Trump proposes another massive wealth redistribution scheme.
Economic Illiteracy at Its Finest
Trump on Truth Social: People that are against Tariffs are FOOLS! We are now the Richest, Most Respected Country In the World, With Almost No Inflation, and A Record Stock Market Price. 401k’s are Highest EVER. We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion. Record Investment in the USA, plants and factories going up all over the place. A dividend of at least $2000 a person (not including high income people!) will be paid to everyone
Four Trump Tariff Positions
- Use Tariffs to eliminate the deficit and pay down debt
- Use tariffs to bring production back to the US
- Use tariffs as a redistribution scheme to give everyone $2,000
- Use tariffs to pay for the damage Trump he caused to farmers
$2,000 Redistribution Math
- Total Population: 343 Million – Cost $686 Billion
- Noninstitutional Population Age 16+ of the US: 274 million – Cost $548 Billion
- Noninstitutional Population Subset: 200 Million – Cost $400 Billion
Five Questions
- Who pays the tariffs?
- Since when do Republicans cheer massive money redistribution schemes?
- How does one eliminate the deficit and pay down debt when the deficit is much larger than tariffs can bring in?
- How can tariffs simultaneously bring back production and collect money?
- How can you redistribute $400 billion minimum, plus farm bailouts, and shrink the deficit?
Five Answers
- US consumers and businesses
- Since Trump
- You don’t
- You don’t
- You don’t
Since US consumers pay tariffs, what Trump proposes is one of the biggest wealth redistribution schemes in history.
Trump wants to take tariff money (a tax on consumers and businesses) and redistribute that money to households (except the wealthy, whatever that means), and also to farmers to make up for the damages Trump caused farmers in tariff retaliations.
Q: How does this make any sense at all?
A: It doesn’t.
And while we are bailing out the farmers and redistributing money to households, many small businesses are going to go out of business because of these tariffs.
But hey, that’s OK because $2,000 will cover the cost of going out of business. Right?
What’s Trump Doing?
This is speculation on my part, but I think he is futilely trying to drum up support for tariffs when the Supreme Court rules against him on reciprocal tariffs.
Trump want to blame the court for their ruling if and when it goes against him. (Note: I have a post coming up on the Court decision regarding the odds, and the vote count by individual justices).
Of course, never discount the possibility that there is no rationale for Trump’s madness, so there’s just madness. He says or does things on whims without thinking.
This is the second major redistribution scheme since Friday. Here’s the other.
Republicans Start to Negotiate on the Government Shutdown
Earlier today I commented Republicans Start to Negotiate on the Government Shutdown, What Will Happen?
The leading GOP proposal involves sending federal money into flexible-spending accounts instead of to insurance companies.
Flexible spending accounts is the brainchild of Senate Health, Education, Labor and Pensions Chairman Bill Cassidy (R., La.)
Q: How does that work?
A: Details are scant, but essentially the government collects taxes then redistributes the money to offset proposed Republican cutbacks in Obamacare.
Arguably this is better than collecting taxes and paying health providers, but some of us propose not taxing us in the first place.
The sad irony is Republicans refused an offer by Democrats that would have genuinely been temporary with a cost of $35 billion.
Instead, they are going to get hooked into perpetually extending this deal at a cost of $350 billion. Click above link for further analysis.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
On March 12, I commented Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Lutnick: “We’re going to make the External Revenue Service replace the Internal Revenue Service.”
I ran the math on that ludicrous idea. Team Trump only needs to bring in $7 trillion in tariffs on $3.3 trillion in total imports.
Today we see Trump is not going after the deficit at all. Instead he will collect tariffs (taxes) and hand out $2,000 (minimum said Trump) to try to pay off farmers and everyone else harmed by his tariffs.
As is typically the case, the cult will cheer.
Bonus Question: How does Cassidy’s proposal differ from Elizabeth Warren’s Universal Basic Income idea?
A: It doesn’t. The money is supposedly for healthcare but money is fungible. Free money is free money (except of course it’s never free).
Final Question: Who’s the fool here?
This post originated on MishTalk.Com
Thanks for Tuning In!
Mish
