Why would Trump try to "cause" a recession?

7,100 Views | 84 Replies | Last: 6 days ago by Ghost of Bisbee
2girlsdad
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I'm a dummy when it comes to markets and the economy. I see stories where Trump is deliberately trying to cause a recession, but why would he? Is it his goal for long term economic strength and willing to take lumps and risk a recession to achieve that? I don't see him deliberately trying to do that just to watch the world burn.

Please educate me.
Ragoo
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AG
Slow the economy, bring inflation down, lower rates, refinance debt

My guesses.
KillerAg21
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Depends on how you view Trump, those that support him would say he is restructuring the way America does commerce with the world in a way where America is always first. Where the American Public do not get screwed over by bad trade. At least from how I've grasped

Those that don't like him believe he is crashing the economy so his billionaire cabinet and friends can make more billions off of the back of a recession. That he does not actually care about America but extracting as much value out of it as is possible.

Sapper Redux
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My honest answer is that he seems obsessed with tangible aspects of the economy, particularly manufacturing and construction. He has this rosy view of the Gilded Age as the pinnacle of American strength since we were an economy almost entirely driven by manufacturing. To protect those industries, we had fairly high tariffs. He doesn't seem to grasp just how integrated the global economy is and how much the United States has profited off of the existing trade system. It really appears like he assumes trade deficits are bad because they are deficits, without much more nuance than that.

There's a good faith argument to be made about the limits and harms of free trade. There are good faith changes one could make. Maybe even tariffs as a targeted tool in certain cases. The problem is, tariffs are being wielded as a hammer to threaten, and not to threaten competitors, but MAJOR trading and geopolitical allies. This creates uncertainty, especially the see-saw way the tariffs are being announced and implemented, which is killer for markets. Furthermore, tariffs are a consumption tax on us, the consumers. It makes goods we buy more expensive. Even domestic-produced goods will get more expensive. That puts inflationary pressure on the economy coupled with harms to growth. All of that adds up to recession. In the last Trump administration, there were dissenting voices who muzzled his damaging impulses to an extent. There are no voices like that this time around and I think they're telling him any downturn will be brief.
@NFLPlayerProps
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There are trillions of dollars of debt maturing in 2025 and he needs to re-issue at much lower rates than current to retain any hope that we can eventually get out of this mess.
the most cool guy
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KillerAg21 said:

Depends on how you view Trump, those that support him would say he is restructuring the way America does commerce with the world in a way where America is always first. Where the American Public do not get screwed over by bad trade. At least from how I've grasped

Those that don't like him believe he is crashing the economy so his billionaire cabinet and friends can make more billions off of the back of a recession. That he does not actually care about America but extracting as much value out of it as is possible.



In his first term, I thought Trump was just in it for his ego and to make money. After the **** he has endured to get back into the Whitehouse and the swift action he has taken since January 20th, I don't think he cares about making money for himself or his friends. I think he actually wants to build a healthier economy and a healthier country.

Whether what he is doing is best way to get there, I don't know yet, but I've seen enough that I will roll my eyes at anyone who says he's just in it for the money. All indications say otherwise.
Sapper Redux
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His meme coin suggests he's still perfectly fine with profiting off of the presidency.
I Am A Critic
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Create a problem and then declare yourself a hero when you solve it.
HECUBUS
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I think that plan was from the Trump fan base looking for a beneficial economic reason for the politically manipulated market correction. I don't think that's a real plan. Seems it's broken at inflation stopping rate cuts.

Disclaimer: No clue. Just hoping those lost scrollers stick to one thread. Zero would be better.
Gordo14
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I don't think he's trying to cause it. He's just obsessed with the one lever he has over the economy and ignorant on the subject matter. He's a narcissist so he can't admit he's wrong. And he's never been good at seeing a multi lateral picture which is why he's always focused on bilateral issues.

He was the same in his first term. The difference was he had a competent cabinet (Mnuchin and lighthizer were some of the best we've had) who successfully redirected him when he got like this. It helped that 2017-2020 the economy basically ran itself. Now he's got a bunch of incompetent members of his cabinet and he's very overconfident. A lot of people took him seriously not literally... But they were wrong. This is who he is.
Muy
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AG
I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?
Sapper Redux
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Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Heineken-Ashi
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Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.
P.H. Dexippus
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AG
He's not intending to cause a recession IMO. He's thinking the short-term pain of threatening tariffs will result in a net long-term gain for America through improved trade deals. That's laudable. Where he goes wrong is the seemingly haphazard and needlessly provocative way he's going about implementing the tariffs. It's unnecessarily spooking markets and trade partners.

