Without a trade war, risks to middle class in USA will be permanent. $800 Billion trade deficit EVERY YEAR with all countries we trade with is a HUGE loss of manufacturing jobs, permanently. Just think, for $3 Billion Ford built a large auto plant in Mexico. Manufacturing jobs are mostly middle class jobs.
The truth is economic cycles can not be cured permanently by artificial means such as lower than inflation interest rates by the FED, or encouraging imports to help other countries in bad shape. All it does is postpone the unavoidable economic cycle, and the result is ALWAYS bigger crash at the end.
Notice how the gov’t was “helping” people to own houses by forcing lender to lower standards. Sub-prime loans were every where. Yes, it did prolong housing market boom. But then the laws of economic cycles took over and housing crashed.
The ZIRP policy by our FED has artificially inflated value of hard assets and stocks and bonds. The result will be the same. A harsher recession and crashing of asset values.
The economy can not expand at a rate larger than gains in productivity and population size. If forced to do so, be prepared for a nasty crash later.
I do not disagree with all that at all.