Trump Predicts ‘Massive Recession,’ AKA Depression, For U.S. Economy, Debt Elimination In Eight Years

Republican nomination front-runner Donald Trump has predicted a “massive recession” for the U.S. economy in the near future, as well as pledging that he would be able to pay off the U.S. national debt within eight years, or two presidential terms, as reported by the Washington Post.

Though definitions of exactly what a recession is differ, it is generally accepted as being two consecutive quarters of negative real gross domestic product growth, as reported by the Federal Reserve Bank of San Francisco. Economist Gregory Mankiw explains that the difference between a recession and a depression is the depth by which GDP falls and the length of time it remains negative. A depression is, almost by definition, a “massive recession.”

Though Donald Trump portrays himself, and is often portrayed, as a successful businessperson who has gained a wealth of knowledge about the stock market, the truth is that he is an average investor, at best.

It has been speculated that Donald Trump inherited $40 million from his father in 1974, and that his net worth now is in the neighborhood of $3 to $4 billion. This equates to the type of gain that an investor would achieve by investing in a mutual fund based on the Standard & Poor’s 500 Index (^GSPC). Had Donald Trump invested $40 million in Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A, BRK-B) in 1974, and not sold any shares, at current market prices his investment would be worth $198 billion, or about 50 times more than he has earned under his own investment management skills, as reported by the Inquisitr.

However, when asked by Bob Woodward of the Washington Post if now is a good time for investing, Trump immediately answered, “I think it’s a terrible time right now,” and stated a belief that financial markets are in a “bubble” because money is “so cheap” at the moment.

Trump is referring to loose economic policies implemented by central banks around the world, known as quantitative easing, which, in part, is seen as being responsible for the large U.S. national debt.

“The problem with debt, as you go throughout the history of every country that got out of hand with debt, is there’s always been a debt implosion,” money manager and Fox News contributor Gary Kaltbaum was quoted by Breitbart with regard to loose economic policy and the national debt. “All we’ve been able to do is print money to get ourselves out of trouble, but that’s in the short run. My big worry is the long run. What is the ultimate outcome of a country that continues to spend itself into debt and not even talk about it?”

Republican presidential candidate Donald Trump has declared that the stock market to be in a "bubble," that a "massive recession" is looming, and that by renegotiating America's trade deals he can wipe out the national debt in eight years.
Kaltbaum has been skeptical of market observers who proclaim they can predict the future of financial markets with certainty.

“The babies being born in America today are the luckiest crop in history,” Warren Buffett, who has significantly outperformed Donald Trump in the stock market, was quoted with regard to the the economic potential of the United States, as reported by the Inquisitr. Buffett has also displayed skepticism with those who profess an ability to predict short-term moves in the stock market.

With regard to the national debt, which is reportedly at $19 trillion, Trump professed a belief to Bob Woodward that, by shoring up the United States’ trade deals, he would be able to pay down most of it within eight years.

Donald Trump has predicted a "massive recession" and stated that now is a "terrible" time to invest in the stock market.
After pointing out that such a plan would amount to coming up with $2 trillion a year, from a budget that totaled $3.8 trillion in 2015, Trump elaborated that the United States is losing in the $505 billion worth of trade it does with China each year, as well as trade it conducts with many other countries.

In a second Washington Post piece, it is pointed out that most economists feel that finding $2 trillion to cut in a budget of $3.8 trillion is “impossible,” even though Donald Trump predicts he has the ability to negotiate better terms in trade pacts than previous administrations. Trump explained that he intends to use his “aura of personality” to gain respect for the United States and its president back from other countries around the globe.

[Photo by Scott Olson/Getty Images]