Posted on 03/31/2025 6:12:57 AM PDT by RandFan
@PeterSchiff
During the months leading up to the 2008 GFC, the government and mainstream financial media remained clueless about what was obviously coming. They are making the same mistake again.
Tariffs mean fewer goods will come into the country, and fewer dollars will go out. More money chasing fewer goods means higher domestic prices. This is an economic certainty. As import prices rise sharply, demand will increase for domestically produced goods, sending those prices higher too. Meanwhile, lower trade deficits will result in fewer dollars being recycled into U.S. bonds, sending long-term interest rates higher.
Higher consumer prices and long-term interest rates will combine to weaken the U.S. economy, increasing the size of federal budget deficits. Middle-class tax cuts will worsen the problem by not only adding to deficit spending but by directly fueling demand for a diminishing supply of goods.
The Fed will respond to this "unexpected" economic weakness with rate cuts, ignoring the surge in consumer prices as a transitory effect of tariffs. They will also incorrectly assume that lower inflation will be the silver lining to the recession cloud.
All of this will weaken the dollar, compounding the effects of tariffs by making import prices rise even higher. Meanwhile, a weaker dollar and larger budget deficits will put even more upward pressure on long-term interest rates, which the Fed will try to offset with a return to QE, throwing gasoline on an already burning inflation fire. This will not be 1970s-style stagflation. It will be something much worse.
Uh-huh.
The facts missing from this equation are all the punitive taxes/tariffs arrayed against US products around the world.
That inconvenient fact is NEVER brought up by ‘free traders’.
DJT implemented the tariffs as a bargaining chip and schiff/paul ignore the logical effects.
However, I will not ignore the fact that the administration has bungled badly in squandering a strong position by implementing the tariff policies haphazardly.
Evidence: The euroweenie confrontation over ukeland (combined with the looming failure of ceasefire negotiations) and the liberal election win in Canada.
I had hoped for a better launch of DJT’s 2nd administration but clearly Susie Wiles doesn’t know WTF she’s doing and my other hand is nearly full.
As far as all the ‘free traders’ out there: You can all kiss my backside. We need STRONG trade policy which benefits the US and Paul has presided over back-to-back administrations which enacted horrible trade policies, going so far as to support cheap, foreign made goods by saying,
“And so that savings, though, allows working-class people to have savings to get a television set, to go on vacation, to buy gas for their truck. So trade is really a good thing.”
He’s a dumbass.
Arguing that tariffs brought us the looming economic/fiscal problems is a delusion of idiocy. The pain of prior government policies at all levels is unavoidable (and unfortunately so it seems the looming conflict(s)).
Replacing foreign jobs with domestic jobs. Replacing foreign goods with domestic goods. Replacing foreign dependence with domestic independence. Replacing foreign aid with domestic fiscal responsibility, replacing foreign energy with domestic energy, replacing foreign vehicles with domestic vehicles...I guess the list goes on and on and it’s just not that hard.
Trump gets it.
It's sometimes hard for those who have always viewed an idea from one viewpoint to see that new innovative ways can actually be an improvement.
Peter was wrong about bitcoins, by his own admission, which means he does have blind spots. He's not infallible in other words.
Absolute bunk.
American production will rise and every American will be better off.
Yes I know. Someone will be vindicated as I said previously
Someone like Rand has taken a position against them. The only GOP senator. I suspect it’s due to his re-election it can’t hurt to stake that position like that just in case.
It IS a gross oversimplification.
And it’s use says a lot more about its proponents.
I am a supporter of tariffs in principle, but I believe this is verifiably false.
Can you think of a single U.S.-made product or service that has gotten less expensive over time?
If anything, it’s the exact opposite — where the highest price inflation rates can be found in sectors with little or no foreign competition.
If so, why hasn't rand paul railed against the USA getting railed by high
canadian tariffs on USA products.
paul is turning into another undercover illiberal democrat rino.
Also, I 'could' be struck by a piece of falling space debris.
That 'could' be a disaster too.
Another fundamentally flawed premise. So tired of this non-sensical idea that other countries benefit greatly by putting massive tariffs on our goods, but the second we reciprocate, we will be the only one to suffer.
To listen to the media and the globalist “economists”, every country is about to win big, while we lose. Doesn’t pass the smell test - especially when we are the country taking in a lot more than we are sending out - but yeah, somehow all those other countries win.
Haha yeah, I’m being careful with the qualification
None of us can predict the future.
I honestly hope it works out in the short term the markets are hating it or so it seems.
Free Traitors are a cult. If there is a demand for goods and services inside America created by then American entrepreneurs will mobilize to meet the demand and hire Americans to produce the goods and services. That is the whole point of tariffs and why other countries used them to strip whole industries away from America. The real angst that Free Traitors have over tariffs is that they increase wages and opportunities for Americans and makes them more free.
Sounds like Schiff has been reading those billboards the hosers put up all over America complaining that Trump’s tariffs are going to hurt US more than it’s going to hurt THEM. I wonder why they are worried about US.
The US has exported these items that have been made cheaper.
All of our cars and computers and such left made here are basically going up. We have energy, taxes, regulations (pollution, etc.), and much more layered on top of us. We have to eliminate these and charge other countries for their missing costs that we have to bear. When we change this, we will have more competition in our country occur, as we did under computer companies and car companies.
Rebalancing local production takes time.
It’s a “pay me now, or pay me later” question.
Some day soon . . . Need a drone swarm to defend against the ChiComs? Sorry, we can’t make them in America, cuz all the factories are closed, and there are no longer any US Engineers. But you can get a great Starbucks from that XYZ Studies PhD Barista.
I will gladly face the pain now so that my kids (and your kids) will have a better life.
Only simpletons think in static term, and such low IQ people shouldn’t make policy.
Tariffs for what goods, exactly? Goods we should be producing ourselves. Companies cheat Americans by buying cheaper goods overseas and bringing them here.
What American is going to afford these goods if they do not have a job because their company fired them to buy from overseas? When you have no money, those cheaper imports are far more expansive than tariffed goods when you have a job.
Imports are a tax on Americans.
Funny how past experience does not support this opinion piece. The reasoning is as bad as climate change research, many unfounded assumptions stacked on atop the other.
It sickens me how economists are so dogmatic and so wrong. Consider the actions of the fed based on similar flawed theories about what caused the inflation that fed policies fed.
No. All the pearl clutchers and amateur economists never mention that.
short term pain, like after WW2 industries had to shift back to consumer products after building tanks and bombers. 50s and 60s were pretty great for US manufacturing.
talked with an auto supplier who used to make little precision springs. they are still used everywhere but we don’t/can’t make them anymore due to cheap imported junk. Guess from where?
If there were no tariffs and no slave labor, and the Env regulations were compatible, then that would be ideal.
But, we do not live in ideal world.
So America must answer by tariffs. Otherwise, there will be no manufacturing jobs left here! Most of them went abroad already.
I would rather pay more for Made in America! I always try, but it is really hard to find nowadays.
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