The Trump Stimulus Will Catch Up With Us Sooner Rather Than Later

  • The U.S. has had many stimulus packages before President Trump’s proposed one – but are they a benefit for the country?
  • Many economists believe higher rates of inflation are coming and even “stagflation,” slow economic growth with increasing inflation, from possible stimulus.
  • One stimulus package is worrying enough, but if the coronavirus crisis continues, could more stimulus be doled out?

The term “stimulus package” has become almost synonymous with Barack Obama’s American Recovery and Reinvestment Act (or “ARRA”).

In early 2009, Obama proposed his stimulus package would “create new jobs,” provide “many years of economic growth” and “jump-start” the markets.

In 2012, the White House claimed that the U.S. economy would grow by 4.6%, unemployment would fall to 6%, and the deficit would lower to 3.5% of GDP.

In reality, economic growth only hit 2%, unemployment 8%, and the deficit gained 8.5% of GDP.

That’s a far cry from the rosy predictions that the stimulus was supposed to have on the economy. The markets grew stagnant despite the government’s investment and the national deficit became larger from it.

A stimulus package is designed for short-term use, and in President Trump’s case – the $2 trillion injection into the economy will only be a benefit if organic movement in the markets is there to ride the coattails of the trillions being put in.

Some economists believe inflation is going to rise for an extended period of time

Source: Twitter

Charles Sizemore – CIO of Sizemore Capital Management and frequent guest on CNBC, Fox Business and Bloomberg – said that the stimulus may help the U.S. economy from a deeper recession but that “it could also sink the value of the dollar through rising inflation.”

Forbes points out the possible risks of Trump’s stimulus bill as being,

out-of-control inflation, the dollar’s displacement as the world’s funding currency, and the complete destabilization of the U.S. financial…

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