On Tuesday, a letter signed by sixteen Nobel Prize-winning economists warned that the U.S. and world economies would suffer should Republican Presidential candidate Donald Trump wins the November election.
Axios first reported the jointly-signed letter, which states that the economic agenda of U.S. President Joe Biden, a Democrat, is ‘vastly superior’ to that of Mr. Trump, the former Republican President seeking a second term.
The economists argued that Trump’s economic plans would reignite inflation, partly because of his commitment to increasing tariffs on Chinese imports. They believe this will raise prices on numerous goods purchased by U.S. consumers.
“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 economists stated in their letter.
“We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world and a destabilising effect on the U.S.’ domestic economy.”
The letter included the signatures of prominent economists, including Joseph Stiglitz, a 2001 Nobel laureate in Economics, and Sir Angus Deaton, who was awarded the Nobel Prize in Economics in 2015.
This letter is significant because Nobel laureates are adding their academic prestige to a political argument that the Biden administration has advocated for weeks: inflation would worsen under Trump.
Biden’s Offensive Strategy Against Trump’s Proposals
Since prices spiked in the summer of 2022, Democrats have been on the defensive about the economy. Their attempts – embracing “Bidenomics” and investing heavily in media campaigns – have not resonated with voters. The White House’s assertion that the economy is strong does not align with voter perceptions.
Biden’s team now aims to take an offensive approach by bringing attention to Trump’s actual proposals, which include imposing new 10% tariffs on all imports and a minimum 60% tariff on goods from China.
“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,” they write.
The economy was expected to be a focus of Thursday night’s presidential debate, and both candidates are sharpening their approach to pocketbook issues. In addition to pledging to reduce the corporate tax rate from 21 percent to 20 percent,
Trump wants to abolish taxes on tipped wages for workers in the leisure and hospitality sectors. But much to his chagrin, new data from the Yale School of Management reveals that none of the Fortune 500 CEOs are backing former President Donald Trump’s presidential candidacy.
Meanwhile, Biden remains committed to raising taxes on corporations and ensuring that households earning less than $400,000 annually won’t face a tax increase.
Public Perception: Economic Misunderstandings
A growing federal debt overshadows both approaches. A recent nonpartisan analysis indicates that the tax cuts and spending during Trump’s first term nearly doubled the debt increase compared to Biden’s.
During Biden’s presidency, the country has experienced solid economic growth, a robust labour market, and persistently high inflation. However, voters tend to overlook the positive aspects and blame him for the inflation, citing high prices as a significant cause of their economic concerns. Additionally, more than half of voters incorrectly believe the U.S. is in a recession.
According to a recent Fox News survey, about 68 percent of Americans still perceive the economy as “not so good” or “poor,” while the remaining 32 percent describe it as “excellent” or “good.” This poll reflects some improvement compared to earlier, more pessimistic surveys.
Meanwhile, the Biden administration is attempting to find common ground with voters by highlighting the recent decline in inflation while also acknowledging that more efforts are needed to address ongoing economic challenges.
