I do not have a degree in economics. What I do have is about 40 years of experience in the economics of running a household budget and 17 years of running a business. To have done both of these things successfully I had to have the smarts, the intelligence to balance budgets or make a profit. I have done this for a combined 57 years but our Federal, State and local governments have either only done so on rare occasions or not at all. Governments spend other peoples money but I was spending my own money and that is the big difference. When spending other peoples money you spend irresponsibly but when it’s your money you had better spend it wisely. This is why most all of government; federal, state and local is in debt and has burdened the people with high taxes.
If you have been watching the news you know about DOGE, the Department of Government Efficiency, that has found thus far many billions of dollars wasted on some of the most stupid things you ever heard of. I live in Pennsylvania and several years ago the state capital in Harrisburg went bankrupt along with some counties and municipalities. The county was already at the legal maximum in taxation and went to court to get approval to raise taxes. The court granted their request and the county hired an appraiser from New York for 1 million dollars to reassess all property in the county. As an example of the results my property taxes quadrupled. This created an extreme hardship for the retired elderly people on a fixed income. This was true in many PA counties. The answer, the state legislature created a tax and rent rebate program that paid a rebate to elderly people of up to 50% of their total tax. The cost of creating this new state program in my view was a waste because a general 50% tax forgiveness plan would not require paying a staff , office supplies, computers and office space for employees who receive benefits . It seems that governments always want to expand the bureaucracy rather than use simple logic.
President Trump has placed tariffs on almost every nation on Earth. Even though they are reciprocal and amendable the true motive behind them is to have free trade without tariffs or give incentives for businesses to relocate to the U.S. and hire U.S. workers. The stock market lost almost 4,000 points in the two days after the tariffs went into effect. In order for Trumps plan to work he must have important legislation pass congress but his “ big beautiful bill” is meeting with opposition from both republicans and democrats. For Trumps plan to have any hope of success he needs to have all his ducks in a row. The increase in the cost of products to the consumer due to the tariffs must be offset buy lower federal taxes, no tax on tips, overtime and social security benefits. Then if overseas businesses come to the U.S. time will be required for them to find or build a factory and hire and train workers. The results of all this may not be seen for several years.
President Trumps plan has merit but is extremely risky because to carry it out involves step by step actions that must happen. If he can’t get his big beautiful bill passed there will be no help to the jconsumer to deal with increased prices due to tariffs.
Trump plans to negotiate the tariffs with the nations to either reciprocal or eliminating them altogether. Trump wants to encourage foreign based companies to come to the U.S. build, hire and produce their products here. To get all of this to play out will be a great challenge. If Trump fails it will lead to the greatest economic depression the world has ever seen. Many economists set the odds of Trump being successful at 50% so its even money so to speak.
This is not just a U.S. problem, it is worldwide because if the U.S. goes down we will drag all nations with us. The purse strings of the global economy are all tied together, all nations have printed their currencies into oblivion and other problems like wars, collapsed morality, no respect for law and order, racial issues, corrupt governments and leaders in them all contribute to the state of the world today.
No comments:
Post a Comment