Why Donald Trump Needs The Next Recession To Start As Quickly As Possible

Tyler Durden's picture

Submitted by Michael Snyder via The Economic Collapse blog,

A new recession is coming, and Donald Trump needs it to begin sooner rather than later.  As I explained last week, most American voters tend to care about their pocketbooks more than anything else.  If the next recession were to officially start during the first quarter of 2017, it would be very easy for Trump to blame it on Obama, and then he could portray himself as the one that pulled the U.S. economy out of recession in time for the 2020 election.  But if the next recession does not begin until 2018 or 2019, everybody is going to blame it on Trump even if it is not his fault.  In politics, who gets the blame for whatever goes wrong is often the most important thing, and if Trump wants to avoid blame for the next recession he needs for it to start as quickly as possible.

For most of 2016, the mainstream media was warning that a new recession was probably coming no matter who won the election.  For one example, just check out this Bloomberg article.

And for once, the mainstream media was precisely correct.  Barack Obama left us with an enormous economic mess, and it would take an economic miracle of unprecedented proportions to keep the U.S. economy from going into a recession at this point.

During the Obama years, the U.S. went on a debt binge unlike anything we have ever seen before.

The U.S. national debt almost doubled.  During Obama’s time in the White House, it increased from 10.6 trillion dollars to nearly 20 trillion dollars, and that means that over 9 trillion dollars of future consumption was brought into the present.  That incredible boost to spending would have shot U.S. economic growth into the stratosphere during normal times, but because we were struggling so much all we got out of it was eight years of economic stagnation.

In fact, Barack Obama was the only president in modern American history never to have a single year when the U.S. economy grew by at least 3 percent, and he had two terms to try to accomplish that goal.

And remember, Obama also had the benefit of doctored economic numbers.  John Williams of shadowstats.com tracks what the figures would look like if honest numbers were being used, and according to his calculations the U.S. economy has actually continually been in a recession since 2005.

In addition to government debt, other forms of debt are way out of control as well.  The total amount of consumer debt in the United States has now hit 12 trillion dollars, and corporate debt has approximately doubled since the last recession.

When levels of debt grow much, much faster than the overall economy, it is inevitable that a crash will come.

If you look back throughout history, I don’t know if you can find a single example where debt has grown this quickly and a crash has not happened afterwards.

By some miracle if we are able to avoid a major economic downturn this time, we will literally be defying the laws of economics.

The employment crisis also threatens to get a lot worse in the months ahead.  The mainstream media keeps trying to tell us that we are almost at “full employment”, but the truth is that more than 100 million Americans do not have a job right now.

Yes, there are a few areas of the country where jobs appear to be plentiful, but there are many more areas where they are not.

For example, you will never, ever be able to convince 23-year-old Tyler Moore that the job market is good

Tyler Moore’s late-December drive to Louisville, Ky., was one of desperation. He was headed four hours west on Interstate 64 to interview for a job. Even if he landed the position, filling his gas tank had left him with $8 to his name. He would have to sleep at a friend’s place until he could earn enough to pay rent.


The 23-year-old had run out of options. He’d applied for dozens of jobs within an hour and a half of his hometown of Lovely, once a coal-mining stronghold. Instead of opportunities, he had found waiting lists.


“Minimum-wage jobs, fast-food restaurants, Wal-Mart, anything like that, a lot of them has already been took,” he says in an Appalachian drawl, explaining that the backlog just to interview was as long as a year. “There are no jobs.”

If the U.S. economy is in “good shape”, then why can’t people like Moore find a job?

Yes, there is a tremendous amount of optimism in the financial markets right now and the stock market has been soaring.

But the exact same things were true in 2007, and we remember how that turned out.

There is no possible way that the S&P 500 can continue to generate an 18% annual return without corresponding economic growth.  The following comes from David Stockman

Altogether the S&P 500 now stands at 3.4X its post-crisis low, having generated an 18% annual return (including dividends) for nearly eight years running.


To be sure, in an honest free market that very fact would be a flashing red light, warning that exceptionally high gains over an extended period necessitate a regression to the mean in the period ahead.

A lot of people get caught up in trying to predict exactly when the stock market will crash, but what everybody should be able to agree on is that it will crash.

There is no possible way that stocks can stay at such ridiculously overpriced levels indefinitely.

