Our Democracy May Not Be The Only Thing At Risk

Have You Seen Trump's Economic Plan?

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Most sane and critical-thinking people understand that Donald Trump is a threat to our democracy. This has become obvious from a wide range of evidence from Project 2025 to the fact that his cognitive decline places us all in danger should he ever be led by the hand into the White House by the right-wing conspiracy nut-job Laura Loomer. The people surrounding Trump are as concerning as the aging narcissist himself.

Since the debate, however, I’ve been thinking about not just what a threat Trump is to our democracy but also what a huge threat he is to our economy. I find it both hilarious and counterintuitive that in poll after poll, respondents rate Trump higher on the economy than they do Biden or Harris. What bottle are they sniffing?

The common reason given for this false impression about the economy is inflation, for which most poll respondents blame Biden. The post-COVID economic rebound did result in fast-rising prices due in part to supply chain problems. But what most people seem to overlook is that the economic crash caused by the COVID shutdown and subsequent inflation was also exacerbated by Trump’s tariff policies.

A rational examination of Trump’s behavior and decisions or indecisions during the COVID crisis and the resulting impact on the economy should make Biden’s positive economic performance obvious. We are way better off today than we were four years ago. Trump’s spin machine is working overtime to convince low-information voters the opposite.

But looking at where we are now in 2024, it should be terrifyingly obvious that Trump’s stated economic policies for a supposed second term would be catastrophic not only to the nation but to the whole world. I’d like to look at three proposals Trump has pushed during this campaign and show the devastating results these policies would have on the economic system.

They are tariffs, taxes, and immigration. Unlike many other issues, we know where Trump stands on these three. Trump vacillates like a loose water hose on the issue of abortion, but he has been uncharacteristically consistent on tariffs, taxes, and immigration. So, let’s dive in.

TARIFFS

According to Goldman Sachs economists led by Ronnie Walker, projected prices on consumer goods go up by 0.1% for every percentage increase in the effective tariff rate and raise inflation rates for one year. That is what we saw in 2021, and President Biden didn’t rescind all the tariffs, which led to inflation.

Here is what Trump is proposing for his second go-around. Trump has proposed raising tariffs by 10% globally and by 60% on goods imported from China, up from approximately 1% and 11% now, according to data from Wolfe Research cited by Barrons.

What does all of that economic gobbledygook mean? According to Moody’s projection, Trump’s tariff plan would reduce 675,000 U.S. jobs and increase unemployment by 0.4%. Moody’s chief economist Mark Zandi told CNN, “If Trump increases tariffs as he has proposed, the economy would likely suffer a recession soon thereafter.”

Okay, check. Trump’s plan leads to recession. Never mind that President Biden has been able to lead the economy through challenging economic crises and made a “soft landing” with no resultant recession. With Trump…well, you can plan on getting in the unemployment line.

But it doesn’t end there. A worldwide 10 percent tariff and a 60 percent tariff on Chinese goods proposed by candidate Donald Trump would lower average after-tax incomes of US households in 2025 by about $1,800, or 1.8 percent, according to a new analysis by the Tax Policy Center. They’d reduce imports into the US by about $5.5 trillion, or 15 percent, from 2025–2034.

Trump’s tariffs would significantly raise prices of imported goods since they’d mostly be passed on to consumers, thus jacking up inflation to prior highs that we have already seen. In dollar terms, the lowest-income households would pay about $320 more in tax, middle-income households would pay $1,350 more, and the top 0.1 percent would pay about $133,000 more.

Check-Check: recession and inflation!

To add to the fun, a 10 percent “global tariff” would likely set off a global trade war. That would amount to a global tax on trade, adding to inflation risks. Of course, the Fed would then need to raise interest rates to cool red-hot inflation, thus throwing us deeper into a recession.

If you aren’t already losing sleep over the tariffs, then let’s move on to taxes.

TAXES

We all remember the infamous “Trump Tax Cuts” of 2017. It was essentially the only significant piece of legislation enacted during Trump’s 4 years in the White House. According to new estimates released in May by the Congressional Budget Office (CBO), permanently extending the expiring provisions (in 2025) of the Trump tax cuts would cost $4 trillion over the next 10 years, $400 billion per year.