He's also wrong to the extent he's trying to reshore American manufacturing jobs through trade barriers rather than cutting regulatory and (effectively) closed shop policies that drive those jobs overseas to begin with. And he's wrong when he talks about trade deficits. He needs to watch Milton Friedman 18hrs a day on repeat.
KillerAg21
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Those that disagree could very easily make the argument he did it so that he doesn't go to jail. How you view him drastically alters how you view the issue. I'm sure the truth is somewhere in between but how far I have no idea.
MillionaireSock
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I think the reality is, many Americans "feel" like they have been in a recession for a while now, even if the economic numbers don't show it. Since the pandemic, there has been a K-shaped recovery - the people who were able to work from home and keep their jobs saved a bunch of money, were able to invest to hedge some inflation, and came out in a better spot. Those who weren't able to work and lost paychecks barely scaped by, and have been hammered by inflation. This has led to 50% of spending in America being done by the top 10% of the population.

Many of Trump's policies are aimed at bringing back value added low to medium skill work in the US (while deporting non-American low skill works and getting rid of government jobs that do not efficiently add value) that should, in theory, strength the economic power of that group in the long run. There is just a gap between when the negative effects hit (i.e. tariffs), and when the positives happen (i.e. new manufacturing plants are up and running). There's also the extra hesitancy from companies that need to invest that all this can be undone by the next President before we ever get to the positives, so the earlier he does all this, the better chance the positives happen and stick before someone comes in after him and undoes it all. If you trigger a recession in the short term - so be it. Recessions are a natural part of the business cycle and we're due for one anyways.

Ideally, you'd want to do this a little more strategically, but our 2-4 year political cycles don't make that possible, so you have to go a little more slash and burn, ask for forgiveness vs permission, to make any changes that actually last.

At least, that's my view of how he's looking at it. There are geopolitical implications as well in brining more manufacturing capability to America.
KillerAg21
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Playing with a recession is not only irresponsible it is inhumane. There are many where a recession can sink them into poverty and drastically increase their chances of an early death. The only people who are ok with his rhetoric of short term pain are those who can survive the pain. For millions of your neighbors and fellow countrymen it could happen directly kill them.

https://pmc.ncbi.nlm.nih.gov/articles/PMC1448606/#:~:text=Unemployment%20was%20associated%20with%20an,between%20unemployment%20and%20early%20mortality.
Heineken-Ashi
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KillerAg21 said:

Playing with a recession is not only irresponsible it is inhumane. There are many where a recession can sink them into poverty and drastically increase their chances of an early death. The only people who are ok with his rhetoric of short term pain are those who can survive the pain. For millions of your neighbors and fellow countrymen it could happen directly kill them.

https://pmc.ncbi.nlm.nih.gov/articles/PMC1448606/#:~:text=Unemployment%20was%20associated%20with%20an,between%20unemployment%20and%20early%20mortality.
The only people who have not been in recession for the last 3 years are the wealthy. What Trump is doing is going to strengthen the dollar and stabilize the economy for the lower and middle classes.

That's why the loudest crying voices are the ones with the most to lose. They were conditioned to believe the stock market only ever goes up. In reality, we've been monetizing our debts and devaluing our currency for decades to flood the world with dollars that everyone else has used to invest and enrich themselves.

Sorry bub. Deflation is a good thing and its BADLY needed. If you can't see the warning signs telling you to protect your cash, that's on you. Hint, one of them was interest rates BOTTOMING AND SKYROCKETING UP 4 YEARS AGO, while Biden was office.
Ragoo
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The economy has been tissue paper and duct tape for a long time.
Heineken-Ashi
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Quote:

In his first term, Trump promoted the stock market as a gauge of his presidency. This is no longer the case. Trump recently told the media: "You can't really watch the stock market. If you look at China, they have a 100-year perspective. We have a quarter. We go by quarters."

Trump cares about the real economy this time. His Treasury Secretary Scott Bessent told Larry Kudlow: "He wants lower rates. He is not calling for the Fed to lower rates." Instead: "He and I are focused on the 10-year Treasury and what is the yield of that."

