Mises Institute
There’s Only One Possible Cause of the Next Recession, and It Isn’t Tariffs
Apr 9, 2025
The discussion delves into how President Trump's tariffs may influence economic conditions but aren't the root cause of impending recessions. Instead, it highlights years of artificial credit expansion as the real culprit behind financial downturns. Historical perspectives on recessions are examined, emphasizing the significance of understanding systemic issues and malinvestment to better navigate future economic challenges.
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Quick takeaways
- The real cause of economic recessions is linked to artificial credit expansion rather than the short-term effects of tariffs on the market.
- While tariffs contribute to immediate economic challenges, they are not the fundamental issue behind long-term structural economic problems.
Deep dives
Impact of Tariffs on the Economy
The recent announcement of new tariffs by President Trump has raised concerns about a potential recession, as the stock market saw a significant decline. Critics argue that tariffs create supply shortages, driving up prices for consumers while benefiting a limited number of domestic companies. Although some officials acknowledge that these tariffs might lead to short-term economic pain, the overarching view is that the actual health of the economy is not solely reflected by stock market performance. This complexity highlights the need to separate the immediate effects of tariffs from the deeper structural challenges facing the economy.
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