What this means in real dollar terms is that the extension of Trump’s tax cuts for the wealthy would provide a larger tax cut for extremely rich households than for everyone else. Households with incomes of more than $500,000 per year—roughly the top 2 percent of households by income—would receive a larger tax cut than households making $200,000 per year. Households making $200,000 per year would receive a larger tax cut than those making $50,000 or less yearly.

However, perhaps the most disturbing part of this scenario is that by extending Trump’s tax cuts by 2056, the debt to gross domestic product (GDP) ratio would reach over 200%. What does that mean?  This ratio indicates how solvent a country is. The higher the ratio, the less likely the country can repay the debt. The lower it is, the greater the likelihood they will repay.

You can also think of the percentage number as representing the number of years it would take for a country to repay its debt. In the case of Trump’s tax cuts, it would take 200 years to repay the debt that Trump has run up. But, running up debts and not paying them is something Trump has been doing his whole adult life. Besides, he figures he won’t be around when the creditor comes calling…so what does he care?

Currently, the debt-to-GDP ratio is around 123% (down from 132% in 2020). It is high but not out of control…yet. Under a new Trump tax cut, this ratio will spin out of control, reducing confidence in the American economy and putting our solvency at risk. At the least, it will create indebtedness for generations, for our children, grandchildren, great-grandchildren, and beyond.

Still waiting to be frightened enough? Let’s talk about Trump’s immigration policy.

IMMIGRATION

A Donald Trump “47” administration has committed itself to deport around 11 million immigrants. Aside from the obvious moral issue surrounding this proposal, it has catastrophic economic consequences. I’ll come back to its morality at the end.

Trump has indicated he is ready, willing, and able to use the military to round up, detain, and then deport millions of unauthorized migrants. The cost of the process would be phenomenal. The cost of deporting 11 million people is estimated to be more than $265 billion. It isn’t a budget buster, but add to this the loss of jobs, which would total around 88,000 jobs, and you have the makings of an economic recession.

Oh wait, the tariffs and tax cuts will already cause a recession, but hey, who is counting?

This plan would result in the loss of trillions in immigrant taxes, economic contributions, and payments to Social Security and Medicare. It would be an economic catastrophe.

But let’s go a bit deeper into the job losses if 11 million unauthorized immigrants suddenly disappear. There is a misconception that most of these works are in agriculture. Some are, but they only account for about 4% (283,000) of migrant workers. Other industries would be devastated as well, including construction (1.5 million workers) and the hospitality industry (1.1 million workers). Another 1 million workers are in professional roles such as scientific, technical, or administrative services. Ten percent are in manufacturing, and another eight percent are in retail.

The economic consequences of a deportation policy would ruin any recovery and take us back to the 2009 Great Recession or perhaps worse. Coupled with the devastation of the tariff and tax policies, we would be looking at a Depression-level impact.

But let’s finish this economic excursion by returning to world reality and morality. Let’s think about what kind of country we are and what we would become if Trump had his way on the immigration issue.

Consider this….

• 79 percent of unauthorized immigrants have lived here for at least 12 years

• 44 percent for 20 to 40 years; most of these have never lived in a foreign country

• Trump’s program would potentially round up close to 4.4 million children who were born here and are American citizens, but their parents may be unauthorized.

• Imagine the image of concentration camps (that is what they would be) holding hundreds of thousands of people for deportation.

Is that the kind of nation the United States is? The loss of international standing and respect would be catastrophic as well. The overt racism of such a policy would send a message to people around the world: “Don’t come to the US; it is a white country for white people only.”

Yet that is the point, isn’t it? Trump’s immigration policy is rooted and steeped in white supremacy. If Americans allow this to happen, we may lose our IRAs and 401Ks, but I’m afraid we will have lost something even more important…our souls.

I fear for our democracy if Trump were elected, but I fear equally for our way of life economically and spiritually.