Throughout history, stocks have always moved back in the direction of the long-term averages, and this time will be no exception.

And just like last time, the beginning of a new recession will likely be accompanied by a major financial correction.

In recent articles, I have been highlighting some of the reasons why it appears that a new recession is imminent…

-Federal tax receipts have gone negative for the first time since the last recession.


-Job growth at S&P 500 companies has gone negative for the very first time since the last recession.


-The U.S. trade deficit in 2016 was the largest in four years.


-Lending standards have tightened up for medium and large sized firms for six quarters in a row.


-Lending standard are also tightening up for consumers.


-We just saw the largest percentage decline in average weekly hours since the recession of 2008.


-Gross private domestic investment is down.


-Consumer bankruptcies are rising.


-Commercial bankruptcies are rising.

All of this is not necessarily bad news for Trump.

A horrible recession started during the early years of Ronald Reagan’s presidency, but the U.S. economy turned around later in his first term and that momentum helped propel him to an easy victory in 1984.

Similarly, Trump could actually take advantage of the coming economic downturn as long as he is able to pin all of the blame for it on the previous administration.

If there is one thing that is true about U.S. voters, it is the fact that they tend to care about their own economic well-being more than anything else.

If you doubt this, just check out the results of a recent Fox News poll

The latest Fox News Poll also asks, what defines the American Dream today? At the top, according to the national survey released Wednesday, is “retiring comfortably.” Some 88 percent feel that is extremely or very important to realizing the dream.


Next, 76 percent say “having a successful career” is important. That’s followed by “raising a family” (74 percent) and “making a valuable contribution” to their community (74 percent).


“Owning a home” is seen as a big part of achieving the dream for nearly 7 in 10 (69 percent). About 6 in 10 say “graduating college” (61 percent) and “being better off” than their parents (57 percent).

To most Americans, being “successful in life” comes down to how much money they have.

That should not be true, but it is.

And this is ultimately what Trump will be judged on.

If the economy is improving by 2020, voters will tend to evaluate him favorably.  But if the economy is faltering during the next election season, it will be more difficult for him to get a second term.

So what Trump and all those that support Trump should want is for the coming recession to begin and end as quickly as possible.

However, there is also the possibility that the next recession may be a particularly bad one.  Because we are in the midst of the biggest debt bubble in human history, any major downturn could ultimately spiral completely out of control.  In other words, we may be facing the kind of crisis from which we never quite recover.

One expert that is warning about such a scenario is legendary investor Jim Rogers

…get prepared because we’re going to have the worst economic problems we’ve had in your lifetime or my lifetime and when that happens a lot of people are going to disappear.


In 2008 Bear Stearns disappeared, Bear Stearns had been around over 90 years. Lehman Brothers disappeared. Lehman Brothers had been around over 150 years. A long, long time, a long glorious history they’ve been through wars, depression, civil war they’ve been through everything and yet they disappear.


So the next time around it’s going to be worse than anything we’ve seen and a lot of institutions, people, companies even countries, certainly governments and maybe even countries are going to disappear. I hope you get very worried.


when you start having bear markets as you I’m sure well know one bad thing happens and another bad thing happens and these things snowball just like in bull markets good news comes out then more good news comes out the next thing you know you’re five or six or seven years into a bull market.


Well bear markets do the same thing and so we have a lot of bad news on the horizon. I haven’t even gotten to war. I haven’t even gotten to trade war or anything like that but you know things do go wrong.

If it is as bad as Rogers is suggesting, it wouldn’t be too long before conditions in America would begin to resemble those portrayed in my novel.

Let’s hope that does not turn out to be the case.

Let’s hope that the next recession begins and ends as quickly as possible and that the U.S. economy is on a solid upswing by 2020.

And if you are a Trump supporter, don’t be too dismayed if the U.S. economy takes a major downturn in 2017.  As I discussed above, it could actually be just the thing that Trump needs to set the stage for another election victory in 2020.

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FreezeThese's picture
FreezeThese (not verified) trumpala Feb 13, 2017 8:39 AM

Suffice it to say it's Trump's fault regardless of when it starts - he can't keep up this pace, 55% disapproval rating


The swamp is overflowing instead of drained, the Wall is on the taxpayers backs, tourism dropping thanks to travel ban

MillionDollarBonus_'s picture

Trump will collapse the economy because he is incompetent and doesn’t understand economics. Numerous top economists from the best universities in the world have criticized his tax plan as incredibly irresponsible and dangerous. If the economy collapses, it will be because Trump deregulated the economy and cut taxes, and capitalism failed, just like it failed during the financial crisis of 2007-08.