The federal funds rate is more or less the spot interest rate, which is relevant especially for stock market loans. The 10-year rate is a better reference point for home mortgages and long-term industrial loans to large companies.

Bessent explained: "Over the medium term, which is what we're focused on, it's a focus on Main Street. Wall Street's done great. Wall Street can continue to do fine. But we have a focus on small business and consumers. We are going to rebalance the economy. We are going to bring manufacturing jobs home."

The political reality is that the rich did not vote for Trumpthose with incomes over $100,000 was Harris's best income demographicso why should he reward them? While 58% of households own stocks, according to Federal Reserve data, the top 10% richest Americans own 93% of all stocks. The poorest half of Americans own only 1% of stocks. This is why the stock market has less political clout than in the past. As Bessent points out: "The market was up 20% last year, 20% the year before. Did the Biden administration succeed? The American people weren't buying it just because the market was upthey voted out the Democrats."
Sapper Redux
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Heineken-Ashi said:

Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.


USAID was torched with zero foresight. To the extent that they are having to go back and try to clean up the mess while still ending extremely important humanitarian projects that will result in excess mortality while giving countries like China a blazing opportunity to establish themselves as the more reliable partner in mineral-rich regions of places like Africa.

https://apnews.com/article/usaid-trump-foreign-aid-rubio-judge-ali-60ef55de60a36c61eb563b5982298385

This is without going into the firings of people involved in nuclear safety or at the CDC and then trying to un**** themselves.
Heineken-Ashi
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Sapper Redux said:

Heineken-Ashi said:

Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.


USAID was torched with zero foresight. To the extent that they are having to go back and try to clean up the mess while still ending extremely important humanitarian projects that will result in excess mortality while giving countries like China a blazing opportunity to establish themselves as the more reliable partner in mineral-rich regions of places like Africa.

https://apnews.com/article/usaid-trump-foreign-aid-rubio-judge-ali-60ef55de60a36c61eb563b5982298385

This is without going into the firings of people involved in nuclear safety or at the CDC and then trying to un**** themselves.
Stopped reading right there. Dear Lord.
EnronAg
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AG
no kidding...how he was able to lose every poster in 6 words was quite remarkable
JDCAG (NOT Colin)
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AG
Heineken-Ashi said:

Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.


I mean, nothing says lack of foresight like firing a bunch of people from the National Nuclear Security Administration and then having to panic and try and hire them back without even knowing their contact info.

How about "pausing" Ebola prevention, which even Elon said they "accidentally" canceled?

Nobody can cut this much this fast with any sort of realistic understanding of who they're cutting and what the impacts will be.
JDCAG (NOT Colin)
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I mean, we're talking about a group that claimed to have cut $8 billion, only to later revise it to $8 million, but people are trying to claim this is all well planned and executed?

https://www.forbes.com/sites/conormurray/2025/02/19/here-are-the-biggest-doge-hoaxes-and-inaccuracies-as-8-million-canceled-ice-contract-listed-at-8-billion/
Ag92NGranbury
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Encouraging better trading partners - good
Firing a whole bunch of gov employees on the brink of a potential recession - bad
Addressing the natl debt - good
Adding to the natl debt - bad
Encouraging fed to move interest rates down during inflationary cycle - bad
Treating good trading partners like enemies - bad
Treating bad trading partners that steal our technology - semi good
Massive cutting in DOD while China & Russia continue to lurk - bad
No clear plan where businesses can see market stability - bad
Pushing tariffs while inflation isn't under control - really bad

This is reminiscent of an old John Candy movie... 'Canadian Bacon'
Sapper Redux
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Heineken-Ashi said:

Sapper Redux said:

Heineken-Ashi said:

Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.


USAID was torched with zero foresight. To the extent that they are having to go back and try to clean up the mess while still ending extremely important humanitarian projects that will result in excess mortality while giving countries like China a blazing opportunity to establish themselves as the more reliable partner in mineral-rich regions of places like Africa.

https://apnews.com/article/usaid-trump-foreign-aid-rubio-judge-ali-60ef55de60a36c61eb563b5982298385

This is without going into the firings of people involved in nuclear safety or at the CDC and then trying to un**** themselves.
Stopped reading right there. Dear Lord.


