16 Nobel Prize-winning economists have warned that former President Donald Trump's second-term agenda could create what Axios is describing as an "inflation bomb" that would rock the global economy.
In a letter, the economists argue that a combination of more tax cuts for corporations, a labor shortage caused by the mass deportation of undocumented immigrants, and looser monetary policy in the form of lower interest rates would cause prices to skyrocket yet again just as inflation has started to stabilize in the three percent range.
""We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy," the economists wrote, per Axios. "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."
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The biggest name on the letter is 2001 Nobel Prize winner Joseph Stiglitz, who is joined by fellow Nobel winners George A. Akerlof (2001), Sir Angus Deaton (2015), Claudia Goldin (2023), Sir Oliver Hart (2016), Eric S. Maskin (2007), Daniel L. McFadden (2000), Paul R. Milgrom (2020), Roger B. Myerson (2007), Edmund S. Phelps (2006), Paul M. Romer (2018), Alvin E. Roth (2012), William F. Sharpe (1990), Robert J. Shiller (2013), Christopher A. Sims (2011), and Robert B. Wilson (2020).
During his first term in office, Trump ran up a record amount of debt in just four years with a budget-busting tax cut that was targeted primarily toward corporations. The debt only accelerated when the novel coronavirus pandemic sent the economy into a tailspin, which required massive federal spending to prevent the unemployment rate from hitting Great Depression-level highs.
