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There are a number of possible explanations for Donald Trump’s recent economic antics. One is particularly troubling: The president may not be very clear in his head due to his crown medication, said Democratic top politician Nancy Pelosi. According to some medical professionals, steroids like the one Trump takes “have an impact on thinking,” the House spokeswoman said.
The White House immediately rejected Pelosi’s accusation. But Republicans were also caught off guard by the lone effort of their commander-in-chief.
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On Tuesday afternoon, Trump abruptly halted his finance minister’s negotiations with Democrats over another stimulus package against his advice.
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A verbal change followed four hours later.
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In the evening, the president finally asked Congress to immediately adopt a series of billions in measures.
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On Thursday he finally asserted forcefully that thanks to his intervention, both sides had now resumed “very productive negotiations.”
Meanwhile, your advisers may have made it clear to you that by interrupting the conversations you are hurting yourself. Trump should have the best interest in a deal, says Jeremy Lawson of Aberdeen Standard Investments. The pace of economic recovery has slowed, he told the “Politico” news magazine. In the absence of more government aid.
Trumps calls for three new measures:
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$ 25 billion for airlines.
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$ 135 billion for smaller businesses.
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Another $ 1,200 stimulus check for all Americans.
The measures will be decided in isolation. Democrats are unlikely to be enthusiastic. He passed a $ 2.2 trillion program in the House of Representatives that provides aid to the unemployed, but also support to states and communities devastated by the crisis.
The shortened version of Trump “would only help the White House as long as it is of little use to Democrats,” concludes the consultancy BCA Research. The chances of a breakthrough in the negotiations? It is equal to zero. Investors, still waiting for a deal to be finalized, face “an unpleasant surprise,” experts warn.
The stock market is still deaf to this ear. On Thursday, reports that negotiations are now resuming initially prompted a rise in prices.
In fact, the contents of another aid program are not only controversial among political opponents. Several Republican senators are also rejecting new spending in light of the skyrocketing national debt. The government should focus on reopening the economy rather than “just taking trillions of dollars out of Washington,” Texas Senator Ted Cruz said in the summer.
Economists outside of Congress are more united than rarely: America needs an extra boost to emerge from the crown crisis. The longer the drought streak, the greater the risk that thousands of entrepreneurs will eventually give up and the economy will no longer return to the pre-Covid growth path.
Already there are fears that the slow economic recovery that followed the global financial crisis will be repeated. Without an economic stimulus package, the economy will not “fall off the cliff,” Julia Coronado, president of the MacroPolicy Perspectives research institute, told the “Wall Street Journal.” But the recovery could “creak”.
The latest economic data supports this skepticism:
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In august that is income of households fell 2.7 percent.
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the Unemployment rate it is less than eight percent, but more than 26 million people continue to receive government support.
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The number of Long-term unemployed increases.
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And the Activity rate, that is, the proportion of employable employees in the population, is significantly lower than in February.
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Many corporations have Waves of layoffs Announced. American Airlines and United want to put more than 30,000 employees on the road, Walt Disney is cutting 28,000 jobs.
If a comprehensive stimulus package does not materialize, it will put the US economy back on its recovery path in six months, according to economists at investment bank Morgan Stanley. The pre-Covid level would not be reached again until the end of 2021.
Many economists have incorporated an agreement on a second aid package into their forecasts and are now correcting expectations. Jay Bryson, chief economist at Bank Wells Fargo, expects the growth rate to fall back into the “mid-single-digit range” in the fourth quarter. “That makes the economy more vulnerable in the event of another shock,” he warns.
Joe Brusuelas of RSM, a network of audit and tax consulting firms, expects a 3.6 percent decline for the full year of 2020. In light of wavering economic conversations, uncertainty about the outcome of the US elections, and increasing likelihood of a new wave of infections, “we are putting the probability of a recession in the next twelve months at 50 percent.”
Voters also seem to wonder if the economy is not as bright as the president claims. In a new CNN poll of registered voters, challenger Joe Biden is now on par with the incumbent when it comes to economic policy competition. A few months ago, Trump had a 12 percentage point lead on this issue.
