Uhm, yeah. That was the whole point of the tariffs, rhetoric notwithstanding. To address deficit and GDP/debt ratio issues, someone needed to have the government reduce overall spending and increase overall revenue. So the plan was to reduce spending via cuts with DOGE as a stalking horse to take the slings and arrows of the media, a tax cut to stimulate economic growth in a way that reduces dependency on consumerism, and increasing net revenue intake via tariffs.
Any cuts to government services will be politically unpalatable, and hence the media will amplify any screaming from the affected. Any attempt to implement the broad-based tax increase with no net government benefit will be political suicide. So the guy that has no future in political office is the one to push to get it done.
To get to long term economic stability, we need to take over $1.5T of phantom money out of the economy. That should trigger a recession in the near term, but it’s necessary to get the US on an economic footing that is less similar to Greece.
Scary_Firefighter181 on
This was literally the reason that even back in the 1910s, during the Woodrow Wilson presidency, an income tax was signed into law and supported and ratified by all the states.
Before then, Tariffs were the main source of revenue rather than income tax, and that was a Republican policy(nothing has changed). Democrats were the anti tariff party because it raised prices for consumers and affected mainly the lower income classes and middle class, while Republicans supported tariffs to support big businesses.
It was so chaotic and uneven that all the states agreed to go for an income tax instead.
For some reason, Trump and the GOP think that the pre 1910s model, the gilded age model, is the ideal system in 2025.
The tariff as a source of revenue concept was such a joke that there’s a reason economists don’t take it seriously. Yet……sigh.
Ok_Lie_3148 on
I’m no economist. I’m trying to learn about all of this, so I can respond appropriately to preserve my purchasing power. It’s my understanding that some economists have speculated that the intention of these tariffs (and other measures taken by the admin) may have been to trigger the Fed Reserve to be forced to lower interest rates. In turn, this would push inflation up, thereby allowing the federal government to pay off the debt easier over a period of time. The time for austerity cuts has long passed. Maybe we could’ve attacked the debt with real growth through green initiatives but the fossil fuel industry (cough Koch Brothers) have cut that off time and time again.
So, we are left with default or “financial repression”. Am I on the right track here?
3 Comments
Uhm, yeah. That was the whole point of the tariffs, rhetoric notwithstanding. To address deficit and GDP/debt ratio issues, someone needed to have the government reduce overall spending and increase overall revenue. So the plan was to reduce spending via cuts with DOGE as a stalking horse to take the slings and arrows of the media, a tax cut to stimulate economic growth in a way that reduces dependency on consumerism, and increasing net revenue intake via tariffs.
Any cuts to government services will be politically unpalatable, and hence the media will amplify any screaming from the affected. Any attempt to implement the broad-based tax increase with no net government benefit will be political suicide. So the guy that has no future in political office is the one to push to get it done.
To get to long term economic stability, we need to take over $1.5T of phantom money out of the economy. That should trigger a recession in the near term, but it’s necessary to get the US on an economic footing that is less similar to Greece.
This was literally the reason that even back in the 1910s, during the Woodrow Wilson presidency, an income tax was signed into law and supported and ratified by all the states.
Before then, Tariffs were the main source of revenue rather than income tax, and that was a Republican policy(nothing has changed). Democrats were the anti tariff party because it raised prices for consumers and affected mainly the lower income classes and middle class, while Republicans supported tariffs to support big businesses.
It was so chaotic and uneven that all the states agreed to go for an income tax instead.
For some reason, Trump and the GOP think that the pre 1910s model, the gilded age model, is the ideal system in 2025.
The tariff as a source of revenue concept was such a joke that there’s a reason economists don’t take it seriously. Yet……sigh.
I’m no economist. I’m trying to learn about all of this, so I can respond appropriately to preserve my purchasing power. It’s my understanding that some economists have speculated that the intention of these tariffs (and other measures taken by the admin) may have been to trigger the Fed Reserve to be forced to lower interest rates. In turn, this would push inflation up, thereby allowing the federal government to pay off the debt easier over a period of time. The time for austerity cuts has long passed. Maybe we could’ve attacked the debt with real growth through green initiatives but the fossil fuel industry (cough Koch Brothers) have cut that off time and time again.
So, we are left with default or “financial repression”. Am I on the right track here?