Trump’s Tax Cuts and the Economic Choices Facing China and the U.S.: Policy Pitfalls in an Era of Stagnation
The Core Contradiction of the Global Economy: Artificial Overheating of Demand vs. Actual Shortage of Demand Currently, global economies—including the United States—are universally facing the dilemma of insufficient effective demand. While the market presents the illusion of artificial demand overheating, there is in fact a severe oversupply on the supply side. What the U.S. economy needs most at present is capacity reduction, not policy stimulus that encourages businesses and households to increase leverage and expand production capacity. Trump’s current policy direction not only undermines the service sector—the backbone of the U.S. economy—but also encourages industrial firms to increase leverage and expand capacity, a strategy strikingly similar to policies of the Hoover era. ...