There is a theory on the fringes of economics and finance that the
United States is riding another bubble, which is about to burst and
plunge the economy into a deep recession. It is not a housing bubble,
like the one that triggered the last recession, but a stock bubble,
puffed up by years of monetary easing from the Federal Reserve. Few
professional economic forecasters subscribe to that theory, but a few finance pundits do, and so, too, does Republican presidential front-runner Donald Trump.
Trump made that embrace clear in his interview with The Post's Bob Woodward and Robert Costa released today, which included a long back-and-forth on economic issues. From the transcript emerges a three-legged Trump theory of what ails the American economy and how to heal it, starring a stock bubble, bad trade deals and a massive tax cut.
Those legs do not form an argument that most economists would call coherent.
Instead, Trump appears to blend economic conspiracy theories with magical-thinking accounting: Stocks are a bubble inflated by "easy money"; government regulators have taken control of banks and choked off lending to everyone but the rich; the "real" unemployment rate is closer to 20 percent than 5 percent, and his crowd sizes prove it; cutting taxes and renegotiating the terms of trade will reinvigorate the economy and the middle class and somehow pay off the federal debt within eight years.
https://www.washingtonpost.com/news/wonk/wp/2016/04/02/the-bizarre-optimism-in-donald-trumps-theory-of-the-economy/
Trump made that embrace clear in his interview with The Post's Bob Woodward and Robert Costa released today, which included a long back-and-forth on economic issues. From the transcript emerges a three-legged Trump theory of what ails the American economy and how to heal it, starring a stock bubble, bad trade deals and a massive tax cut.
Those legs do not form an argument that most economists would call coherent.
Instead, Trump appears to blend economic conspiracy theories with magical-thinking accounting: Stocks are a bubble inflated by "easy money"; government regulators have taken control of banks and choked off lending to everyone but the rich; the "real" unemployment rate is closer to 20 percent than 5 percent, and his crowd sizes prove it; cutting taxes and renegotiating the terms of trade will reinvigorate the economy and the middle class and somehow pay off the federal debt within eight years.
https://www.washingtonpost.com/news/wonk/wp/2016/04/02/the-bizarre-optimism-in-donald-trumps-theory-of-the-economy/
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