Posted on 03/10/2025 8:27:56 AM PDT by bitt
President Trump believes it's worth risking pain to achieve his medium-term goal of rewiring the U.S. economy. He is attempting a form of economic shock therapy, while accepting there could be collateral damage.
Why it matters: That willingness to shrug off risks of inflation or recession is now rattling financial markets and confidence — and has itself emerged as the biggest near-term economic risk.
The administration has embraced that the economic disruption it envisions could be painful.
That adds to the risk that if the economy starts to falter — and it hasn't so far, at least according to the high-level data — no cavalry will be coming from Washington to contain the damage.
The big picture: Trump is seeking to rapidly undo a global economic order that has been decades in the making. Americans enjoyed the fruits of cheap goods made around the world, at the cost of a diminished domestic manufacturing base.
He envisions an economy with many fewer bureaucratic paper-pushers and much more factory work.
He seeks to bring down the deficit while keeping taxes low — which only pencils out if there are major cuts to America's social welfare programs.
Coming "detox": "Could we be seeing this economy that we inherited starting to roll a bit? Sure," Treasury Secretary Scott Bessent said Friday on CNBC's "Squawk Box."
"There's going to be a natural adjustment as we move away from public spending," Bessent added. "The market and the economy have just become hooked ... We've become addicted to this government spending and there's going to be a detox period."
(Excerpt) Read more at axios.com ...
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The Pandemic party’s over folks. America is broke.
After this country allowed Biden in for four years, insulting and hating trump, the willing and able fixer, the country requires shock therapy
Duh
POTUS Trump knows his real enemy is the Federal Reserve. This is going to be quite the show!!
The thing that’s going to make this interesting is that many of those factory jobs that come back are going to be done by machines, not people. I believe the world economy is reaching a point where goods are going to be manufactured in countries not where wages are the lowest, but where taxes are the most beneficial to the manufacturer. I believe wages will be less and less relevant to the cost of goods. As time goes on.
Market correction. We all knew at some point the bill would come due. Many on this very site have been preaching that for several years now.
The options are stop the bleeding, endure some pain, but position ourselves long-term to be in a better place, or keep the blindfold of blissful ignorance tightly secured and proceed to drive right off the cliff of total financial collapse.
Both options suck. One sucks a little less than the other. But there is no third option.
IOW the real problem in fixing the American economy is the American people: badly educated, short on technical training, entitled, and fractious, as is most of Europe.
I don’t think America is broke—yet. But if we don’t change course quickly, we will be. We’re more like a family with a strong income that’s been living far beyond its means and is now hitting a financial wall.
Imagine a household with a great salary but massive debt and reckless spending. If that family cuts waste, tightens its budget, and starts managing money wisely, it can climb out of the hole.
For the country, if the DOGE can root out massive fraud, inefficiency, and waste (which I believe they can and will), and if Trump’s tariffs help bring jobs back, we could see the economic resurgence he calls America’s Golden Age.
Right now, all that deficit spending effectively goes into the pockets of politicians and the rentier class in the stock market.
I think it’s more of an Economic Bomb Cyclone.
Biden ordered flock after flock killed and it was totally unnecessary. Cooking to 165 kills the virus....in both the chicken and the eggs.
They should have broken the huge flocks into smaller flocks.
Carry on Mr. President.
I’m good with it.
🇺🇸👍
Bookmark
That much is true. What Trump is doing with DOGE is great and will build momentum. But we aren't going to solve the deficit with DOGE. Social welfare programs are going to have to be cut or restructured. That is what has always killed fiscal reform before. Hopefully the momentum is built with DOGE to actually do something about the Welfare State.
The tariff ploy is running counter to the needs to reduce U.S. federal debt.
Every dollar of tariff “revenue” is a dollar tax on some U.S. importer, NOT the exporting country. To the extent that lowers net income to those U.S. importers, it can lower their corporate income tax. That can offset any federal revenue gains from a tariff. The net gains and losses from tariff revenues and lower business income tax revenue may be wash; not the “billions and billions” in net reveunue gains Trump predicts.
The best “tariff” agenda is to lower all tariffs against U.S. exports. The best agenda for that is not to necessarily raise arbitrary tariffs based on the dollar value of certain imports. but to demand reciprocal tariffs as the negotiating way to get to lower tariffs against U.S. domestic made goods.
Tariffs of automobiles and automobile parts is going to hit American auto manufacturers in all three directions, because their products and their parts go both directions between all three countries. And there have been no tariffs by Mexico and Canada for U.S. vehicles and vehicle parts from the U.S. That can quickly change, increasing not just what U.S. car makers costs are in the U.S. (because of new tariffs on parts and cars coming in from their plants and suppliers in Canada and Mexico, but also increasing the cost for U.S. made parts and vechiles on U.S. cars and parts exported to Canada and Mexico. U.S. auto makers are likely to be hit with higher tariffs in all three countries.
I saw one auto reprentative in Pennslvania interviewd on a news program. He said trucks that now have an $80,000 price tag will have a $100,000 price tag and more of them will be left unsold in inventory.
The winners? Japanese and Korean auto makers importing to and making vehilces in the U.S. will be the winners of Trumps tariffs on Mexcio and Canada. They can beef up their own domestic parts suppliers and import fewer parts from Mexico or Canada for their U.S. plants. And, meanwhile, car and car parts imported to the U.S. from Japan or Korea have only a 2.5% import tariff. Japan and Korea are likely quietly smiling over the 25% tariffs on Canada and Mexico auto industry goods.
Right - stock market rash under way now.
crash
Market doge is repricing TSLA and other stocks.
Trump hasn't provided clarity on tariffs and other adjustments. The market doesn't like these moves and will continue being volatile until there is resolve. End of month and into April is critical for the market.
I’m buying this dip.
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