An Afrocentric History Of White People

INTJ Economist's picture

Numerous top economists from the best universities in the world are incompotent and don't understand economics.

DownWithYogaPants's picture

Trump approval figures are north of 60%.  Don't let the mainstream media buffalo you.

FreeShitter's picture

So he bullshitted 60% of y'all? Not bad....

corporatewhore's picture

Would you rather have an outright grifter to be President and a thoroughly Orwellian media and government in bed with one another?

eforce's picture

USA/Russia will be ok, EU/China are fucked though.

auricle's picture

Ohh MDB. 

Numerous economists. Another 'consensus is science' fraudster. Offer up a reasoned argument. Something better than Numerous economists. As a businessman, Trump has far better economic credentials than Obama had. It's not even a discussion topic. 


It's going to be a rough 4 years for you. You really need to step up your game now. The drive-by slurs won't cut it. 

baldknobber's picture

If the economy crashes tomorrow, as it could and probably should, will you still blame Trump who has been in 4 weeks?  Yeah I thought so, you and many others on both sides are intellectually dishonest and the real reason for most of our problems. If the truth be told on the morning of Nov 9 you woke up with more wood than a lumberyard, because you now had a 4 year target for all your rigid ideological mess

Indiana1's picture

Im with you on the "Trump doesn't undersatnd economics".  but certainly not with mainstream economists (let's not call them experts; they are only experts at their own models which includes decades of monetary expansion).  

You represent the typical ignorant person though who blames economic shifts on the current president and doesnb't look any deeper.  

2007-08 was juat a preview of what happens when quasi-Keynesiasm runs the world   The next time we'll see the real effect of correction.  

spag's picture

the new boss, same as the old boss, we'd all be fooled again.

Arnold's picture

Trumpet is putting the Moslem Brotha Hood in key security positions?

Muthafucka...we'll see about that.

MFL5591's picture

Would like to see him crash this economy, purge the debt and reset this mess on a course it can grow without the anchor of debt .

DownWithYogaPants's picture

No need to crash it.  See Bill Still's "Money Masters".

Trump can pay off the debt using United States Notes

Helix6's picture

Can and will.  He'll have no other choice other than an outright default, which would be catastrophic to the US economy and shake the world financial system to its core.  Of course, US currency will take one more large step in the direction of toilet paper, but at this point, the ship's going down either way.  Better to sink slowly so the passengers have time to prepare...

chubbar's picture

The author tells us that a recession started in 2005 and we were never out of one since, using John Williams calculations on his web site Shadowstats. I agree. In fact we are at depressionary  levels of unemployment using pre boskin commission calculation formulas.

Why then argue that one should start soon? Why not argue instead that we are in a recession and that we should be using honest weights and measures to properly inform the public? If the gov't can keep changing the goal line via changing formulas, how are we ever to really know what is going on? The gov't is just lying to us at this point, not that they ever weren't. The true numbers from shadowstats should be published far and wide so that the US public knows what is actually going on! The economists at the FED and elsewhere should be publically challenged to refute Shadowstats and the methodology that he uses. The veil would be lifted and the public would finally see what a bunch of lying scumbags these asshole economists are!

baldknobber's picture

I will not   have been fooled, but that  won't keep all the shit from dumping on my head along with the others

fbazzrea's picture

i upvoted but with second thoughts...

NO Fed 2018 is preferred. 

Darktarra's picture

Its Obama's recession and that needs to be established before the FAKE NEWS comes along and tries to pin it on Trump! 

Mustafa Kemal's picture

I estimate that the upvotes are because you are correct 

and the downvotes are there, despite you being correct, because you are a troll

hotrod's picture

It is another new paradigm.  Endlesss stock market growth through money printing and debt.

Osmium's picture

Yep, recessions have been outlawed.  

J bones's picture

Michael Burry got paid to wait...

corporatewhore's picture

what is burry investing in currently?

FreeNewEnergy's picture

Start the recession now. Oh, wait, the last one never ended.

CJgipper's picture

I was trying to figure out how you have a new recession in the middle of a depression.

