By: Giulia Gourgue
Rubik’s cubes, those mysterious colorful and complicated items that not many people can figure out.
Recessions are mysterious in this way as well, no matter how hard we try to figure it out. While some have mastered the topic and can keep up with the trends of the economy, many others cannot navigate the complexities.
Recessions mainly occur when there is a massive decline in people spending their money, which tampers with the amount of money flowing in and out of the economy.
The state of the economy can never be predicted with great certainty. The economy is so complexed that you could pass a bill, thinking it is going to give you a result; however, the consequences may do more harm than good.
Political Science Professor, Francis Orlando, finds the topic of the economy interesting given the simple fact that you never know what will happen.
“While we are not in a recession, people are concerned that we will go into one,” Francis said.
The way our economy works is that we have quarterlies. For example, July is the first quarter; August is the second, and September will be the third.
In the second quarter of 2019, the economy grew at 2.1%, which is not a recession. A recession is defined by 2 straight quarters of no or negative growth. In quarter one, the economy grew at 3.1%, after September, the 3rd quarterly will come out and will reveal the type of growth that occurred.
The United States has been experiencing tension with China, and it is getting worse as we are currently in a trade war with them. The United States President, Donald Trump put a tariff on billions of dollars of Chinese goods. As a result, China stopped buying products from the United States.
“We put tariffs on the goods coming from China, now goods will cost more money which will cause the United States to buy fewer items from them, but now that China has done the same to us in return, it will affect the manufacturers in both of our markets,” Orlando stated.
The United States President, Donald Trump put a tariff on billions of dollars of Chinese goods.
Senior and Social Work major Ashley Vega has been watching the economy closely as she graduates in May 2020, and is worried about what the job market will look like, and how a recession could affect her.
“I might continue with my education and get my Masters because I want to be a School Counselor, and I don’t think the economy will be working in my favor, especially with just a Bachelors Degree,” Vega stated. She continued, “It will affect graduating students if the career route they’re going into would not benefit from a recession.”
When looking ahead at how the recession may affect new graduates, Professor Orlando stated, “Depends on what field they are going into. The recession is not good for employment, but certain industries strive in it. There will be opportunities there for certain fields and businesses.”
Orlando continued, “For example, housing prices will go down, and people who always wanted to be homeowners can own a home. You’ll also have the time to go back and get a degree, as universities will have more people registering to get another degree. So, businesses like higher education schools and real estate usually thrive around that time.”
There are many factors that can lead a country into a recession, and politics can play a significant role in the economy. Vega stated, “The economy [in my opinion]is actually doing well at the moment, so there is not much to complain about that there, but Congress and the President decides all of that.”
Additionally, it would be a disastrous political move for the United States President to allow the economy to go into recession amidst a re-election campaign. Trump advocated for the payroll tax, which allows for little to no taxes being taken out of paychecks.
“Trump wants the economy to do well because the better the economy is, the higher his approval rate is, there is a better chance that he will be re-elected. If it tanks, his odds of being re-elected will go down,” Orlando stated.
Recessions mainly occur when there is a massive decline in people spending their money, which tampers with the amount of money flowing in and out of the economy.
Orlando continued, “Trump is very unpopular outside of the economy though, so that could play a role in him not getting re-elected for the next term.”
“Think about it. If the economy is doing this well for any other president, they would be getting re-elected in a heartbeat. Right now, unemployment is low, and we don’t have runaway inflation,” Orlando expressed.
“The Democratic candidates just have to get it together. They have many ideas. For example, like [Democratic frontrunner Bernie Sanders] Sander’s plan to get rid of student debt, how would that affect our economy?” Vega stated. She continued, “It would be easier though for them to beat Trump in a down economy, rather than a thriving one.”
With the number changing all the time, and many other factors playing into it, it is hard to say how the economy might look because any little thing can ruin or benefit the economy.