Be honest, do you know what they do outside what you were told by whatever media you support?
Gordo14
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Heineken-Ashi said:

KillerAg21 said:

Playing with a recession is not only irresponsible it is inhumane. There are many where a recession can sink them into poverty and drastically increase their chances of an early death. The only people who are ok with his rhetoric of short term pain are those who can survive the pain. For millions of your neighbors and fellow countrymen it could happen directly kill them.

https://pmc.ncbi.nlm.nih.gov/articles/PMC1448606/#:~:text=Unemployment%20was%20associated%20with%20an,between%20unemployment%20and%20early%20mortality.
The only people who have not been in recession for the last 3 years are the wealthy. What Trump is doing is going to strengthen the dollar and stabilize the economy for the lower and middle classes.

That's why the loudest crying voices are the ones with the most to lose. They were conditioned to believe the stock market only ever goes up. In reality, we've been monetizing our debts and devaluing our currency for decades to flood the world with dollars that everyone else has used to invest and enrich themselves.

Sorry bub. Deflation is a good thing and its BADLY needed. If you can't see the warning signs telling you to protect your cash, that's on you. Hint, one of them was interest rates BOTTOMING AND SKYROCKETING UP 4 YEARS AGO, while Biden was office.
I hear this sentiment expressed all the time... But it's really not supported by the data...

https://home.treasury.gov/news/featured-stories/the-purchasing-power-of-american-households

Real wages have risen highest for the bottom quartile and the median earner. But wages have increased across all brackets in REAL terms.

Deflation is a terrible thing. That's what's going on in the Chinese economy. It depresses consumption, depressing demand, depressing investment, etc. Real wage growth should be the goal, and it's what we had prior to the Trump administration... And for what it's worth, deflation is extremely unlikely to happen under a tariff regime... Unless of course we go into a depression or something. I can assure you that will not be better than inflation. Tariffs are much more likely to result in something more like stagflation.
deddog
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AG
Sapper Redux said:

Heineken-Ashi said:

Sapper Redux said:

Muy said:

I Am A Critic said:

Create a problem and then declare yourself a hero when you solve it.


Cutting wasteful spending and using tools in his toolbox to get better deals with other countries is a problem?


You can recognize there's a difference between identifying and cutting wasteful spending and torching a needed agency or service without any foresight, right? You can also recognize that ignoring your own deals with allies and treating them as adversaries may not result in the best deals for anyone with serious long term ramifications, right?
Which agency or service was torched without any foresight? And please provide proof of said lack of foresight.


USAID was torched with zero foresight. To the extent that they are having to go back and try to clean up the mess while still ending extremely important humanitarian projects that will result in excess mortality while giving countries like China a blazing opportunity to establish themselves as the more reliable partner in mineral-rich regions of places like Africa.

https://apnews.com/article/usaid-trump-foreign-aid-rubio-judge-ali-60ef55de60a36c61eb563b5982298385

This is without going into the firings of people involved in nuclear safety or at the CDC and then trying to un**** themselves.
Of all the agencies, USAID is the one you think of? Because the grift for US politicians isn't good enough, we need to bribe foreign leaders too?

You want to help foreign countries, use a non-profit. USAID is being used to pay off politicians in other countries.
If you argued that Trump took away a useful CIA tool for regime change, then you might have a decent case. Borrowing money to pay off crooks in foreign countries is a horrible idea.
Sapper Redux
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I'm not trying to argue that USAID was perfect or above reform. But if you think that's what they were doing, you're very mistaken. I worked with them when I was on brigade staff during my second Iraq deployment. Absolutely not a perfect organization, but doing extremely important humanitarian work that improved the status of the United States and gave us opportunities in parts of the world that would otherwise be disposed to hate us. I guarantee we will feel the consequences of this.
@NFLPlayerProps
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SteveBott
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AG
Gutting CFPB is straight out of Vought's Project 2025. It had achieved 19-20 billion in refunds for the public that can't fight big business lawyers.
IowaAg07
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AG
Please provide proof of the foresight. Surely you can find some stump speeches, op-eds, articles, interviews, etc. where the administration outlined both what they're trying to do and how they plan to only cut the wasteful parts of the government without disturbing the rest. And no, talking in vague generalities is not proof.
fulshearAg96
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To get it over with and have the economy roaring during mid-terms...
Sapper Redux
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fulshearAg96 said:

To get it over with and have the economy roaring during mid-terms...


But he hasn't gotten it over with. He keeps changing the tariffs and wildly adjusting rates on the fly. There's zero consistency or appearance of a plan and he's going hardest after allies with whom we do a huge amount of trade and igniting trade wars.
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