How Can We Create a Socio-Economic System Where Recessions Don’t Jeopardize Livelihoods?

(Originally published to Medium on April 6, 2025)

On April 2nd, 2025, Donald Trump announced a plan to institute minimum 10% tariffs on all imported goods to the United States. This has thrown people into a shock because of the impact this has on the economy and goods affordability.

**So, What Effect ~Will~ This Have On The Economy?**

It may be helpful to contextualize this shift in easy to understand economic terms. In addition to the graphs below, I’ve attached some short explainer videos from an introductory-level economics course. Check the captions to make sense of the visuals.

In an equilibrium economy, the aggregate supply and aggregate demand meet at an equilibrium point. At this point, the x-coordinate is the equilibrium GDP and the y-coordinate is the equilibrium price level. In order for a market to actually be at this equilibrium point (and not anywhere else of the graph), the market must be fully functioning, which includes there being a low unemployment rate of 4–6%. Reference video

With a 10% tariff, the aggregate supply curve shifts to the left, raising prices and decreasing GDP, without increasing consumers’ spending power at all. This is the worst possible scenario. Reference video

We can expect a further decrease in GDP due to the higher unemployment rate from the mass firings through DOGE. The DOGE firings resulted in billions of dollars diverted from the market. Rather than those salaries going into workers’ pockets, who can then circulate it in the market, this money has been taken out of the market and kept in the hands of government. This policy has an indeterminate effect on price level (it could make prices go up or down).

But This Will Self Adjust, Right?

In theory, but economists actually argue over whether this is true when it comes to situations like stagflation. Whether true or not, it would take decades for the economy to self correct, and government interventions are typically conducted to bring the market back to equilibrium.

(Please note: the market in economics is the subject of the graph — it’s the place where we are looking at the aggregate supply and aggregate demand. In this case, the subject of our graphs is the US market.)

What Effect Will This Have On People?

When considering the effects of this policy on people’s lives, I like to reference this balance wheel, which is generally all-encompassing of different aspects of life.

I did add one category to round it out, which is located in the middle of the photo. Source: The State of Women by Mallika Chopra

This policy touches most aspects of life directly, and nearly all categories indirectly.

Higher costs of goods and services leads to:

Pay cuts, layoffs, financial strain, bankruptcy
Less accessibility to higher education
Less spending on outings and playful activities.
Insufficiencies lead to mental anguish and feelings of failure.
Recurring upkeep activities are greatly reduced.
Higher pricing inhibits ability to routinely access nutritious foods.

All of which can impact one’s ability to properly rest and strain relationships with friends, family and community.

That was a lot! Let’s recenter.

What Do We Have the Power To Do In This Moment?

One thing you might notice about the economy is that it is wholly based on producers’ ability to make things and consumers’ ability to buy things. This is a crisis because people might not be able to buy all that they need to survive. So, what if we flipped the script? What if we began removing the ability to be alive out of the economy, so that our survival isn’t reliant on larger powers acting in accordance with our morals and values.

How do we do this? Slowly but surely, through community.

Current State: Individualism

Right now, we are all sitting right next to each other, trying to meet our common needs individually. Everyone needs stimulation in those same eight buckets to be fulfilled, yet we choose to worry about ourselves and let the odds be ever in others’ favor. As everyone works tirelessly juggling all the responsibilities of life, some descend into struggle, while others manage to keep their head above water. However all parties would be better off by sharing some of the load with each other.

Our Power: Community Resource Sharing

What if every single household didn’t have to buy every single thing that they need to thrive? Whether it’s a book that you want to read, a new kitchen appliance that would make your life easier, or some help with a responsibility to make time to breathe, chances are, the people living next to you have offers and needs that could help you both reciprocally. We can take our survival into our own hands by building trusting relationships with those around us.

The Answer: Pool Resources With Your Neighbors!

It all starts with you. Knock on doors, meet the people living next to you, make a group to keep in contact with them. Have them over, learn about their stories, find out what their offers and needs are and how you both may be able to help each other. Learn to navigate conflict effectively, learn to have empathy and allow people to reflect and grow from their mistakes, move in humility in knowing that your neighbor’s fulfillment is integral to your own. Allow connections to grow organically and institute structures to keep the community moving in a positive direction.

If you’re interested in going through this process of community building with neighbors together, feel free to reach out to me at [email protected]. We can do this!