Concerning the US Treasury Department’s deficit report, Seyed Reza Mirtaher, said: “One of the most important slogans and claims by President Donald Trump has been that the US economy has flourished during his presidency, and in this respect he has particularly emphasized on boosting economic growth rate and reducing and checking unemployment rate, but statistics released recently have cast serious doubts about these claims.
“Also, the set of economic developments that occurred on Wednesday last week is very much likely to have signalled the prospect of a renewed recession in the US economy,” he said.
Mirtaher referring to the 27% increase in the US budget deficit, noted: “The fiscal year in the US begins on October 1 of each year and nearly 10 months have passed since then; during this time it is estimated that the federal government’s budget deficit has widened to over $866 billion recordings an increase of 27 per cent from the year before. Experts blame the increase in the federal government’s spending against its revenues, including the tax exemptions Trump has considered specifically for wealthy Americans.
He added: “The more important thing that has happened is that the prospect of a recession in the US economy has been created, especially given that the short-term bonds interest rate has fallen below the long-term bonds interest rate, and this has sparked whispers of a recession not only in the US but also in some European countries. We noticed that in Wall Street on Wednesday the Dow Jones Industrial Average index of 100 major US companies fall more than 400 points. This shows that there is a significant risk of threatening the US economy.
“Meantime, it should not be forgotten that Trump’s trade policies, especially the trade war he has waged with China, have created a recession in the US economy,” the senior international relations expert said. Most importantly, rising spending of households in the US has pushed up imports, and all of this has led to a recession in the US economy now more than ever.
Mirtaher said that the last recession in the United States occurred between 2007 and 2012, part of which was during George W. Bush-era and another part was under Barak Obama. He added: “There is a great possibility another recession would occur with its minimum political consequence being for Trump not to be able to boast of his economic accomplishments in the 2020 US presidential campaign, or that his economic gains may be greatly diminished until the time the presidential election will take place,
He emphasized: “Naturally, when recession occurs, we will see economic growth slowing, resulting in lower employment rates and rising unemployment, and these issues, in general, could greatly undermine Trump’s political stance, especially in the classes that are his social base: The whites; The middle class and lower middle class.”
“Trump has already begun changing his economic policies, and the most important manifestation of that policy shift was that he had previously announced that from September 1, 2019, he would impose a 10 per cent tariff on $300 billion of Chinese goods imported into the United States,” Mirtaher said. But he retreated on Tuesday, indicating that he is well aware that continuing this trend would increase the likelihood of a recession, and that will surely be a big blow to the US president…”
“If Trump shows clever responses to check stagnation, there is a chance for the outbreak of some positive changes in his favour, but if the current trend continues, the shadow of the recession will certainly be overwhelmed,” said the international affairs analyst.
He emphasized: “Trump’s trade and economic policies are not only severely disrupting the US economy and even altering previous forecasts of economic growth, but also causing the structure of the world economy and trade to deteriorate. Tension, turbulence and insecurity will hurt the economic situation of other countries, especially US trading partners. This raises the need for sympathetic and coordinated positions by various countries on Trump’s trade policies.