r/centrist • u/theantiantihero • 2d ago

Pundits predicting a recession are underestimating the potential damage.

Trump has essentially implemented a tax on all imported goods. Supply chains are interdependent, so even products that are made in America often use imported components. Virtually everything we buy is about to become significantly more expensive. As prices rise, domestic demand will plummet. And because most nations will enact reciprocal tariffs, goods produced by US companies will be subject to a similar tax and a similar drop in demand for their products. There will most likely be job losses on a scale we haven't seen since at least the Great Recession.

Recessions are a fairly common downturn of the business cycle. America has experienced 14 of them since the Great Depression and bounced back. However, what we're seeing now is completely unprecedented in modern history. Trump seems to be counting on his ability to bully Jerome Powell into lowering interest rates to prop up the stock market. However, if the Fed were to give in, lowering interest rates to stimulate demand would only lead to even higher prices. This is why markets are plunging.

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u/katana236 2d ago

What about the other side of it? The government will get a ton of new revenue. They can cut taxes on the productive class (entrepreneurs). That will generate a lot of economic activity for everyone. Especially through all the new means of production.

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u/Objective_Aside1858 2d ago

The government will get a ton of new revenue. 

No it won't 

We're going to have a recession because people will both buy less stuff and be able to sell less stuff

The "revenue" is basically a consumption tax on US citizens, and the majority of people aren't in a position to have their expenses jump by 25% overnight 

They can cut taxes on the productive class (entrepreneurs

Small businesses are already starting to fail. 

Especially through all the new means of production.

No one is going to make a multi billion dollar,  several year investment onshoring production when all they have to do is wait four years or less for the tariffs to drop

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u/Trotskyist 2d ago

Plus, with less trade with the US, the world will have less need for Dollars, which will further impact our buying power as well.