The Next Recession?

By Ronald Horvath | Feb 13, 2018

"Talk of a recession is in the air again after the recent wobble in the stock market. It’s highly likely the next recession will occur in the coming three years, while President Donald Trump is still in office. Maybe it’ll happen as a result of his inflation-baiting tax bill. Maybe it’ll have something to do with excessive consumer debt. We don’t know what the cause will be, but we do have some idea of how Americans will experience the next sustained economic slump. Since the Great Recession, during which the GOP repeatedly if grudgingly went along with former President Barack Obama to extend unemployment insurance, Republicans on both the state and federal level have pushed to make benefits less generous and harder to get.

Meanwhile, the holes they’ve created in the safety net will be filled by so-called “alternative work arrangements” — gigs — which offer fewer protections for workers than full-time jobs.

By design, America is ill-prepared for its next recession, and it’s going to suck. "

"One possible table-setter for a recession...  is a huge tax cut that increases the size of the federal budget deficit — something very much like the contents of the Republican tax bill that Trump signed in December. In such a scenario all the extra money in taxpayer’s hands could cause the economy to overheat, leading the Federal Reserve to hike interest rates faster in an effort to stave off inflation.

“If the tax cuts are deficit financed, that is going to juice the economy and it will overheat, significantly raising the odds of a recession early in the next decade."



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