howard Richman, 9/7/2019

The rest of the world is experiencing an economic slowdown. The graph below shows the world’s 12 largest economies. According to statistics for the most recent economic quarter, the only two whose economies are growing faster than a 1% annual rate are the United States and China.

Growth2ndQ2019.png

UK is not the only country that may have already entered a recession, usually defined as two consecutive economic quarters with negative growth. The Euro Area as a whole is growing at a miniscule 0.2%, and Germany, usually the Euro Area leader, shrank by 0.1% in the most recent quarter.

The United States is currently experiencing the longest period of economic expansion in our history, and there is no end in sight. On Friday, Federal Reserve Chairman Powell announced:

We’re not forcasting a recession….  Incoming data for the United States suggests that the most likely outlook for the United States economy is still moderate growth, a strong labor market, and inflation continuing to move back up.

The credit for the U.S. expansion in face of global slow-down largely goes to Trump’s policies, especially his reductions in business regulations, his business tax cuts and his trade policies which have striven to bring down the U.S. trade deficits.

Tariffs and tariff threats clearly help. They encourage business investment in U.S. factories, and they have a restraining effect upon U.S. trade deficits. Both factors, business investment and trade balance, affect economic growth.

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    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]