Posted on 05/06/2016 5:38:20 AM PDT by reaganaut1
You said:
A 20% across the board import tariff balances the Federal budget tomorrow.
Now suddenly it's only "durable goods", and only from overseas.
STOP MOVING THE DAMNED GOAL POSTS!
By definition domestically produced goods and services are not tariffed. Not every good and service that we buy is imported - not yet thankfully. The USA imports $2.7 Trillion in goods and services every year FROM FOREIGN COUNTRIES. A 20% tariffs raises $540 Billion and balances the budget tomorrow.
I don’t think anyone can talk about any plan that has a chance of working and then get elected, or re-elected to any office. Any fix is probably too painful. Most people would prefer a slow frog boiling despite a worse outcome.
We cannot untwist the one time no cost gimmick Op Twist at what are now cyclical low rates. Refi has no benefit unless rates are negative.
One way, or another, this is going to be either painful, or catastrophic.
Perhaps the best thing is someone is calling out the country and beginning another round of discourse. Reagan had the Grace Commission investigate this same issue in the mid 80s when the debt was less than $3T. hw Shrub and Clinton ignored findings and used the SS surplus. I don’t thing ignoring is an option now.
From my end Trump can have quite a bit of slack to pursue strategies or head games with our creditors/competitors. I certainly don’t want him to curtail his options to those that comfort the weakest links.
You simply do not understand how bond markets operate, or how successful companies operate with respect to same. Do not try to turn your naivety into a self-righteous virtue. (It is not a vice, either. No one expects someone who does not have Donald Trump's wealth of experience, to have his understanding of markets.)
Just don't lead with your chin.
Only if people keep buying the same stuff after the price goes up 20%. Tariffs are like taxes - they are ultimately paid by the consumer. If the tariff raises $540 Billion dollars, that's $540 Billion dollars that came out of our pockets.
What would we do to offset the tariffs that they upped for our goods?
Which is exactly what would happen. It would result in a lot of people out of work.
Kudos.
Here’s another complication with tariffs. Domestic manufacturing competitors of the overseas low-baller, can use the implementation of the tariff to boost their selling price by the same amount as the new tariff. They thereby signal that the tariff won’t be received by them as an advantage to boost sales and hiring, but as a way to simply extract government-mandated profits.
Convincing creditors to take less in payback for our debt is default. Partial default.
The example I gave you was very real and was an offering that was advertised in Time, if I remember correctly. When I saw it, I just tried to take it all in. It was hard to believe.
As far as overstating it, I don’t think it is overstated. Creditors voluntarily take on the risk of our bonds. There will be a price paid for that risk.
Price of bond =
3% historically the rate of borrowing money
+ Adjustment for inflation
+ risk premium
If inflation went up, the rate could go sky high. If the risk increased the rate would go sky high. If both inflation and risk went up at the same time, the rate would skyrocket.
This is really risky especially in the long term.
“Do these credentials allow me to criticize our candidates policy positions?”
Criticize away. Enjoy the razors edge & have a nice day :)
Karl Marx was merely a librarian. Nothing more than that.
See my replies #78 & #83.
That's true. An across-the-board import tariff will eventually encourage domestic production, but the immediate result is going to be a reduction in the standard of living for most people. Even when domestic production does come online, consumers aren't going to see any reduction in cost for some time.
People are struggling to make ends meet as it is. Inititially an across-the-board tariff is going to make that situation even worse and people are going to turn on Trump with a vengeance.
“How about selling land the government keeps locked up away from the citizens who ARE the rightful owners?”
We need to keep those lands pristine and as a result it MUST remain under control of the federal government! It is the new conservatism! Get on board or get banned!
/s
Well that’s probably true. But I do think the Greek option is ultimately how it ends no matter what. And the question is whether it’s going to happen now when it’s only a $20 trillion default or whether we’re going to wait until it’s a $40’trillion default. I vote for now. The widows and pensioners who will be left penniless will be less numerous.
Agree 100%.
“clueless about how things work.”
In a triple post no less.
The way it works is pretty simple. Each side wants something out of a deal. Of course, both sides want everything. Neither will get everything. Both will give up something to get what they want, which is less than everything. If they perceive it as in their best interest, both sides make a deal.
I think the US is not going to default outright, so that big stick is off the table. How it would work in practical terms, I do not know.
>> Karl Marx was merely a librarian <<
Don’t think so. A “mere librarian” couldn’t come up with economic myths that still entrance such current notables as Hilary, Bernie and Mr. Trump.
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