A group of Nobel Prize-winning economists issued a stark warning to voters saying a Donald Trump win could mean an unstable U.S. economy with higher inflation.
"While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump," the 16 economists wrote in a letter obtained by Axios.
Spearheaded by Joseph Stiglitz, who won the Nobel Prize in economics in 2001, the group recognized many Americans’ concerns about inflation and the economy, which less than 40 percent of Americans believe President Joe Biden is handling well.
But the economists warned that Trump’s “fiscally irresponsible budgets” and potential policies may not be the answer.
“We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world, and a destabilizing effect on the U.S.’s domestic economy,” they wrote.
“Many Americans are concerned about inflation, which has come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets,” the leteter read.
Among some of Trump’s economic policies should he get re-elected, he has pitched large tax cuts for corporations and individuals, imposing a 10 percent tariff on all imported goods and making the 2017 Tax Cuts and Jobs Act law permanent.
But economists have analyzed, and concluded, that these policies could hurt the average American.
The 10 percent tariff on imported goods – and possibly 60 percent tariff on Chinese-imported goods – would ultimately cost a typical household at least $1,700 in increased taxes each year, the Peterson Institute for International Economics found.
It would contribute to an increase in consumer prices - a complaint the majority of Americans have wielded since inflation peaked in 2022.
A report from the Center on Budget and Policy Priorities found that the Trump tax cut, which is slated to end in 2025, ultimately helped households making $500k or more with larger tax cuts.
The Senate Committee on the Budget estimated that extending the Trump tax cut would add $4.6 trillion to the deficit.
Biden’s economic policies, dubbed “Bidenomics”, have focused on giving working-class Americans a break by implementing higher taxes on corporations and wealthy households.
Some economists are critical of Biden’s stimulus package that provided money to individuals and businesses after the Covid-19 pandemic to jump-start the economy. However, they believe the package was too big and fueled inflation in the US.
The letter penned by the Nobel Prize winners comes days before Biden and Trump are slated to debate one another on national television.
Economic policy is likely to be a hot topic and at the moment, the former president holds the upper hand when it comes to public perception of his economic handling.
The letter from the Nobel Prize winners included George Akerlof, Sir Angus Deaton, Claudia Goldin, Sir Oliver Hart, Eric Maskin, Daniel McFadden, Paul Milgrom, Roger Myerson, Edmund Phelps, Paul Romer, Alvin Roth, William Sharpe, Robert Shriller, Christopher Sims and Robert Wilson, per Axios.