Mustafa Kemal's picture

Maybe it should be a recedepression

BigFatUglyBubble's picture

He will keep trying to blow air into the bubble to make his banker buddies richer.

This is the last act of this particular play.  They will rob the middle class saver with ctrl-P until they have squeezed every drop from the "lemon."

Then on to a new form of digital global monetary tyranny.

FreeShitter's picture

The next ponzi will make the current one look saintly.

Helix6's picture

Unforunately, it's not the last act.  It's the end of the second act.  The third act is usually dedicated to the aftermath...

FreeNewEnergy's picture

Just bought another 100 oz of silver. Bring on the new paradigm. SDRs, bank notes, conch shells, who fucking cares at this point?

The money is more fake than the news, and that's saying something.

Honest money. What a concept.

lasvegaspersona's picture

3 ounces of gold are easier to hide in the hem of your skirt...

Squidbilly's picture
Squidbilly (not verified) Feb 13, 2017 8:42 AM


Frank-Walter Steinmeier welcomed as 'consensus' presidenthttp://www.dw.com/en/frank-walter-steinmeier-welcomed-as-consensus-presi...

IN STRONG ATTACK ON ISRAEL, GERMAN FOREIGN MINISTER SAYS SETTLEMENTS JEOPARDIZE PEACE http://www.jpost.com/Israel-News/German-foreign-minister-says-settlement...
Arnold's picture

Diebold hasn't finished counting the vote yet.

Mustafa Kemal's picture

Seems open to good relations with Russia also. Interesting times

AlexCharting's picture

This is the end game.... printing presses will continue until they break.... Dow 40k here we come!!!

FreeShitter's picture

The end game is to crush the dollar and bring on the SDR....look at the IMF website. Its all there.

FreeShitter's picture

Hey Snyder, the recession has been here for nearly 16 years...where the fuck have you been?

BigFatUglyBubble's picture

Years ago he blocked my account on his blog comment section for using an iconograph similar to yours.  What a pussy. W/E ZH comment section is a lot better.

NoWayJose's picture

I am sitting in all cash and phyzz - a couple stock/ETF things I got out of recently have trickled a few percent higher - but I got out of them because I fear a bigger correction is coming. Rather miss 3% up and avoid a 20% drop. And that is the ultimate guess when the market corrects - do you buy a 10% dip? Or is it going down another 25%? I wo 't be as quick to jump in on the next dip.

Mustafa Kemal's picture

dup, if you add in H20 and Pb

ilovetexas's picture

I smell fear, constant fear in the air. As long as this fear persists, the collapse won't come. Whatever you wish doesn't matter. The market is way more powerful than any single human being.

J bones's picture

2008 was a knock down. Next is a KO... and they will and are doing everything like the dow to prolong the inevitable.

baldknobber's picture

" Hey boys let's  be the one, to rip this band-aid off so the healing can start"  said no politician ever

dude duderson's picture

Waiting on the comment downvotes from the oblivious morons for telling them, once again, that Trump is part of the system and that there will be no "hope or change"....sorry "draining of the swamp" in the next 4 years. Goldman wins again #fuckyouamerica!!

dude duderson's picture

downvoting fucktards strikes again, no counter opinions in our safespaces pls  lol 

brushhog's picture

I gave you a down vote, here's why; There is a wing of people here and elsewhere that are just perpetually negative and have this outlook that the cards are stacked impossibly again us and there's no reason to even try/. These are the losers of our side, these are the weak, these are the defeated. You have defeated yourself before the battle even started. These same people ( yourself probably included ) said that Trump can never win"they" ( god-like elites that control everything ) will never allow it. This was the same shit we heard before Brexit, from the same weaklings.

I said it then, that if he wins these same people will turn around and say 'He's a trojan horse, he's part of the system, etc,etc' . So, you guys have a position that essentially says we cant ever really win and we're all fucked, so why bother? If we win, you'll turn it into a loss. If we lose you'll say "I told you so".

Anybody with ahalf a brain can see that the media, the politicla left, hollywood, and leftists all over the country are freaking out, truning violent, using outroight lies and propaganda to attack Trump. What you are saying is that all of that is staged to fool us. Its not a rational position. That is a paranoid leap. It's beyond paranoid, its literally time for psychiatric intervention, imo....but you'll probably think that is a conspiracy too. lol.